July 8: Dairy farmers in Nepal are skeptical about the execution of a recent agreement for the payment of overdue milk arrears. Despite multiple agreements between the government, farmers, and industrialists, the farmers have yet to receive the due payments. The latest agreement, reached on June 30, stipulated that industrialists would clear the dues up to April 12 by July 11. However, a week after the agreement, no payments have been made.

Thaneshwar Sapkota, chairman of the Central Milk Producers Cooperative Association, noted that although the agreement promised payment by July 11, farmers have not received any payment. Doubts persist as previous agreements on December 12 and March 2 also failed to materialize.

Kishore Bagale, chairman of the Chitwan District Milk Producers Cooperative Association, expressed his lack of confidence in the implementation of the agreement, citing the industrialists' failure to sell milk products as the reason for non-payment.

The Dairy Development Corporation (DDC), a government entity, has not made payments either, and private dairies have also withheld payments.

Bagale revealed he owes Rs 700,000 from various dairies over three months and threatened of "milk holidays" if farmers are not paid on time.

Farmers owe approximately Rs 4 billion from the DDC and private dairy industry, with the DDC's dues is about Rs 2 billion. Farmers protested in Kathmandu for payment despite the government’s crackdowns. The latest agreement sets a deadline of July 11 for the dairy industry to clear the arrears owed up to April 12. Additionally, arrears up to May 13 and June 14 must be paid by September 16, with future payments to be made in bi-monthly installments.

Ram Prasad Acharya, general secretary of the Central Milk Producers Cooperative Association, warned that if the agreement is not honored, the government should penalize the industry. The reluctance of the ministry and private sector to enforce penalties on non-compliant industrialists raises questions about their commitment to the agreement.

The dairy industry cites increased stockpiles of dairy products since April 2023 as the cause of payment issues. The National Dairy Development Board reports stockpiling of 1,400 metric tons of butter and 4,800 metric tons of milk powder, valued at Rs 5 billion, from April 2023 to March 2024, with the balance still increasing.