Karachi dairy farmers are considering a milk price hike due to increased taxes on dairy animals, which have raised operational costs. The tax hike could impact milk prices and availability.
Dairy farmers in Karachi, Pakistan, have hinted at a potential increase in milk prices due to the local administration’s decision to impose double tax collection on dairy animals. According to ARY News, the tax has risen from approximately $0.35 to $2.50 per animal in areas such as Gadap Town, Super Highway, and other parts of the city. Additionally, the Ibrahim Hyderi Town administration has imposed a $1.50 tax per animal, further straining the dairy farmers.
The farmers have expressed that the increased entry fees of $3.70 per animal are unsustainable for many of them. As a result, they say they will be forced to raise the prices of milk and other dairy products to cover these additional costs. The farmers’ spokesperson stated that the financial burden is too much to bear without passing on the cost to consumers.
Earlier this year, in June, the Commissioner of Karachi had set a new milk price after consultations with the Dairy Farmers Association. As a result, the retail price of milk was raised to approximately $0.80 per litre, an increase of about $0.07 per litre. The wholesale price was fixed at $0.70 per litre, while dairy farmers would receive about $0.65 per litre for milk.
Despite the rise in prices earlier this year, dairy farmers had continued to press for another increase, citing higher operational costs, including the recent tax hikes. This is despite a drop in petroleum prices, which had been expected to alleviate costs.
The agreement made between the Karachi Commissioner and the Dairy Farmers Association, which was made available to ARY News, stipulates that dairy farmers must sell milk at the agreed-upon official price, with the promise that no further increases will be made until December 31. The agreement also mandates that dairy farmers display the purchase and sale rates at all levels and maintain the quality of milk from dairy farms to retailers.
If the farmers fail to comply with these terms, legal action will be taken. The situation highlights the ongoing challenges faced by the dairy sector in Karachi, as producers struggle with rising costs and tax pressures
