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Govt may hike milk price as production cost rises

Govt may hike milk price as production cost rises

KHATMANDU: The government is gearing up to hike the price of milk within a month considering the demand from farmers.

Citing that the cost of livestock farming has gone up significantly in recent years while milk price given to farmers has not increased for the last three years, dairy farmers who are paid an average of Rs 42 for a litre of milk have been demanding an increase in price to Rs 54 per litre.

“The Dairy Development Board (DDB) has recently submitted a study report suggesting the government to hike milk price. The government will allow DDB to increase the price of milk after thoroughly analysing the report,” said Shyam Prasad Poudel, spokesperson for the Ministry of Livestock Development (MoLD). However, he refused to disclose the new adjustment rate in milk price recommended by the board.

As is the usual practice, the state-owned Dairy Development Corporation (DDC) will adjust the price of milk following a go-ahead from the DDB and private dairies will revise the price within one or two days as per the rate set by DDC.

Currently, dairy firms have been selling milk with three per cent fat and eight per cent solid-not-fat (SNF) at Rs 64 per litre in the market while milk with five per cent fat and eight per cent SNF is sold at Rs 80 per litre.

Ganga Timsina, general manager of DDC, said that the price hike in milk is necessary not only because the production cost of farmers has increased but also due to surging production cost of dairy companies. However, he informed that almost 70 per cent of the hiked price will go to farmers and only 30 per cent will go to dairy firms.

The government last increased the price of milk by up to Rs 10 per litre in December of 2014. The government had then increased the price by eight rupees per litre for milk with three per cent fat and eight per cent SNF and by Rs 10 per litre for milk with five per cent fat and eight per cent SNF.

Meanwhile, livestock farmers have said that they should get at least Rs 50 for a litre of milk to sustain their business. “The milk production cost has exceeded Rs 50 per litre while dairy companies have been paying merely Rs 42 or Rs 43 to farmers. If farmers are not given logical increment in the price of milk, it is certain that a number of farmers will leave the business,” said Narayan Devkota, president of Central Dairy Cooperatives’ Association.

As per the statistics of MoLD, the country is currently producing an average of 1.8 million metric tonnes of milk annually. As per Poudel of MoLD, Nepal is more than 80 per cent self-sufficient in milk while the country imports some amount of fresh milk from India during off-seasons.