Nepal makes farming viable again

As soon as she milks her cow, 52-year-old Punam B K is off, pedaling her bicycle furiously along the highway with a blue milk can in the front basket. 

By the time she arrives at the Jaya Shiva Ganesh Dairy Producers Cooperative in Gopalganj village, others are already there, their bicycles parked on the roadside. The farmers are all holding on to their blue milk cans, and are chatting away. 

“We keep what is needed for the family, and sell whatever remains here at the cooperative,” says B K, as the volume, fat and non-fat solid content of her milk is measured. It is then poured into a bigger vat to be mixed with milk from other farmers. B K collects her receipt with the value of her milk, and prepares to head home. The farmers are reimbursed on a quarterly basis. 

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“Everyone around here has at least a cow or buffalo to provide milk for the family, the cowdung is used for fertiliser, and we can bring whatever is left over to the cooperative,” says B K who, like the others, brings her milk by bicycle twice a day, once in the morning and again in the evening.

All this may seem like nothing special, just an ordinary farmer selling her milk. But it has to be seen in the context of dairy farmers overcoming subsistence and increasing household income. Nearly 200,000 dairy farmers from over 1,200 cooperatives have not been paid by the government-run DDC for their milk for a year or more. 

The DDC has fixed a quota for buying milk from cooperatives that limits production even during the peak winter months. Farmers in Chitwan are so fed up, they have staged demonstrations in Kathmandu and even poured milk on the East-West Highway in protest. 

Punam B K’s milk ends up in Bhawani Dairy, a milk processing plant in Chitwan that buys milk from various cooperatives in the district. It was established six years ago by three entrepreneur cousins Devrath Baral, Drishya Baral and Subash Paudel and is now being supported by the Commercial Agriculture for Smallholders and Agribusiness (CASA) project.

This UK-funded project implemented by Swisscontact in Nepal has been supporting agro-businesses in 23 countries in Asia and Africa. They focus on improving the capacity of private dairy and vegetable farmers to find markets and build a sustainable supply chain for their produce. It helps dairies like the one in Chitwan with branding and marketing, as well to track business through a Dairy Management System (DMS) digital database. 

Bhawani Dairy also got support to conduct orientation for cooperative farmers to learn about new ways to boost productivity with breeding, cowshed management and hygiene maintenance. Many commercial farmers in Chitwan, some with up to 60 cows and buffaloes, have benefited. 

B K says she only has six cows, so not everything she hears at the orientation about increasing cowshed area is applicable. “We are just happy our milk is not wasted, and we can earn some cash from the surplus,” she says. 

Bhawani Dairy’s clientele is based entirely in Chitwan and in towns along the East-West Highway. But building on its success here, the company is looking to expand nationwide and target the Kathmandu market. Being a perishable product, the diary business is challenging. Businesses also need investment and technical support to diversify into value-added milk products like cheese, yoghurt, ice cream or powdered milk. 

“For now, the best thing we as a dairy business can do for farmers is to buy their milk at a decent price and pay them in time,” says Drishya Baral of Bhawani Dairy. 

Another agro-industry supported by CASA since 2018 is Himalayan Supervores, a venture that sources farm produce to supply vegetables and other foods to restaurants and hotels in the city, and even export Halal-certified produce to Gulf countries. 

CASA helped with cold chain management system to keep vegetable produce fresh so that the products earn trust about quality in the national and international market. Himalayan Supervores is already exporting to UAE and Qatar, and is targeting other Gulf countries next.

“The guidance provided by the international expert was invaluable, we could not have bought that knowledge even with money,” says Nelson Shrestha of Himalayan Supervores. “It was not about fancy hardware, but how to minimise wastage, increase productivity, save time and money.” 

Though Himalayan Supervores collects vegetables from vegetable cooperatives, it indirectly works with a network of thousands of cooperative farmers. Its catchment area therefore is enormous, and it has enhanced their knowledge about organic farming methods, bio-pesticides, and the right way to handle and package vegetables.

CASA’s most recent tie-up is with Pokhara-based Poshilo Foods, which specialises in increasing the shelf-life of local nutritional food items. During the Covid lockdown Prithwi Kallyan Parajuli saw an opportunity to supply nutritional foods that stayed longer, and set up Poshilo. 

It took traditional satu flour made from dry-roasted pulse, added more nutrients, and packaged it. Four flavours of satu with nutrient values differentiated for various age groups now line the shelves of supermarket chains like KK Mart, Saleways. Poshilo is now exploring the export market in India. 

In the five years of helping Nepali agribusinesses, CASA has already teamed up with 35 established companies. Parajuli heaps fulsome praise on the catalytic support and guidance he got early on, not just for product design, but to explore market viability, branding and marketing. 

He has participated in government-led programs before, but says those are one-off and focus only on technical solutions and do not pay much attention to the important back-end work with management and sales. 

Says Devrath Baral of Bhawani Dairy in Chitwan: “We would probably have eventually got to where we are now, but it would have taken years longer without CASA. And now we can share our experience with other agribusinesses in Nepal.”