Dairy Sector in Nepal

Brief Overview
• Dairy sub-sector shares more than 60 % of livestock sector
contribution to GDP.
• Annual production of milk is 1.35 million metric ton. Buffaloes
contribute more than 2/3 of the volume.
• 13 % of total cattle population (0.9 million) & 26 % buffaloes
(1.19 million) are milking.
• Crossbreeding with Jersey and Holstein Friesian cattle &
Murrah buffaloes for breed improvement.
• Predominantly smallholder production system. About 150
thousand farm families affiliated to 1500 primary Coops.
 Brief overview...
• Dairy Development started in early fifties with FAO support.
• Production system crop-livestock-forest integrated in hills.
• In high mountains, yak and chauries are reared in
transhumance system.
• Seasonal fluctuation in milk production-collection (flush
season; August-September to January-February)
▫ Ratio of lean to flush season production is about 1:3 in most
of the country and 1:1.5 in areas where the feed supply is
better.
▫ Seasonal breeding pattern of buffaloes and availability of
green forages are main reasons.
 Status and structure of current dairy strategy
• Public-private partnership strategy promoted by the DLS in
ADB supported projects has been useful for;
▫ expansion of milk collection networks; chilling facilities
▫ raising awareness in hygienic milk production and improving
keeping quality of milk
▫ products diversification and
▫ strengthening management capabilities of dairy coops and
private dairies (small and medium scale).
• Attracting private sector investments in dairy processing and
marketing has resulted in increased demand for milk
• Provisions of the Agri-business Promotion Policy on
promotion of dairy industry are not fully operational.
 Status and structure...

• Human resources development strategy in dairy sector did

not receive due priority; lack of qualified professionals in the
public as well as in the private sector.
• Forage based milk production system has not been
expanded widely; limited in some production pockets.
• Adoption of code of practices in dairy industries and its
monitoring/ regulation is weak; there are wide variations in
the quality of dairy products in the market.
 Policies affecting dairy sector
• Dairy Development Policy 2008 is the main policy document
of the government;
▫ Guided by the provisions and the spirit of the Agriculture
Perspective Plan (1995-2015), National Agriculture Policy
2004, National Milk marketing and Strategy Study 2001, Agri-
business Promotion Policy 2006.
• The Three Year Interim Plan (2007-2009) has targeted
higher growth rate in milk production (4.6 percent per
annum).
• Policies of the government on meeting food security arising
from the global food grain crisis and the priorities accorded
for them affects public sector investment in dairy sector.
 Major constraints
• Scientific milk pricing policy is lacking.
• Poor milk quality a persistent problem in the dairy industry.
This is associated with a lack of farmer awareness in clean
milk production. Unhygienic milk production starts with the
farmer and causes loss of income along the milk chain.
• Predominance of small holder producers; high cost in
production as well as in collection.
• Lack of human resources and technology support in private
sector.
• Access to animal health and breeding services is limited.
• Poor animal feed resources base.
 Challenges
• Breed improvement in small holders farming system
• Lack of elite herds of cattle and buffaloes in the country
both in Government and Private sector
• Sustaining the productivity of improved animals
• Control and eradication of economically important
diseases
• Lack of business plan/ entrepreneur skills
• Quality management in value chain
 Policy Vision

To contribute to national economic development by

commercially, qualitatively and competitively
developing the dairy sector for employment
generation and poverty reduction with the
participation of government, cooperatives and
private sector

Dairy Development Policy 2008

 Long term vision for the sector

• Substitute the import of milk and milk products in the country

• Encourage private sector investment in dairy sector.
• Emphasis on quality improvement (code of hygienic practices,
GMP, HACCP in dairy industries).
• Enhance competitiveness of Nepalese dairy industry.
• Comprehensive study to guide appropriate dairy development
strategies and program (perspective plan).
• NDDB role on policy formulation and implementation/ trade
regulation needs strengthening.
Thank you very much
for
your kind attention