Dairy producers have dairy products worth nearly Rs 5 billion in stock due to lack of demand amid nationwide lockdown enforced by the government to contain the spread of COVID-19.
According to Nepal Dairy Association (NDA), dairy producers have faced losses worth Rs 2 billion on milk alone. “Altogether, producers across the country have nearly Rs 5 billion worth of dairy products in stock,” Pralhad Dahal, the general secretary of the NDA, said. He added that only 30% of total production across the country is being consumed at the moment. “Dairy producers must collect milk from farmers. But there is no demand in the market at present due to the lockdown,” he added.
Inventory of dairy producers is piling up amid surplus in supply and falling demand. “Dairy firms across the country have huge amount of butter, skimmed milk and processed milk, in stock,” he said, adding: “Many dairy firms have already used up their storage facilities. If our products are not sold, how are we going to pay farmers?”
The association on Tuesday video conferencing with chairpersons of its seven provincial chapters to discuss about the situation.
Though the lockdown has not affected transportation of dairy products, dairy producers are facing problem due to restriction in movement of staffers and limited shopping hours in the market amid lockdown.
Dairy producers say that they will have to close their factories if demand keeps falling. Many dairy industrialists and farmers will quit their profession if the government does not intervene on time with appropriate relief measures for the dairy sector, they added.
“It is becoming difficult for dairy producers to arrange funds for paying farmers,” Dahal said. “We want assurances from the government that this sector will be looked after as it contributes nearly 9% to gross domestic production of the country.”
Among others, dairy producers have urged the government to provide interest-free loans, waive off VAT and ensure easy availability of livestock feed. “Many farmers are facing problem due to lack of feed for their livestock. The government should look into the matter seriously,” Dahal added.
While total sales have dropped by nearly 70%, the decision of the Bagmati Province Government to include half kilogram of ghee in relief package has helped dairy sector a little. They have urged the government to include dairy products like ghee and paneer (cottage cheese)
The NDA has stated that the sales of dairy products has gone down by 70% but Bagmati Province’s decision to include half kilograms of ghee in the relief package has uplifted farmers and industrialists a little.
Meanwhile, dairy producers have requested the government to include dairy products like ghee and paneer in relief package to be distributed to needy people.
According to NDA, about 500,000 farmers are associated in the sector, while more than 30,000 people are directly involved in dairy industries.