Kathmandu, June 1

In a bid to promote commercial livestock farming and milk production in the country, the government is set to subsidise dairy farmers for milk production from the starting of new fiscal year 2017-18.

The Ministry of Livestock Development (MoLD) had already passed a working guideline to provide farmers with subsidy of one rupee per litre on milk production. However, only those farmers selling milk through cooperatives will be eligible for the subsidy programme of the government.

“We are in the last stage of analysing the proposal of different dairy cooperatives for the subsidy. We will soon announce the names of cooperatives meeting the criteria for the subsidy programme and start subsidising milk producers from the beginning of the new fiscal year,” said Shyam Prasad Poudel, spokesperson for MoLD.

As per the working guideline prepared by MoLD, only those cooperatives selling at least 500 litres of milk in a day will be eligible to get the government subsidy. Though the government earlier had stated in the working guideline that only those cooperatives selling at least 3,500 litres of milk in a day would get subsidy, MoLD had reduced cap for dairy cooperatives to 500 litres per day.

In the first phase, the government is implementing the subsidy programme in 10 major milk producing districts like Chitwan, Kavrepalanchowk and Dhading, among others. Gradually, the subsidy on milk will be given to all livestock farmers across the country, according to Poudel.

MoLD has allocated Rs 70 million for the subsidy programme. MoLD officials have said that the subsidy programme on milk production will encourage livestock farmers for commercial production of milk and help country be self reliant in milk. The government has targeted to make Nepal self sufficient in milk by 2020.

As a result of low local production of milk, different dairy firms in the country have been importing milk powder worth Rs two billion annually. Moreover, the state-owned dairy producer — Dairy Development Corporation (DDC) — has begun importing almost 20,000 litres of fresh milk per day from India from the beginning of May.

Narayan Devkota, president of Central Dairy Cooperatives’ Association, said that livestock farmers have been gradually opting out of the dairy business due to the high cost of milk production in recent years. “The cost of livestock farming is increasing every year but farmers are paid very low for milk. In such a context, farmers are compelled to quit livestock farming,” Devkota said, adding the government should increase price of milk targeting farmers as soon as possible. While lauding government’s programme to subsidise milk producers, he was, nonetheless, sceptical it would be implemented effectively.