Dairy Farmers in Dhankuta and Tehrathum Struggle as Unpaid Dues Reach Rs140 Million

The DDC, which owes more than Rs140 million to farmers in these districts, collects over 3,000 litres of milk daily from various collection centres, including Hile Bazar and Sagarmatha Dairy Cooperative in Chhathar Jorpati Rural Municipality, Dhankuta.

The non-payment has severely impacted farmers who rely on their dairy income to cover essential household expenses. Most farmers have made significant investments, ranging between Rs1 million and Rs5 million, with many taking out bank loans to improve their livestock and dairy production, according to Prem Bahadur Darlami, a local dairy farmer.

Bhim Mahatara, a farmer from Mahalaxmi Municipality, expressed his concern over the lack of payment. “The DDC has repeatedly promised to pay, but after ten months, we have received nothing,” he said. Dairy farmers in other parts of Dhankuta and Tehrathum, including Murtidhunga, Marekkatahare, and Basantapur, are facing similar issues. In response, the Dhankuta Dairy Association has organized protests and submitted a memorandum to the chief minister of Koshi Province, demanding immediate action.

The DDC’s Biratnagar unit claims the delay in payments is due to its struggle to sell dairy products. The district produces approximately 44,098 litres of milk daily, with 32,100 litres reaching the market.

Lumbini Dairy Farmers Facing Similar Struggles

Dairy farmers in Lumbini are facing similar financial challenges. Khagishwar Pandey, a farmer from Siddhartha Dairy Producers Association, shared his frustration over accumulating debts due to unpaid dues from the DDC. Pandey, who is owed Rs300,000, explained that the delay in payments has made it difficult to cover livestock expenses, and he is now struggling to feed his cows.

Bhoj Raj Pandey, another farmer from Tilottama Municipality, is owed Rs400,000 by the DDC. Despite selling 125 litres of milk daily, he lamented the lack of support for farmers, saying, “We are trying to run our businesses, but the government does not provide timely payments.”

According to Lekh Nath Pandey, president of the District Dairy Producers Cooperative Association in Tilottama, the Lumbini Dairy Distribution Project owes Rs120 million to farmers in Nawalparasi and Kapilvastu districts. Private dairies owe an additional Rs30 million to local farmers. He warned that despite the country’s potential to become self-sufficient in milk production, delayed payments threaten the survival of small dairy farmers.

Government Intervention and Stockpile Issues

In response to the growing crisis, the government has approved a Rs600 million loan to the DDC to help pay its debts to farmers. The DDC had requested this subsidized loan from the Ministry of Agriculture and Livestock Development, offering its stockpile of butter and powdered milk, valued at Rs1 billion, as collateral.

Dairy companies, both state-owned and private, have been converting unsold milk into butter and powdered milk due to the declining demand. However, the slowdown in the market has resulted in large quantities of these products piling up in warehouses. The economic downturn has further exacerbated the situation, dampening dairy demand and stopping the cash flow needed to pay farmers.

According to estimates by the National Peasants’ Coalition Nepal, the collective unpaid dues owed to farmers by both the DDC and private dairies have reached Rs6.5 billion. This has created a financial crisis for farmers who depend on dairy income to pay for their children’s education, medical expenses, and livestock fodder.

With Nepal producing over 6 million litres of milk daily and the DDC purchasing around 25% of this output, the delay in payments and the oversupply of dairy products have left the industry on the brink of collapse.