Before the pandemic, Nepal would chug down 3.2 million liters daily and would even utilize the powdered milk during peak conditions.

However, with the enforcement of prohibitory order, the urban areas are not nurturing demand for dairy products. As consumption has come down to 1.3 million liters, the rest of it is going down the drain.

With hostels, hotels, and other major urban areas shut down to curb the viral spread, the dairy farmers and entrepreneurs are bearing the financial brunt. With milk valued over NPR 100 million not finding any market, dairy farmers are no longer being paid on time.

Although excess milk can be converted to powder, Prahlad Dalal, general secretary of the Nepal Dairy Association, said that it is not optimal to convert it due to the existing surplus dairy products stock.

Dalal said, “The milk consumption was nearly restored to 90 percent after the end of the first lockdown of 2020. The consumption has (now) dropped to 40 percent since the enforcement of the latest prohibitory orders.”

The dairy industry had already converted the excess milk to powder and other dairy products in March 2020 when the first wave of the virus affected the country. Now, there is NPR 3 billion worth of milk powder and butter. Due to unsold surplus, the prospective conversion of milk to solids is no longer viable.

Speaking about the pandemic, Dahal said that the dairy entrepreneurs and farmers are adhering to the health standards set by the government and are providing their services with caution. The association has requested the government to vaccinate the essential staff members who collect, process and market the milk.

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So far, the coronavirus has infected around 2,099 people in Nepal, which is quite negligible compared to other countries. However, the pandemic has a profound impact even on essential sectors such as dairy.

The Nepali dairy sector has received a severe blow with the enforcement of nationwide lockdown.

Currently, the dairy sector is facing a loss of NPR 100 million daily due to the drastic decline in market demand.

According to the Nepal Dairy Association (NDA), dairy products worth NPR 5 billion are still in stock and are on the verge of deterioration.

The COVID-19 pandemic has closed hotels, restaurants, canteens and schools, and restricted special celebrations, parties and gatherings leading to the fall of the dairy market to 35%.

“We have lost 65% of our market, and farmers are throwing away milk worth NPR 100 million daily,” exclaimed Pralhad Dahal, NDA General Secretary.

In response, the Nepali Government has tried to alleviate some burden on the dairy entrepreneurs by introducing soft loans, exemption on electricity bills and import of raw materials through the Federal Budget for FY 2020/21.

Meanwhile, the NDA celebrated the ‘World Milk Day’ to expand access to milk and its consumption on June 1, 2020.

On the occasion, the NDA has distributed milk and other dairy products to hospitals, nursing homes, security personnel, and quarantine facilities across seven provinces in the country.

According to the NDA, the dairy industry contributes about 9% to the nation’s GDP. About 500,000 farmers are associated with the dairy sector, while over 20,000 people are directly involved in the dairy industry.

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Owing to the stringent lockdown implemented by the government, the milk and dairy products worth NPR 2 billion have been damaged.

According to the Dairy Association, dairy products worth NPR 5 billion are still in stock and seems on the verge of deterioration.

Meanwhile, the Dairy Association has discussed the ‘dairy concerns’ with the Association Chairpersons in the seven provinces of the country through video conference on April 15, 2020.

“The supply of milk and dairy products has reduced by 75% in the urban areas since the lockdown was imposed to stem the spread of the Coronavirus,” said Pralhad Dahal, Nepal Dairy Association General Secretary.

The Association has requested the Nepali Government to implement strategies to mitigate the wastage of the milk and dairy products.

Likewise, it requested the government to help the dairy business and farmers by managing zero-interest loan and waiving VAT and taxes.

Moreover, Pralhad Dahal urged the Federal and State Governments to include dairy products in relief package to be provided by the government.

So far, Nepal has reported 14 coronavirus positive cases. However, the first case has already recovered and discharged.

As of today, the coronavirus has spread to 210 countries and territories around the world and infected 2,005,539 people while claiming 126,858 lives.

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The Nepal Dairy Association (NDA) disclosed these statistics at the 20^th National General Assembly held in Birendranagar.

According to NDA, Nepal’s dairy companies pay NPR one billion per year as revenue to the government. Moreover, rural areas supply milk worth NPR 30 million to urban dairy centres on a day-to-day basis.

Following are the statistics of Nepal’s dairy contribution:

• Currently, Nepal produces five million litres of milk per day wherein farmers alone consume around 50 percent of the produce
• According to NDA General Secretary Prahlad Dahal, 500,000 farmer families are associated with the dairy industry and over 30,000 are directly involved in milk production

Most people associated with the business expressed their concern stating that despite the industry valuable contribution to the GDP, the dairy business is yet to get the deserved recognition from the state.

Dahal also added that the government’s decision to withdraw 50 percent value added tax exemption facility has made it difficult for dairies to compete with imported products.

Meanwhile, Karnali Province’s dairy business seems to be performing low. The province is contributing to only 50 percent of the market demand.

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Due to inadequate milk production, the country is currently witnessing a deficit of around 100,000 liters of milk per day.

According to the dairy stakeholders, average milk supply in the country is currently around 700,000 liters per day whereas the demand stands at around 800,000 liters per day.

“Milk supplied by dairy farmers during the lean season is not sufficient to cater to the market demand, as milk consumption is going up. To fulfil this deficit, we should rely on powder milk to produce milk,” says Arniko Rajbhandari, director of Nepal Dairy.

20% Demand Met Through Imports

The excess milk stock stored during the peak season is utilized for making powder milk to meet the supply shortage, however, that is not sufficient to meet the demand during the lean season.

Therefore, 20 percent of the milk demand in the country during the lean season is met through imports from India.

“The government should focus on building capacity of cattle farmers and introducing new farming technology to preserve milk produced in the country. It should also transfer knowledge and skills on ways to preserve calves,” Sumit Kedia, president of the Nepal Dairy Association

Milk production in the country declines to around 490,000 liters per day during the lean production season (April-August in Nepal), whereas, it goes up to 875,00 liters/day during the peak season (September-March).

According to the Department of Livestock data, Nepal’s annual milk production is growing by around 4 percent, however, the demand is rocketing at an annual rate of 8 percent.

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