Nepal | January 26, 2021

MoALD asks MoF to manage loans for farmers

Himalayan News Service
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The Ministry of Agriculture and Livestock Development (MoALD) has requested the Ministry of Finance (MoF) to arrange a provision for farmers to receive loans on the basis of their products.

In a letter to the MoF on July 7, MoALD made a request to introduce a provision whereby dairy farmers will be able to avail loans from banks by keeping their products or livestock as collateral.

According to MoALD, dairy farmers are facing problems due to COVID-19 and their products and livestock are the only assets they can put up for collateral to take loans.

Hence, MoALD has requested MoF to arrange for easy loan access for dairy farmers based on their products and livestock.

As Nepal Rastra Bank (NRB) is in the process of preparing the Monetary Policy for the next fiscal year, MoALD has requested for the aforementioned provision to be included.

The letter has mentioned that the proposal has been made based on the decision taken during a meeting of MoALD.

Prior to this, Nepal Dairy Association (NDA) and Dairy Development Board (DDB) had also raised this issue and requested MoALD to urge MoF to introduce this provision not only to sustain their businesses but for the benefit of farmers as well.

As per NDA, the dairy industry has lost around 80 per cent of market during this lockdown period. Due to the lockdown, all large consumers like party palaces, schools, hotels, restaurants, cafés and canteens are closed at the moment due to which consumption has declined drastically.

As per the association, there is an investment of around Rs 30 billion in the dairy industry. It also stated that approximately 500,000 farmer households are directly or indirectly involved, while around 20,000 people are directly employed in the industry.

Hence, to secure the farmers, investment of factories and jobs in the sector, MoALD had sent the letter to the MoF on the basis of frequent meetings held with DDB and NDA.

A version of this article appears in e-paper on July 12, 2020, of The Himalayan Times.

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