Unauthorized Dairy Imports From India Create a Market Crisis
Nepal’s dairy farmers are facing a severe financial crisis as unauthorized imports of dairy products from Indian border regions disrupt the local market. Despite the government setting the official price of milk with 4% fat and 8% Solid-Not-Fat (SNF) at Rs 65 per liter, many farmers are forced to sell their milk at a lower price due to unfair competition from cheaper imported products.
Private dairies, taking advantage of the availability of low-cost Indian dairy imports, are offering farmers Rs 3 less per liter than the government-mandated price. This price drop is pushing thousands of farmers into financial distress as they struggle to cover production costs.
A Deepening Crisis in Nepal’s Dairy Sector
The Chitwan District, a key dairy-producing hub in Nepal, exemplifies this crisis. The region produces 350,000 liters of milk daily, with 150,000 liters supplied to industries outside the district. However, despite this high production volume, farmers are facing unprecedented financial strain.
🔹 Unpaid Dues: Farmers have not received payments for their milk for the past six months, accumulating outstanding dues exceeding Rs 800 million.
🔹 Dairy Development Corporation (DDC) Delays: The DDC alone owes Rs 350 million, further adding to farmers’ financial woes.
🔹 Growing Frustration: With no resolution in sight, over 40,000 dairy farmers in the district have threatened to halt milk supply unless their demands are met.
The Role of Illegal Imports in Price Disruptions
The influx of cheap dairy products from India has disrupted Nepal’s dairy economy. While cross-border trade is a common practice, the unregulated influx of dairy products at lower prices has created an imbalance that disadvantages local farmers.
📌 Imported dairy products outcompete local milk prices, making it difficult for Nepali farmers to secure a fair rate.
📌 Many private dairy companies prioritize cheaper imports over sourcing from Nepali farmers, reducing demand for local milk.
📌 Farmers are struggling with surplus milk stocks while payments remain delayed.
Government Response: A Call for Intervention
Despite the growing crisis, the government has yet to take decisive action to protect local dairy farmers. Farmers are demanding:
✅ Regulation of dairy imports to prevent unfair market competition.
✅ Strict enforcement of government-set milk prices to ensure fair compensation for local producers.
✅ Timely payments from dairy corporations and the DDC to alleviate financial distress.
While the government has introduced a Rs 600 million credit facility to ease some financial pressure, farmers argue that this is a temporary fix rather than a long-term solution.
The Future of Nepal’s Dairy Industry: What’s Next?
The sustainability of Nepal’s dairy sector is at risk unless urgent action is taken to:
🔹 Strengthen domestic dairy policies and prevent price manipulation by private dairies.
🔹 Support local farmers with subsidies and guaranteed procurement policies.
🔹 Crack down on illegal imports and enforce stricter trade regulations.
With thousands of livelihoods at stake, the government must act swiftly to stabilize the dairy market and ensure Nepal’s dairy industry remains competitive and self-sufficient.
