Crisis in Nepal's Dairy Sector as Unpaid Farmers Prepare for Protests Amid Economic Slowdown
Source: The DairyNews
The dairy sector in Nepal is facing a potential crisis as both state-owned and private dairy companies have reportedly failed to pay around Rs6 billion to farmers.
The economic slowdown, compounded by the aftermath of the Covid-19 pandemic and the lumpy skin disease affecting cattle, has resulted in a surplus of milk products. Despite converting excess milk into powdered form and butter, the subdued market demand has left tons of dairy products languishing in warehouses.
Farmers, who have not received payments for the past five months, are now gearing up for protests against the government. The unpaid dues, totaling Rs6 billion, pose significant challenges for farmers who rely on income from milk sales as their primary source of livelihood.
Dairy farmers, representing 15 associations, announced a phase-wise protest that will commence in Kathmandu on February 25. The protest includes a two-day sit-in starting February 26 and a transportation strike on major highways on February 29. If the government fails to settle the dues by March 4, the protest is expected to escalate nationwide.
The economic slowdown has significantly impacted the dairy industry, leading to a decline in cash flow for dairy companies. The situation is further exacerbated by the surplus of dairy products, including powdered milk and butter, in stock due to reduced consumption.
While the dairy industry is hopeful for a turnaround with the onset of summer, which typically boosts milk consumption, the unpaid farmers are facing challenges in meeting household expenses and servicing loans. Farmers have dumped milk on the streets in some districts as a form of protest.
The state-owned Dairy Development Corporation and private dairy companies are grappling with unsold stocks of butter and powdered milk, with cash flow constraints hindering their ability to pay farmers. The Dairy Development Corporation reported an unsold stock worth Rs1.10 billion, emphasizing that payments to farmers would be challenging until the surplus stock is cleared.
To address the economic challenges, the Dairy Development Corporation is exploring options such as reducing dairy product prices to boost consumption and seeking a subsidized loan against the stock of powdered milk and butter. The ongoing economic slowdown has eroded people's buying capacity, contributing to the accumulation of dairy products.
The situation highlights the need for coordinated efforts between the government, dairy industry, and farmers to find sustainable solutions and support the recovery of Nepal's dairy sector.
Farmers, who have not received payments for the past five months, are now gearing up for protests against the government. The unpaid dues, totaling Rs6 billion, pose significant challenges for farmers who rely on income from milk sales as their primary source of livelihood.
Dairy farmers, representing 15 associations, announced a phase-wise protest that will commence in Kathmandu on February 25. The protest includes a two-day sit-in starting February 26 and a transportation strike on major highways on February 29. If the government fails to settle the dues by March 4, the protest is expected to escalate nationwide.
The economic slowdown has significantly impacted the dairy industry, leading to a decline in cash flow for dairy companies. The situation is further exacerbated by the surplus of dairy products, including powdered milk and butter, in stock due to reduced consumption.
While the dairy industry is hopeful for a turnaround with the onset of summer, which typically boosts milk consumption, the unpaid farmers are facing challenges in meeting household expenses and servicing loans. Farmers have dumped milk on the streets in some districts as a form of protest.
The state-owned Dairy Development Corporation and private dairy companies are grappling with unsold stocks of butter and powdered milk, with cash flow constraints hindering their ability to pay farmers. The Dairy Development Corporation reported an unsold stock worth Rs1.10 billion, emphasizing that payments to farmers would be challenging until the surplus stock is cleared.
To address the economic challenges, the Dairy Development Corporation is exploring options such as reducing dairy product prices to boost consumption and seeking a subsidized loan against the stock of powdered milk and butter. The ongoing economic slowdown has eroded people's buying capacity, contributing to the accumulation of dairy products.
The situation highlights the need for coordinated efforts between the government, dairy industry, and farmers to find sustainable solutions and support the recovery of Nepal's dairy sector.
23.09.2024
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