March 9: The price of milk between the government and industry! 'Only 65 rupees for farmers, 35 rupees margin for middlemen'

The consumer price of milk has reached Rs 100 per liter. Dairymen and industrialists have increased the price of milk by Rs 14 per liter, putting a heavy burden on the consumers. Until now, the price of milk was Rs 86 per liter.

A cabinet meeting held on last Friday had decided to increase the price of milk for farmers by Rs 8.86 per liter while the dairy industry increased the price by Rs 14 per liter.

Two months ago, the dairy industrialists had unilaterally increased the price of milk by Rs 14 per litre arguing that the increase in the prices of cattle feed like grain, straw, bran among others had increased the cost of production.

However, they decided to roll back the price following widespread criticism.

After a scientific study of the market price, the cost of production and inflation, the Dairy Development Board submitted a proposal recommending the government to increase the price of milk by Rs 10 per litre. But, the government decided to hike the price of milk by Rs 14 per litre as per the suggestion of the industrialists.

Rajkumar Dahal, president of the Dairy Industry Association, said that the consumer price of milk has increased with effect from Thursday. He informed that private sector dairies have already increased the price of milk while the government-owned Dairy Development Corporation will set the new price by Sunday.

According to the price fixed by the government at the level for the farmers, traders have to pay Rs 65.50 per liter to the farmers to purchase milk.

The cost of milk reaches Rs 70 per litre when it comes to the industrialist after adding the collection charge, the organization promotion charge and the transportation cost.

The industrialists then transport milk from the outer districts to the market in Kathmandu Rs 14 as transportation cost. The milk is then sold at a retail price of Rs 100 per litre in the market.

Consumer rights activists have criticized the price hike stating that it is against the Dairy  Development Policy and is not in the interest of the farmers and consumers. According to the Dairy Development Policy 2078, the price of milk can be revised every two years based on a study report of the Dairy Development Board. The consumer rights activists have concluded that the price of milk has been increased in collusion between the government and middlemen.

Madhav Timilsina, president of the Consumer Rights Forum, said that there is a lot of reason to suspect collusion between the government and the industry.

According to him, instead of raising the price that benefits the industrialists and traders, it is necessary for the government to focus on farmer-centric programs such as providing subsidized loans to the farmers and providing them with advanced breed cattle.

He said that the decision to increase the price of milk seems to have benefitted the middlemen more than the farmers.