Kathmandu, August 4:

Sujal Dairy and Laxmi Bank Ltd signed an agreement today to bring an end to the problem of Milk Holiday, boost milk production and facilitate farmers engaged in the dairy sector.

According to the agreement, farmers will be granted a loan for 1,000 milk cows and buffaloes.

The Milk Production Co-operatives Group will provide loan without any security to the farmers.

Suman Joshi, Laxmi Bank chief executive officer said, “We will provide a loan of Rs 30,000 initially to a farmer. However, if the need increases and we are convinced that the farmerr’s case is genuine, we will consider it and increase the amount to Rs 60,000 if he or she wants to go commercial.”

“Under the micro-finance programme, we will grant a loan for 1,000 milch cows and buffaloes. The number of head of milch cattle can be increased to 5,000 late r, “Joshi said.

“The interest rate has been fixed at nine per cent, making it convenient for the farmers to

repay the loan and work off the interest,” said Ajay Bikram Shah, head of retail financial services at Laxmi Bank.

However, Bhagwan Thapa, of the Farmers’ Development Dairy Production Cooperative expressed dissatisfaction at the interest rate fixed by the bank.

Thapa said,”This dairy development programme is mainly focused on the rural areas where people hardly have more than Rs 20,000 savings. So, personally I think the interest rate should be kept down to just five per cent in order to make it convenient for the farmers and help to make more investment in their business.”

Talking about the current volume of milk production in Nepal, Sujal Dairy executive director

Niranjan Shrestha said that to really figure as a significant sector the powder milk industry needed to produce at least one lakh litres of milk daily.

He added, “Right now, we have a daily production volume of 25,000 litres of milk only. Also, there is the problem that during the dry season we are forced to stop production for at least 4-5 days, and we also do not have the sufficient number of good breeds of milch cows or buffaloes.”

“In Nepal, there are only 20,000 cows and as we need 1,000 cows and buffaloes for the farmers it will generate a milch cattle scarcity. To provide 1,000 cows, it would be imperative to import more than 700 cows from India but that would be deemed illegal,” Shrestha said.

He said, “Although we have repeatedly urged the government to simplify the procedures of importing good and productive milch breeds from other countries, it has shown no interest in heeding our demand.”Shrestha said due to the government’s apathy milk farmers had been left with no option but to import good milch breeds through unauthorised channels .