KATHMANDU, Nov 8: Dairy Development Corporation (DDC) is still left to clear around Rs 500 million in dues of milk-producing farmers amid the start of the flush season of milk production inside the country.
Mahananda Joshi, information officer for the Ministry of Agriculture and Livestock Development, said recently the DDC paid Rs 300 million to the farmers. According to him, the state-owned organization is all set to clear 80 percent of the leftover amount in the next 3-4 months.
For the past few years, milk producers have been suffering from delayed payments by both the private dairies and the DDC. Last year, private dairies owed Rs 2 billion to farmers, while the DDC did not clear Rs 900 million to farmers on time.
Farmers spill milk on road to protest against DDC
The private dairies and the DDC did not purchase milk from farmers on the pretext of having excess stock of unsold powder milk and butter. It forced the farmers to stage protests to pressure the concerned.
Although the festive seasons help clear the previous stock of dairy products, farmers fear delayed payments this year too, with the onset of the main milk-producing season. With the onset of winter, domestic milk consumption typically declines, leading to a rise in skimmed milk powder (SMP) and butter stockpiles.
Joshi however said the chance of a non-payment problem this year seems low as the industries do not hold excess dairy products with them.
Nepal has two distinct milk production seasons—flush and lean. The flush season, from August to February, leads to oversupply, while production drops sharply during the lean months. In previous years, when private dairies stopped buying milk during the flush season, DDC was compelled to purchase the surplus.
As per the government records, around 7.2 million liters of fresh milk is produced throughout the year. Of the total production, about 33 percent is sold through formal channel while 17 percent is sold by the farmers themselves. Kathmandu Valley alone observes 500,000 liters of fresh milk daily.
Dairy entrepreneurs, the mismatch in milk price, market demand and stock management creates hurdles to timely payment to the farmers. According to them, a technology-friendly collection system and an improvement in the payment management system could help solve this problem.
