Kathmandu, March 14

With an aim to promote commercial production of milk in the country, the government is set to provide subsidy to dairy farmers on milk production.

The Ministry of Livestock Development (MoLD) recently prepared a working guideline to provide farmers with subsidy of one rupee per litre of milk. However, the guideline is yet to be endorsed by MoLD.

“The new programme intends to primarily promote commercial livestock farming and milk production in Nepal. It will directly benefit dairy farmers,” Shyam Prasad Poudel, spokesperson for MoLD, said.

MoLD has allocated Rs 70 million for the subsidy programme for the ongoing fiscal year and the ministry plans to run this subsidy programme as a pilot project in major milk producing districts like Kavre and Chitwan, among others, in the first phase.

As per the draft of the working guideline, farmers will have to sell milk via dairy cooperatives to become eligible for the subsidy. Similarly, only those dairy cooperatives selling at least 500 litres of milk in a day can claim government subsidy.

“As we have limited budget allocated for the subsidy project this fiscal year, the programme will basically

be targeted at farmers in areas with high milk production rate in the first phase,” Poudel said, adding that the MoLD will gradually expand the subsidy programme to farmers across the country.

In the preliminary draft of the working guideline, the government had said the subsidy would be provided only to farmers affiliated with dairy cooperatives that sell at least 3,500 litres of milk in a day.

Following criticism from stakeholders that such a huge cap would leave out all small milk producers from the scheme, MoLD had reduced the cap for dairy cooperatives to 500 litres a day.

MoLD has said that it plans to soon seek proposals from dairy cooperatives for the milk subsidy programme. However, MoLD will award the scheme only to selected dairy cooperatives this fiscal due to budget limitation, according to Poudel.

Meanwhile, the ministry officials have said that the milk subsidy programme would help the government to achieve its goal of making Nepal self-sufficient in milk by 2020.

Due to lack of adequate domestic production of milk, Nepal has been importing milk powder worth almost Rs two billion annually to meet the domestic demand.