Dairy entrepreneurs want relief package in upcoming budget

Published On: May 25, 2020 08:55 PM NPT By: Republica | @RepublicaNepal

A dairy entrepreneur from Kavre. File photo: Republica

KATHMANDU, May 25: Dairy entrepreneurs are seeking relief packages from the government through the upcoming budget for fiscal year 2020/21.

Stating that the dairy industry has already sustained a total loss of about Rs 5 billion due to the ongoing lockdown, they have said that the sales have dropped by as much as 80 percent. The lockdown started just when it was the beginning of the season for the dairy industry and the biggest consumers of dairy products such as party palaces, schools, hotels, restaurants and canteens are shut.

According to Nepal Dairy Association (NDA), dairy products like butter and skim milk powder (SMP) worth Rs 5 billion in store for consumption during the season will expire in the next five months. The entrepreneurs say that these products have been dumped, leaving them unable to pay the farmers while expenses like rent, staff salary, bank interest and electricity bills are still the same. They have demanded concessional loans from banks without collaterals for at least the next five years.

They have also demanded that the loan terms be increased along with the lowering down of the interest on loans for the lockdown period. “The policy of exempting 50 percent of the electricity bill and VAT needs to be implemented again,” said Pralhad Dahal, general secretary of NDA, “If any dairy enterprise has not received a concessional loan, then such loans need to be converted into concessional loans.”

Issuing a statement on Monday, NDA said that the government rather than prioritizing concessional loans to new enterprises, should create an environment to make the existing dairy enterprises self-reliant by increasing their capacities which are between 40 and 50 percent at present. According to the association, employment opportunities for at least 20,000 people can be created by the existing dairy businesses.

“The government should refrain from imposing fines on electricity bills, telephone bills, internet bills during the lockdown period and company renewal for a year,” Dahal told Republica Online, adding that the dairy businesses should get a loan of Rs 50 million to Rs 100 million and the interest should be decreased to 2 percent.

NDA had demanded inclusion of dairy products in the diet of the army, police and other people getting food at government offices.

According to NDA, about 500,00 farmers are associated with the dairy industry, while more than 20,000 people are employed by dairy enterprises. Dahal said, “More than Rs 50 million flows out of the Kathmandu valley to other parts of the country daily through the ecosystem of the dairy industry which contributes about nine percent to the country’s GDP.” He added that the government needs to step in and announce a relief package through the budget plan to save the dairy sector.