Kathmandu, September 10

The Ministry of Finance (MoF) has approved grant worth Rs 16.09 million to export milk during flush season to avoid the milk holiday in the country. The National Dairy Development Board (NDDB) — a policy-making body for dairy development in Nepal — had proposed MoF to extend grant to export milk to Patna of India for three months to safeguard milk farmers’ income.

“Due to the easy availability of cattle feed (like green grass), the production of milk increases, which is known as the flush season and this season continues till December,” explained Babu Kaji Panta, executive director of NDDB, adding, “Currently, around 30,000 litres of surplus milk is being produced every day that we are planning to export.”

The grant that MoF has approved will be utilised to cover the transportation costs and market rate adjustment costs — which amounts to Rs 5.96 per litre — for the milk that will be exported to Patna, India.

Though MoF has approved the grant amount that NDDB had sought, MoF has said that it needs the Cabinet’s nod to release the additional budget. Ministry of Agricultural Development (MoAD), the parent ministry of NDDB, will submit the proposal to receive the grant to export milk.

“Most probably the next meeting of the Cabinet will endorse it,” a high-level source at MoAD told The Himalayan Times.

Once the Cabinet approves the proposal, NDDB will allow the government-owned Dairy Development Corporation (DDC) to export milk. DDC has shown willingness to export milk as it has already produced more than sufficient milk powder, butter, among other products to cater to the local demand.

After the devastating earthquake of April 25, as the number of people leaving the Valley surged and the demand for milk dwindled, DDC had utilised the surplus milk to produce milk powder and butter.

Currently, DDC and other private dairy plants report of having 1,200 tonnes of milk powder and 1,400 tonnes of butter in stock.

“DDC used to distribute 135,000 litres of milk per day before the earthquake, and the distribution dipped to as low as 50,000 litres per day for a month after the April quake,” said Ganga Timsina, general manager of DDC, adding, “We utilised the milk collected from farmers to produce milk powder and butter as well as other products.”

As per Timsina, the sale of milk currently stands at 118,000 litres per day. NDDB has said that milk export is not a durable solution and the government cannot extend grant for an extended period of time.

“The government has adopted this measure as an immediate rescue to avoid milk holiday which can have an adverse impact on farmers involved in milk production and also on the dairy industry over the long run,” NDDB’s Executive Director Panta said.

NDDB has advised the government to bring Chitwon Milk Pvt Ltd into operation.

Chitwon Milk has the highest capacity of producing dairy whitener, milk powder compared to other plants in the country. Chitwon Milk, owned by Chitwon CO-E Nepal, was shut down on August 17 this year citing heavy losses due to higher production cost of milk powder, dairy whitener, among others, compared to imported products.