January 21: The government is preparing to adjust the price of milk and dairy products.

The Ministry of Agriculture and Livestock Development is planning to adjust the price of milk upon the recommendation of a committee formed to carry out a study regarding the price adjustment of dairy products. The ministry had formed the committee after the Central Dairy Cooperative Association Limited Nepal requested for increasing the price of milk arguing that they were not getting even the cost of investment by selling milk at its current price.    

The report states that the farmers are compelled to sell milk bearing loss because the price of milk has remained stable for two and half years whereas the price of animal feed and fodder has sky-rocketed during the same period.    

Although the price of milk used to be adjusted every year in the past, it has not happened for the past two and half years. Farmers have been selling milk at Rs 53 per litre currently. The report states that the farmers bear loss of Rs 4 per litre when they sell milk at the current rate. It is stated in the report that the price of milk needs to be adjusted with time as the price of veterinary medicine, the salary and allowances of the person tending the cattle, transportation cost and the prices of other goods and equipment have shot up.    

The report recommends increasing the price of milk by Rs 10 per litre. The consumers have to pay Rs 76 per litre at present. If the price is adjusted as per the committee's recommendation, the farmers will get Rs 60 per litre while the consumers will have to buy a litre of milk for Rs 86.

Out of the increased rate of Rs 10 per litre, the farmers will get Rs 7 while the dairy entrepreneur will get Rs 3. The farmers will make a profit of Rs 3 per litre after deducting the investment price after the implementation of the new price based on the report.    

The committee prepared the report after consulting with the dairy farmers and dairy entrepreneurs in Ilam, Jhapa, Sunsari, Morang, Saptari, Sarlahi, Bara, Makawanpur, Kavre, Chitwan, Nawalparasi, Rupandehi, Kaski, Banke, Surkhet, Kailali and Kanchanpur districts.    

The dairy industry contributes 5 percent to the GDP of the country. The annual milk production in the country has reached 2.3 million tonnes. Forty percent of this production is cow milk and 60 percent is buffalo milk. -- RSS