Nepali dairy farmers are facing an escalating crisis that threatens both their livelihoods and the sustainability of the country’s milk industry. The situation has only worsened as the state-owned Dairy Development Corporation (DDC) has also failed to clear dues of around Rs 500 million owed to farmers. Private dairies also owe much bigger amounts to dairy farmers. For years, milk producers have endured chronic delays in payments from both private dairies and the DDC. Last year alone, private dairies owed nearly Rs 2 billion, while the DDC delayed payments of Rs 900 million. Both entities had halted milk purchases from farmers, citing a surplus of unsold skimmed milk powder and butter—a move that forced desperate farmers onto the streets in protest. Typically, festive seasons help clear old stock, but this year, farmers fear a repeat of delayed payments despite the onset of the high-production period. As winter approaches, domestic milk consumption usually declines, increasing stockpiles of powdered milk and butter. Nepal experiences two distinct milk production seasons—flush (August to February), which brings oversupply and lean, when production drops sharply. In past years, when private dairies stopped buying milk during the flush season, the DDC was compelled to absorb the surplus.
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Dairy entrepreneurs blame a persistent mismatch between milk prices, market demand, and stock management for the payment delays. The government’s failure to ensure timely payments and safeguard farmers’ rights is already driving many away from dairy farming—a profession once considered vital to rural livelihoods. Earlier this year, the government fixed the official price of milk at Rs 65 per liter for milk containing 4 percent fat and 8 percent solid-not-fat (SNF), aiming to protect farmers’ income. Yet, farmers report that private dairies are buying milk at Rs 3 less than the official rate. They also accuse authorities of turning a blind eye to the illegal import of cheaper milk across border regions, which has further distorted the domestic market. Farmers, caught between unpaid dues and undercut prices, say they are being forced to sell milk below cost while waiting months for payments. Unless both the DDC and private dairies immediately clear outstanding payments, many fear they will have no choice but to abandon dairy farming altogether.
The government must step in and protect the interests of local farmers who form the backbone of Nepal’s dairy industry. There needs to be stricter enforcement of laws regarding illegal imports of dairy products. The government must ensure that the price set for milk is respected by both private dairies and cooperatives and that farmers are compensated fairly and timely. It is equally important that the DDC and private dairies settle the outstanding dues to the farmers without further delay. These moves will not only restore trust in the system but also help farmers overcome the financial hardships they are facing. The government authorities concerned must work towards addressing the issues faced by dairy farmers and protect their interests. Failure to do so will only drive farmers away from their profession. The time to act is now.
