Chapter XX Dairy processing and farming in Nepal

According to the Agricultural Perspective Plan growth of the dairy sector will accelerate from 2.9 percent to 5.5 percent by the end of the Plan period. Nepal is a net importer of milk and milk products. In the past decade the private sector increased its presence in a dairy industry which was dominated by the state owned DDC.Farmers are still facing “milk holidays ” and milk and milk product imports are not decreasing. To sustain and further improve the dairy processing industry in Nepal, it must become competitive in terms of cost of production and quality. Trained manpower should be available to the private sector, raw milk pricing should be based on the quality and fixed by a free market system with little intervention from the government. Extension services should be backed up with more research and animal health support to increase the productivity of the dairy animals and product quality. Government policy should encourage the private sector to diversify products in collaboration with or in joint venture with the external partners from developed counties to explore the export market using their brand names and diversified quality products. Livestock accounts for nearly a third (29.8%) of the country’s agricultural domestic products (AGDP) (ICIMOD/MENRIS / CBS, 2003). According to the the Agriculture Perspective Plan (APP) growth in the sector will rise from 2.9 percent to 5.5 percent by the end of the Plan period. Dairying accounts for about two thirds of the livestock sector. The average growth of milk production over the last decade was about 2.6 percent per yea