The government's recent decision to provide a loan of NPR 600 million to the Dairy Development Corporation (DDC) to settle the outstanding payments owed to milk-producing farmers is a step in the positive direction. This loan aims to clear the unpaid dues of the farmers. However, without proper monitoring of the distribution process, there is a risk that these funds may be misappropriated. Dairy farmers staged a series of protests after failing to receive the payments owed to them by various dairy industries and cooperatives. Although the government reached an agreement with the farmers, it did not take decisive action to ensure timely payment. The current government, recognizing the farmers' plight, provided a loan subsidy to the DDC. Now, it is the DDC's responsibility to ensure that the farmers are paid their dues.
Farmers spill milk on road to protest against DDC
However, given the DDC's past track record, relying on its management remains a challenge. Considering the track record of most government institutions and the tendencies of their employees, there is legitimate concern that not all farmers will receive the full remaining amounts. There is also a possibility that the funds could be diverted for employee salaries under various pretexts. Therefore, if the government truly intends to assist the farmers with this loan, it must actively monitor the disbursement process. The Ministry of Agriculture and Livestock Development must adopt a proactive stance in this regard. It would be prudent for the ministry to review the list of farmers entitled to receive the funds and ensure that the payments reach them directly. The situation must not escalate to the point where farmers feel compelled to protest again due to bureaucratic delays. If the funds are distributed under the supervision of local authorities, with assistance from the DDC and dairy cooperatives, the likelihood of farmers receiving their money will increase. The ministry must also be prepared to closely oversee the entire distribution process.
While the decision of the government to provide loan to DDC is expected to alleviate the plights of the farmers at least for now, it is perplexing why the DDC still owes large sums to farmers, despite purchasing milk on credit and selling it at a profit. Had the corporation not mismanaged the farmers' funds, this situation would not have arisen in the first place. The DDC claims that its cash shortage stems from unsold milk products, which highlights the weakness of its market management strategy. Bureaucratic inefficiency and corruption within the state-owned institutions are recurring issues. The DDC management must understand the fact that the government cannot always provide loan subsidies. The DDC must begin operating as a commercial and professional entity for it to remain commercially viable. By embracing staff reduction, advanced technology, and agile management practices, the DDC can become autonomous and capable, reducing its dependence on loans to repay debts.
