Dairy farmers have suspended their protest after the Dairy Development Corporation (DDC) and dairy industries agreed to settle farmers’ pending dues. The six-point agreement was reached on Wednesday following discussions among representatives of the Ministry of Agriculture and Livestock Development, the Central Dairy Cooperative Association, the Dairy Development Corporation, the Dairy Industry Association, and the Nepal Dairy Association.
According to the agreement, dues up to the end of Ashadh (mid-July) will be paid by Ashoj 5 (September 21), dues up to the end of Shrawan (mid-August) by Ashoj 30 (October 16), and dues up to the end of Bhadra (mid-September) by the end of Kartik (mid-November). After that, regular payments will be made. Around NPR 3.5 billion is owed to farmers, said Ram Prasad Acharya, General Secretary of the Central Dairy Cooperative Association.
The agreement also includes provisions that the current quantity of milk being collected from dairy cooperatives will not be reduced. Furthermore, industries must purchase milk nationwide at the minimum price set by the government, provide consolidated details of skimmed milk powder (SMP) and butter stock within 10 days of the agreement to the Central Dairy Cooperative Association, and furnish annual data on the amount of milk collected and processed.
If industries fail to make payments as per the agreement, the Dairy Industry Association, the Nepal Dairy Association, and the Dairy Development Corporation will be held accountable. Farmers had resorted to street protests after not receiving nearly NPR 3.5 billion in payments for milk sold.
Both the state-owned DDC and private dairies had failed to pay, forcing farmers to protest. Farmers said they were compelled to agitate as they struggled to feed their cattle, pay bank interest, and cover household expenses without the payments. According to General Secretary Acharya, dues for about three to six months remain unpaid, totaling approximately NPR 3.5 billion—NPR 1 billion from DDC and NPR 2.5 billion from private dairies. Farmers complained that DDC has not made payments since Falgun (mid-February), while large private dairies also owe substantial sums.
Around 600,000 farmers affiliated with cooperatives supply 1.2 million liters of milk to the market daily. Including the informal sector, about 1.8 million liters of milk enter the market daily. The government’s minimum support price is set at NPR 65 per liter. The failure of the state-owned DDC to pay farmers has raised serious concerns. The corporation purchases around 200,000 liters of milk daily through 900 dairy cooperatives, channeling about NPR 10 million into rural areas every day.
Nepal produces 2,683,874 metric tons of milk annually. Farmers rear 1,063,000 milking cows and 1,251,323 milking buffaloes. Farmers have long complained that they do not receive fair prices based on production costs. A study by the National Dairy Development Board found that the cost of producing one liter of milk ranges from NPR 45.37 to NPR 67.07.
On average, 47.5% of expenses go toward fodder and straw, while 52.2% are spent on feed. Farmers argue that high costs for fodder, feed, and veterinary care prevent them from earning adequate returns on their investment.
