Dairies reduce milk purchase from farmers, turn to powdered milk
KATHMANDU, Aug 25:
Nepal, which was facing milk deficit of 300,000 liters a day until last year, is in a milk surplus situation this year.
According to National Dairy Development Board (NDDB), the country is seeing surplus of 40,000 liters of milk every day. The reason behind such a dramatic improvement, however, is not the rise in milk production. Most of the dairy producers are using cheaper powdered milk to increase their milk production instead of buying fresh milk from farmers. They have also increased milk holidays as use of powdered milk is cheaper than buying fresh milk.
Uday Chandra Thakur, joint secretary of the Ministry of Agricultural Development (MoAD), said one of the reasons behind growing frequency of milk holiday is the use of powdered milk by dairy producers.
Price of powdered milk has fallen significantly in the international market following European Union's economic sanction on Russia. A 25-kg bag of powdered milk, which used to cost Rs 15,000 last year, is now available at around Rs 9,000, according to Sumit Kedia, president of Nepal Dairy Association (NDA).
Dairy producers can produce up to 12 liters of pasteurized milk by using a kilogram of milk powder. Cost of production of milk produced using milk powder is only around Rs 30 per liter, while procurement cost of fresh milk stands at around Rs 47 including transportation cost. A five-month period from mid-April to mid-September is considered lean season for production of fresh milk.
Kedia, however, denied allegations that dairy producers were using milk powder to reduce purchase of fresh milk from farmers" "The ongoing milk holiday is the result of imbalance in demand and supply situation in the aftermath of the earthquake, which is of temporary nature. It won't last longe"," claimed Kedia.
Farmers fear milk surplus will increase further from mid-September when flush season for milk production begins.
Kedia says the government should introduce programs to increase milk consumption and make it mandatory for Nepal Army, Armed Police Force and Nepal Police to purchase fresh milk instead of condensed milk.
Meanwhile, Chitawon Milk Private Limited - one of the powdered milk producers in the country - has shut operation for the time being. It is also one of the reasons behind increasing surplus of fresh milk in the country. The Chitwan-based dairy producer used to purchase around 40,000 liters of fresh milk from farmers on a daily basis.
Nepal imported dairy products worth Rs 2.05 billion in the first 11 months of 2014/15, compared to Rs 1.94 billion of dairy imports in 2013/14. Alarmed by import figures, the Department of Customs (DoC) is likely to enforce quantitative restriction on import of milk powdered milk, according to officials.
The government, which introduced series of programs to introduce milk production, now has a challenge to increase milk consumption, according to MoAD officials" "Milk production has increased after the introduction of different programs like artificial insemination as well as forage production program"," he said, adding" "We now have the challenge to increase milk consumptio"."
MoAD is mulling over two options to deal with milk surplus situation. One is enforcing restriction on import of powdered milk and the other is to diversify dairy products" "We are thinking of encouraging dairy producers to start producing baby feed so that milk produced in the country is not waste"," said Thakur.
Khim Bahadur Thapa, chairman of Dairy Development Corporation (DDC) said they have started correspondence with Patna Dairy of Bihar, India to sell their surplus milk" "We have also expedited the plan to establish a plant in Biratnagar to produce milk whitene"," he said.
Sources at MoAD say the ministry has asked its subordinate agencies, including NDDB, to devise plans to increase consumption of fresh milk instead of other soft drinks. Officials are mulling over increasing government workers to consumer milk at their workplace instead of tea.
Nepal's per capita milk consumption stands at around 52 liters which is far below the global average of around 100 liters. Milk consumption should be at least 90 liters annually to meet for basic nutrition need, according to MoAD officials.
Source: Republica
