Dairy Development Corporation (DDC) still owes around Rs 500 million to milk-producing farmers, even as Nepal enters its flush season—the period of peak milk production.
According to Mahananda Joshi, Information Officer at the Ministry of Agriculture and Livestock Development, the DDC recently paid Rs 300 million to farmers. He added that the state-owned corporation plans to clear about 80 percent of the remaining dues within the next three to four months.
For several years, both private dairies and the DDC have delayed payments to farmers. Last year, private dairies owed farmers Rs 2 billion, while the DDC failed to clear Rs 900 million on time.
Both private dairies and the DDC had stopped purchasing milk in previous years, citing excessive stock of unsold skimmed milk powder (SMP) and butter—forcing farmers to protest to demand timely payments.
Although dairy demand typically rises during festival seasons, helping clear old stock, farmers remain worried that delayed payments may continue this year as the main milk-producing season begins. With the arrival of winter, domestic milk consumption usually drops, resulting in rising SMP and butter inventories.
However, Joshi said the risk of payment problems is lower this year, as industries are not holding large stockpiles of dairy products.
Nepal experiences two distinct milk production seasons: a flush season from August to February with high production, and a lean season with sharply reduced output. In previous years, when private dairies halted milk purchases during the flush season, DDC had been compelled to absorb the surplus.
Government records show that Nepal produces around 7.2 million liters of fresh milk annually. Of this, 33 percent is sold through formal channels, while 17 percent is sold directly by farmers. Kathmandu Valley alone consumes around 500,000 liters of fresh milk daily.
Dairy entrepreneurs say mismatches between milk prices, market demand, and stock management continue to cause payment delays. They argue that improved technology in milk collection and better payment systems could help resolve longstanding issues faced by farmers.
