In major contradiction to promises made by Prime Minister Imran Khan of a citizen-friendly budget for the next fiscal year 2021-22, the government ripped off one of the most important things for the growth of children, namely the products dairy. .
Despite assurances of improving the dairy sector and continued demands by the dairy industry to make the dairy industry a zero-rated sector of the economy, the current government has taken a 180-degree turn and taxes are being taxed. increased from 10 percent to 17 percent for the next fiscal year 2021-22.
Dubbed the “nutritional tax”, the increased tax would be a burden on the poor population which is already crushed by rampant inflation in the country.
The finance bill presented on June 11 hit the dairy sector with a 7% increase in sales taxes compared to the existing 10%, on milk and dairy products such as butter, cheese, cream, fortified milk powders, tea whiteners, etc. it is difficult for ordinary people to access healthy and nutritious dairy products.
According to the data, milk and other dairy products make up around 26% of the kitchen budget, which means that this price hike would have the biggest impact on consumers’ daily lives. Pakistan produces around 59.7 billion tonnes of milk per year, which represents an informal market of $ 34 billion.
However, the quality of bulk milk is lower than normal because it is not regulated or controlled, and adulteration has a negative impact on health. Estimates show that around 20 percent of bulk milk is wasted because the proper cold chain refrigeration systems and distribution facilities are not available. This means that nearly 10 million tonnes of milk that has the potential to feed 4 million children daily is wasted.
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This shows that the dairy industry is undergoing a huge loss, with no pasteurization mechanisms in place in the bulk milk industry, resulting in a shorter shelf life and much of it is wasted before it hits the mark. ‘final user.
The high VAT will have an impact on the prices and therefore the demand of the dairy industry will be impacted as dairy products would become unaffordable for the poor already hit by inflation in Pakistan.
The sectors most affected due to the application of the 17% VAT include the cream industry with an impact of Rs700 million; the fortified dairy powders industry will also be impacted by 700 million rupees.
In addition, the 17% VAT would impact the yogurt industry of Rs 400 million, the flavored milk market of Rs 700 million and the tea cream market of Rs 1,500 million.
The negative impact of the tax would not be borne by large corporations but consumers, as producers would pass the tax burden on to people and product prices would rise for the already inflation-stricken poor.
Besides the monetary loss, there is an economic cost, which takes the form of a lack of nutrition among children, who are most vulnerable to such a policy.
According to UNICEF, “Almost 10 million Pakistani children are stunted. The UNICEF Pakistan Nutrition Report says: “Only 38% of children are exclusively breastfed for the first six months of life. As a result, more than half of children under five are deficient in vitamin A, 40 percent are deficient in both zinc and vitamin D, and nearly 62 percent are anemic.
Fortified products specially designed for infants and their mothers are one of the best solutions for this and Pakistani children, especially those from poor families, need to eat well.
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The current government and UNICEF Pakistan are focusing their support on the 1,000-day nutritional “window”, during which children’s nutritional deprivations can be reversed.
With this in mind in September 2020, Imran Khan launched the Ehsaas Nashonuma program, a conditional cash transfer program for health and nutrition focused on children’s health.
However, such a policy can be detrimental to the progress made by the Pakistani government.
With this in mind, the Pakistan Dairy Association issued a press release calling on the government to “Stop the nutrition of Pakistani children”.
The press release mentions that recent irrational tax policies are forcing the dairy sector to operate at only 50 percent of capacity. The press release also called on the Prime Minister and the Minister of Finance to unite to help the dairy industry be accessible and profitable for farmers, and help the industry fight malnutrition.
Thatcher, Thatcher, thief of milk
A similar thing happened in the 1970s in the UK. In June 1971 Margaret Thatcher, then education secretary in Edward Heath’s government, laid out her plan to end the provision of free school milk for those over seven in primary school. Although unpopular with many, and leading to the “Thatcher, Thatcher, Milk Thief” jibe, it became law in September.
Haddad says: “The abandonment of free school milk for children over seven in 1971 and then for all in 1980 was not a good thing. In fact, the 1980-2000 period is referred to as the “Era of No Nutritional Standards” for school meals and represents an extraordinary act of self-harm. “
In 1980, she became Prime Minister of the United Kingdom and was able to finish the job with a new Education Act, not only removing free school milk from all children, but removing minimum nutritional standards and obligation for local education authorities to provide a full meal service.
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This continued until Tony Blair, who is applauded for the reintroduction of such nutritional value programs.
Aside from the merits or drawbacks of Thatcher’s policies, Imran Khan should not aspire to adopt such an act in his government which makes milk expensive for children in Pakistan, and thus continue to fight for the health of the future. generations of Pakistan, for policies like the new VAT would be detrimental to its own goals.