Producers question the gap between farm-gate and retail milk prices and call for transparent cost calculations and representation in price-setting decisions.
GHORAHI, NEPAL: Dairy farmers in Ghorahi are raising concerns over low returns for raw milk amid rising costs of feed, fodder, veterinary medicines and labour, while consumers continue to pay higher prices for milk and dairy products.
Farmers are calling for greater transparency in the dairy supply chain, including a clearer breakdown of production costs, processing expenses and profit margins between producers and retailers.
Farmers highlight gap between procurement and retail prices
Gopal Khanal, who operates Green Laxmi Cow and Buffalo Farm in Rampur, said dairies pay a maximum of NPR 75 per litre for buffalo milk and NPR 65 per litre for cow milk.
According to Khanal, the same businesses sell milk to consumers for as much as NPR 100 per litre.
He also expressed concern that farmers have limited involvement in decisions on milk pricing, despite bearing the costs and risks associated with dairy production.
The difference between farm-gate and retail prices does not, by itself, establish the profit earned by dairies, as processing, chilling, transportation, packaging, distribution and retail expenses may also contribute to the final price. Farmers, however, are seeking greater visibility into how these costs are calculated and how value is distributed along the supply chain.
Rising input costs put pressure on farm incomes
Farmers say expenditure on animal feed, fodder, medicines and labour has increased, while the prices they receive for raw milk have not risen sufficiently to keep pace.
Such a mismatch can reduce dairy-farm margins, particularly for small-scale producers who have limited bargaining power and depend on regular milk sales for household income.
The farmers are therefore seeking a scientific assessment of milk production costs, taking into account animal maintenance, feed consumption, veterinary care, labour and other operating expenses.
Local prices for dairy products
According to the supplied report, the local business committee in Ghorahi set the following prices for selected dairy products effective October 15:
| Dairy product | Reported price |
|---|---|
| Curd | NPR 140 per litre |
| Paneer | NPR 900 per kg |
| Ghee | NPR 1,450 per kg |
Farmers have questioned the contrast between the returns received for raw milk and the prices charged for processed dairy products. However, the final retail prices also reflect processing yields, product composition, packaging and distribution costs.
Also Read: GADVASU to Launch Mobile Laboratory for Free Milk and Animal Feed Testing Across Punjab
Producers seek a role in price-setting
Dairy farmers are calling for a transparent pricing mechanism based on scientifically calculated production costs and meaningful producer representation in pricing decisions.
Potential measures include regular reviews of feed and veterinary expenses, transparent procurement-price calculations, disclosure of key supply-chain costs and consultation with farmer representatives before major price revisions.
A more transparent system could help farmers understand how procurement prices are determined while enabling policymakers and industry stakeholders to assess whether the returns available to producers are sufficient to sustain milk production.
The concerns raised in Ghorahi underline a broader challenge for the dairy sector: balancing affordable consumer prices with fair and sustainable returns for farmers. Any reform would need to consider the interests of producers, processors, retailers and consumers across the supply chain.
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