KATHMANDU: The Dairy Development Corporation (DDC), under the leadership of Agriculture, Forest and Environment Minister Gita Chaudhary, has significantly reduced its outstanding payments to dairy farmers through aggressive marketing, inventory liquidation and internal cost-cutting measures.
The corporation said it has reduced the farmer payment backlog from around Rs 720 million to approximately Rs 350 million over the past three months. The payment gap, which had previously stretched to as long as seven months, has now been brought down to two to three months. The DDC said it is working to reduce the payment gap further to just one month.
The improvement has been achieved by increasing sales and utilizing the corporation’s existing inventory. The DDC sold around 600 metric tons of milk powder and 450 metric tons of butter that had been held in stock, generating additional revenue and improving its cash flow.
The corporation has also increased its daily sales revenue from around Rs 60 million to Rs 90 million. It said the entire additional revenue generated from the increased sales has been directed toward payments to dairy farmers.
Alongside increased sales, the DDC has reduced non-essential expenditures and prioritized farmer payments. It has also strengthened efforts to recover outstanding receivables, helping improve cash flow.
In coordination with the private sector, the corporation has opened eight dedicated sales counters in Kathmandu Valley to expand its market reach and boost sales. It has also reduced subsidized milk and ghee benefits previously provided to employees, resulting in annual savings of around Rs 30 million.
The DDC said the reduction in the farmer payment backlog has been achieved without receiving any concessional loans or subsidies from the Nepal government. According to the corporation, internal reforms, aggressive marketing, inventory management and tighter expenditure controls have enabled it to improve its financial position and facilitate payments to farmers.
The corporation said it is continuing its efforts to bring the farmer payment gap down to one month, with the objective of ensuring more timely and sustainable payments to dairy farmers.
