Milk Price Up by Rs 2.80 Per Liter No Further Change in Market Price

A meeting of dairy stakeholders held at the Ministry of Agriculture and Cooperatives (MoAC) on Monday decided to increase the price of fresh milk by Rs 2.80, responding to mounting pressure from agitating farmers. Following the decision, the farmers announced the withdrawal of their protest programs from Tuesday.

However, the hike in the price of fresh milk will not affect market price of fresh milk.

The meeting attended by representatives of farmers, MoAC officials, state-owned Dairy Development Corporation (DDC) and dairy regulator Dairy Development Board (DDB) took the decision to this effect. Farmers had been demanding price rise by Rs 4 per liter, in which they would get Rs 2.76 per liter.

Talking to myrepublica.com after the meeting, Ajab Lal Yadav, chairman and general manager of the DDC, said the state-owned dairy producer would have to suffer a loss of 80 paisa per liter of milk. "Though we will make loss by implementing the decision, we are committed to implementing it," Yadav said.

Dhaka Ram Aryal, chairman of Central Dairy Co-operatives, informed that farmers have withdrawn their protest programs after their demands were addressed. However, private dairy firms said the decision would severely affect the private players in the dairy industry as they would not be able to sustain themselves by purchasing fresh milk at the revised price. "We have to bear additional cost of Rs 4.30 per liter and we can collect only Rs 2 per liter. We will suffer a loss of at least Rs 2.30 per liter," said Ram Kumar Khadka, president of Private Dairy Association.

The meeting also formed a committee, comprising dairy farmers and the representatives of the DDC and the DDB, to asses the problems of dairy farmers and make appropriate recommendation to the government on the price of milk.

Dairy farmers across the country had been halting supplies and blocking highways to press the authorities concerned to address their 11-point demands, including the rise in the milk price of Rs 4 per liter, for the last few days. The farmers´ protest prompted the dairy firms to increase the quantity of powdered milk amid dipping supplies of fresh milk.

A high-level committee, constituted by the MoAC, had recently recommended the government to increase the milk price by Rs 4 per liter, after concluding that the cost of milk production had increased by 33.83 percent over two years. Acting on the recommendation, the MoAC had directed the DDC and DDB to implement the recommendation. The DDC and private dairies had increased the price of milk by Rs 2 per liter on August 21 with Rs 1.26 per liter going to farmers´ pocket.