FINAL REPORT

RFP No: NDDB/C/RFP/2074/75/04

Impact of Dairy Sector

Subsidy and Support
in Nepal

Submitted to:

National Dairy Development Board

(NDDB)
Hariharbhawan, Lalitpur, Nepal
SUBMITTED BY:

Nepal Environment Protection

Center (NEPC)
P.O.Box 2444, Mid Baneshwor, Kathmandu
Tel: +977-01-4465942, Fax: +977-01-4465942
Email: nepckathmandu@gmail.com, info@nepcnepal.org
Website:www.nepcnepal.org

Date: 7thi January 2018

 TABLE OF CONTENTS

Contents Page
Table of Contents .................................................................................................................................... ii
List of Tables .......................................................................................................................................... v
List of Figures ...................................................................................................................................... vii
abbreviation ........................................................................................................................................ viii
Sample Districts under Impact of Dairy Sector Subsidy and Support in Nepal ................................ x
Executive Summary ................................................................................................................................ xi
chapter: 1 Background .......................................................................................................................... 1
1.1 Introduction ................................................................................................................................. 1
1.2 Objectives of the Study ............................................................................................................... 1
1.3 Scope of the Study ....................................................................................................................... 2
CHAPTER 2. METHODOLOGY .................................................................................................................. 2
2.1 Desk study.................................................................................................................................... 2
2.2 Consultation with concern authorities ...................................................................................... 3
2.3 Identification of the subsidy/support providers and receivers .............................................. 3
2.6 Sampling and sample selection .................................................................................................. 5
2.7 Data collection tools preparation............................................................................................... 6
2.8 Training of the survey team ....................................................................................................... 6
2.9. Data collection from the field .................................................................................................... 7
2.9.1 Sample selection ................................................................................................................... 7
2.9.2 Field study ............................................................................................................................ 8
2.10 Data Management and analysis ............................................................................................. 11
2.11 Progress update ...................................................................................................................... 11
2.12 Report preparation ................................................................................................................. 11
2.13 Data quality assurance............................................................................................................ 12
2.13.1 General measures............................................................................................................. 12
2.13.2 Instruction to the survey team ............................................................................................ 13
CHAPTER 3. FINDINGS ON LITERATURE REVIEW .................................................................................. 13
3.1 Policies Related to Dairy Sector Support and Subsidy ........................................................... 13
3.1.1 National Agriculture Policy (NAP), 2004 ......................................................................... 13
3.1.2 Dairy Development Policy, 2007 (2064 BS)..................................................................... 14
3.1.3. Approach Paper to 13th Plan and Agriculture/Livestock Development Policies ........ 15
3.1.4. Gaps between Policy and Implementation ...................................................................... 16

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 3.1.5 Gaps in Planning Process ................................................................................................... 16
3.1.6 Livestock Policy and Vulnerability ................................................................................... 17
3.2 Guidelines Related to Dairy Sector Support and Subsidy ...................................................... 18
CHAPTER 4 RELEVANCY OF THE SUBSIDY AND SUPPORT ........................................................ 37
4.1 General ....................................................................................................................................... 37
4.2 Coverage of the Subsidy/support ............................................................................................ 37
4.3 Number of respondents by sex ................................................................................................ 38
4.4 Type of support taken by the respondents ............................................................................. 38
4.5 Subsidy/support providing agencies and type ....................................................................... 39
4.6 Type of subsidy/support received by the recipients ............................................................. 40
4.7 Purpose of the support and subsidy ........................................................................................ 40
4.8 Usefulness of the support and subsidy .................................................................................... 41
4.9 Relevancy of the support and subsidy ..................................................................................... 41
4.10 Presence of guideline for providing support and subsidy ................................................... 42
4.11 Clarity on the guideline for providing support and subsidy ................................................ 42
CHAPTER 5 EFFICIENCY OF DAIRY SECTOR SUPPORT AND SUBSIDY .................................................... 43
5.1 Amount received by purpose and type of recipients ............................................................. 43
5.2 Operational status of program/project under subsidy/support........................................... 44
5.3 Status of following terms and condition of program/project under subsidy/support ....... 45
5.4 Clear accounting system in the recipient ................................................................................ 45
5.5 Recipients following the current government accounting system ........................................ 46
5.6 Status of completing the project by contracted amount ........................................................ 46
5.7 Status of completing the project in planned time frame ........................................................ 46
5.8 Documentation of the reports and reasons for not completing the project in time ............ 47
5.9 Amendments done in the original planned activities ............................................................. 47
5.10 Modality of subsidy/support project implementation ........................................................ 48
5.11 Easiness of getting instalments to the recipients ................................................................. 48
5.12 Rating of the complications faced by the recipients to get instalment ............................... 49
5.13 Recipient friendliness of the subsidy/support ..................................................................... 50
5.14 Involvement of the recipients in program monitoring and evaluation .............................. 50
5.15 Direct and indirect employments generated by the subsidy/support ............................... 50
5.16 Efficiency of subsidy/support program as mentioned by recipients ................................. 51
6.1 Improvements in dairy sector by the subsidy/support ......................................................... 52
6.2 Changes in dairy sector by the subsidy/support .................................................................... 53
6.3 Changes in life style of the people due to subsidy/support ................................................... 54

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 6.4 Aspects changes in life style of the people due to subsidy/support ..................................... 55
6.5 Opportunities created due to subsidy/support ...................................................................... 55
6.6 Effectiveness of the subsidy/support program ...................................................................... 57
6.7 Few case studies ........................................................................................................................ 57
CHAPTER-7 SUSTAINABILITY OF DAIRY SECTOR SUPPORT AND SUBSIDY ............................................ 69
7.1 Increment in the income of people due to subsidy/support program ................................. 69
7.2 Efforts done by the recipients to increase the income ........................................................... 69
7.3 Ability of the recipients to undertake the current project without external support ......... 70
7.4 Adequacy of financial resource, knowledge and skill in the recipients to continue current
activity .............................................................................................................................................. 71
7.5 Presence of other subsidy/support provider in the area ...................................................... 71
7.6 Modality of providing subsidy/support by other agencies.................................................... 71
7.7 Sustainability of the current activity/project ......................................................................... 72
7.8 Overall evaluation of the recipients on subsidy and support program ................................ 72
7.9 Strength of the subsidy and support ....................................................................................... 73
7.8 Weakness of the subsidy and support ..................................................................................... 74
chapter 8. Conclusion and Recommendations .................................................................................. 74
8.1 Conclusion.................................................................................................................................. 74
8.2 Recommendations..................................................................................................................... 75
Annexes ................................................................................................................................................. 78
Survey tools ........................................................................................................................................... 78
Annex: 2 List of Key Informants Interviewed ........................................................................................ 96
Annex: 3 List of Focus Group Discussion (FGD) Participants ................................................................ 98
Annex: 4 KEY Informants' Survey information .................................................................................... 103

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LIST OF TABLES Page

Table: 2.1 Subsidy/Support providing agencies in dairy sector in Nepal………………………………………….03

Table: 2.2 Total universes1 based on literature review…………………………………………………………………….04

Table 2.3: Geographical distribution of sample districts…………………………………………………………………..05

Table 2.4: Field survey team composition………………………………………………………………………………………..07

Table: 2.5 Proposed sample…………………………………………………………………………………………………………….08

Table 2.6: Field survey methodology……………………………………………………………………………………………….09

Table: 2.7 Report analysis frames……………………………………………………………………………………………………12

Table: 4.1 Quantitative Survey sample coverag………………………………………………………………………………39

Table: 4.2 Qualitative survey sample coverage……………………………………………………………………………….39

Table: 4.3 Respondents by Sex…………………………………………………………………………………………………………40

Table: 4.4 Type of support taken by the respondents………………………………………………………………………40

Table: 4.5 Support and subsidy providing agencies and type……………………………………………………………40

Table: 4.6 Type of subsidy and support received by the recipient……………………………………………………41

Table: 4.7 Purpose of the support and subsidy………………………………………………………………………………..42

Table: 4.8 Whether the subsidy/support was useful to the recipient or not……………………………………42

Table: 4.9 Relevancy of the support/ subsidy………………………………………………………………………………….43

Table: 4.10 Guideline in place on providing subsidu/support…………………………………………………………………………..43

Table: 4.11 Clarity on the different aspects of the guideline to the recipient…………………………………..44

Table: 5.1 Total amount, purpose and type of the grant/subsidy/support received…………………………45

Table: 5.2 Operational status of program/project under subsidy/support……………………………………….46

Table: 5.3 Whether or not the Terms and Conditions mentioned in the contract followed……………..46

Table: 5.4 Whether or not the recipient has clear accounting system at hand………………………………..47

Table: 5.5 Whether or not the recipient followed current government accounting system…………….47

Table: 5.6 Whether or not the program/project completed by the contracted amount…………………48

Table: 5.7 Activities mentioned in the contract completed in stipulated time………………………………..48

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Table: 5.8 Clear and updated write-up on reasons for not timely completing the program……………..49

Table: 5.9 Amendments in the activities mentioned in the original contract…………………………………..49

Table: 5.10 Modality utilized to implement program……………………………………………………………………….49

Table: 5.11 Whether or not the recipient received the instalments easily……………………………………….50

Table: 5.12 Rating of the complications faced by the recipients to receive instalments…………………..50

Table: 5.13 Opinion of the recipients on the friendliness of the grant/subsidy/support program…….51

Table: 5.14 Whether or not the recipient involved in monitoring and evaluation of the program……51

Table: 5.15 Direct and indirect employments created out of the program……………………………………….52

Table: 5.16 Ranking of the efficiency of the subsidy/support program by the recipient…………………..53

Table: 6.1 Observed improvement by recipient in dairy sector due to grant/subsidy/support…………54

Table: 6.2 Changes in dairy sector due to this subsidy/ support as perceived by recipient……………….55

Table: 6.3 Changes occurred in the lifestyle of the grant/subsidy/support receivers……………………….56

Table: 6.4 Aspects of lifestyle changes among the recipients due to subsidy/support…………………….56

Table: 6.5 Opportunities created due to this subsidy/support as mentioned by the recipient…………57

Table: 6.6 Effectiveness of this grant/subsidy/support program as perceived by recipients……………58

Table: 7.1 Whether or not the recipient's income increased year by year……………………………………….72

Table: 7.2 Efforts done by the recipient to increase income…………………………………………………………..72

Table: 7.3 Recipient's opinion on operation of project without external support in the future……….73

Table: 7.4. Enough financial resources, knowledge, skill to operate current project with recipient….74

Table: 7.5 Presence of other subsidy/support provider in your locality/neighbouring locality…………74

Table: 7.6 Differences in the modality of proving grant/subsidy/support by another agency………….75

Table: 7.7 Recipient's Opinion on the sustainability of this grant/subsidy/support program…………..75

Table: 7.8 Overall evaluation of subsidy and support……………………………………………………………………..76

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LIST OF FIGURES Page

Fig: 1 Surveyed subsidy/ support provider's recipients and type (Percent receiver) ……………………….41

Fig: 2 Purpose of subsidy/ support (Percent receiver) ……………………………………………………………………. 42

Fig: 3 Relevancy of subsidy/ support as felt by recipients (Percent) ………………………………………………..43

Fig: 4 Clarity of the guideline prepared by subsidy/ support providers to recipients (Percent)…………44

Fig: 5 Total amount, purpose and type of subsidy/ support (Percent)………………………………………………45

Fig: 6 Operational status and following ToR under subsidy/ support program (Percent)…………………46

Fig: 7 Subsidy/support receiver's Financial Management Status (Percent)……………………………………..47

Fig: 8 Status of timely completion of activities mentioned in the contract (Percent)……………………..48

Fig: 9 Easiness of getting installment by the recipients under subsidy/support program (Percent)…50

Fig: 10 Rating of the complications faced by the recipients to receive installment (Percent)…………..51

Fig: 11 Direct and indirect employments created out of subsidy/ support program (Percent)…………52

Fig: 12 Ranking of the efficiency of subsidy/ support by receiver (Percent)…………………………………….53

Fig: 13 Improvements observed by the recipient in dairy sector due to subsidy/ support
(Percent)…………………………………………………………………………………………………………................................54

Fig: 14 Changes in dairy sector due to subsidy/ support as perceived by recipients (Percent)…………55

Fig: 15 Areas of changes among the recipients due to subsidy/ support (Percent)…………………………..56

Fig: 16 Opportunities created due to subsidy/ support as opinioned by receiver (Percent)……………..57

Fig: 17 Effectiveness of subsidy/ support as perceived by recipients (Percent)………………………………58

Fig: 18 Efforts done by the recipients to increase income for sustainability of project under subsidy/
support(Percent)…………………………………………………………………………………………………………………………….72

Fig: 19 Recipient's opinions on continuity of the project under subsidy/ support without external
support (Percent)…………………………………………………………………………………………………………………………….73

Fig: 20 Recipient's opinions on the sustainability of subsidy/ support program (Percent)………………..75

Fig: 21 Overall evaluation of the recipients on subsidy/ support program (Percent Recipients)……….76

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 ABBREVIATION

ADS Agriculture Development Strategy

AI Artificial Insemination
CDCAN Central Dairy Cooperative Association of Nepal
DANIDA Danish International Development Agency
DLSO District Livestock Development Office
DOC Department of Cooperative
DLS Department of Livestock Services
DDC District Development Committee
DADOs District Agriculture Development Office
DCC District Coordination Committee
FGD Focus Group Discussion
FI Financial Institutions
FNCCI Federation of Nepalese Chamber of Commerce Industries
FUC Forest Users Committee
GDP Gross Domestic Product
GHP Good Husbandry Practice
GMP Good Manufacturing Practice
HIMALI High Mountain Agribusiness and Livelihood Improvement Project
HVAP High Value Agriculture Project
I/NGOs International/National Non-Governmental Organizations
KII Key Informant's Interview
KUBK Kisan KO Lagi Unnat BiubIjan Karyakram
LC Letter of Credit
MOLD Ministry of Livestock Development
MPC Milk Producers Cooperative
MPCU Milk Producers Cooperative Union
MPCs/Us, Milk Producers Cooperative/Union
NAFSP Nepal Agriculture and Food Security Project
NARC Nepal Agriculture Research Council
NDDB National Dairy Development Board
NRB Nepal Rastra Bank
NARDF National Agriculture Research and Development Fund
NEPC Nepal Environment Protection Center

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NAP National Agriculture Policy
PAN Permanent Account Number
PAF Poverty Alleviation Fund
PACT Project for Agriculture Commercialization Trade
PCN Project Concept Note
RRN Rural Reconstruction Nepal
YSEF Youth Self Employment Fund
R/UMPs Rural Urban Municipality
ToR Terms of Reference
VDC Village Development Committee
VAT Value Added Tax
VC Value chain

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SAMPLE DISTRICTS UNDER IMPACT OF DAIRY SECTOR SUBSIDY AND SUPPORT IN NEPAL

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EXECUTIVE SUMMARY

Introduction

Dairy sub-sector shares around 9 percent2 of the total Gross Domestic Product (GDP) and 26.8 per cent of
the Agricultural GDP (MoLD, Annual Report 2015/2016). At household level, it contributes to maintain
food and nutritional security and generates rural employment and ensures flow of money from urban to
rural areas. In Nepal, rural households are mainly involved in dairy business and about 200,000 farmers
through around 2,000 primary milk producers’ cooperatives (MPCs) are engaged in delivering milk from
rural to urban areas.

Cattle and buffaloes are the major dairy species in the country and to some extent yak (Nak) in the high
mountain region. The dairy sector is gradually emerging as commercial/semi commercial enterprise
particularly in the peri-urban areas of the country and has a great future prospect to develop as a high
value commercial product.

To facilitate the farmers to sell their milk, the dairy industries have extensively expanded their milk
collection network from east to the far west. Support and subsidies are provided for inter alia livestock
rearing, farm improvement, feed development, milk chilling, milk quality testing, milking machine,
establishment of small scale milk processing plants etc for dairy sector development in Nepal. As a result
of this and also by being an easy traditional practice and instantly remunerative, the farmers have been
very much attracted in dairy livestock keeping.

Objectives of the Study

 To identify the types of supports and subsidies provided to the milk producers by the
government agencies as well as the development partners including both the national
and international non-government organizations;
 To find out how the supports and subsidies are used by the milk producers;
 To examine the socio-economic effects of the supports and subsidies among the milk
producers;
 To find out the actual needs of the milk producers; and
 To suggest the appropriate supports and subsidies for increasing milk production.

Scope of the Study

Analysis of the dairy support and subsidy policy and programs of the government of Nepal and the
development partners including both the national and international non-government organizations;
identification of the types of supports and subsidies provided by the government as well as the
development partners including both the national and international non-government organizations;
analysis of the use of supports and subsidies by the recipients by types; analysis of the efficiency and
effectiveness of the supports and subsidies by types in terms of the opportunities created for improving
dairy farming practices; analysis of the shortcomings of the supports and subsidies; assessment of the
economic effects in terms of change in the quantity of milk production, household income, livestock
composition and milk production performances due to supports and subsidies; analysis of the social
effects in terms of gender role, education, health and sanitation etc. due to supports and subsidies;
analysis of farmers' perceptions/attitudes towards the supports and subsidies; analysis of the
perceptions/attitudes of agencies providing the supports and subsidies and study on the impact of
support & subsidies on the competitors competing in the same sector/segment.
Methodology:

Desk study, literature review, consultative meeting with concern authorities in NDDB, identification of
support and subsidy providing agencies, sampling frame, sample design, sampling, field investigation was
done. In the field verification of the support and subsidy providing agencies, HH survey with the

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http://therisingnepal.org.np/news/14668
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subsidy/support receivers, Key Informant's Interview (KII)-80, Focus Group Discussion (FGD)-16 and
Case Studies-13 (9 Success and 4 Failure) was done. A total of 16 districts namely Ilam , Morang,
Dhanusha, Sarlahi, Kavreplanchok, Sindhupalchok and Chitwan Rasuwa, Dolakha, Kaski, Rupandehi,
Dang, Bardiya, Surkhet, Kailali and Dadeldhura were selected (as per ToR) and 84 support and subsidy
receiver farms/entrepreneur were sampled. Structured questionnaire was prepared for HH survey and
semi structured checklist for KII, FGD and Case Studies.

Two days training was organized for the field research on the sampling frame, sample selection and data
collection process. For data collection a team of 22 persons with one supervisor and 2-3 enumerators was
formed for each team Efforts was done to cover as many as possible subsidy/support providers, scale of
subsidy/support and purpose of subsidy/support.

Among others, key persons representing NDDB, MPCS, MPCU, MOAD, DLS, and FNCCI at the
centre, concern provincial staff members, DLSO, DADOs, DCCIs, I/NGOs and other stakeholders
in the district were interviewed using a separate checklist developed for this purpose.

All completed questionnaires through mobile application were stored separately in a server
confidential place at NEPC office. Questions with open-ended responses were coded manually. A
database was designed using MS-Excel. Data was checked for out-of-range values and
inconsistencies between variables and analyzed and presented both in the tabular and graphical
forms. Qualitative data collected through FGDs and KIIs with respondents was organized by key
issues and themes and the answers to questions within the themes were grouped and
summarized in data analysis frameworks. A verbatim quote that illustrated the views of the
majority of participants or contradicted the majority view will be extracted from the interviews
and was included in the study report within the relevant sections.

Draft report has been prepared based on the valid information collected from the primary and
secondary sources. The data collected from different methods and tools have been triangulated
for its validity before analysis. The report has been prepared based on quantitative and
qualitative data collected from primary and secondary sources. Besides analyzed tables, the
report also includes pictures, graphs, diagrams, narrative analysis, and other inferential
statements that sufficiently extrapolate the prevailing dairy sector. The report has been
structured as relevancy, efficiency, effectiveness, sustainability.

Findings of the study

Support and subsidy program was found implemented footing on, National Agriculture Policy (NAP),
2004, Dairy Development Policy, 2007 (2064 BS), Approach Paper to 13th Plan and Agriculture/Livestock
Development Policies, Gaps between Policy and Implementation; Gaps in Planning Process, Livestock
Policy and Vulnerability, Climate Change Vulnerability fundamentals. To execute the subsidy/support
program NDDB prepared Best Dairy Cattle, Buffalo) Farmer Physical Facility and Breed Improvement
Guideline-2072, Strengthening Milk Producers Cooperative Guideline 2070, Capacity improvement of
small and cottage dairy industries subsidy guideline-2071. Department of Cooperative developed grant
and custom exemption recommendation guideline 2068. Livestock Production Directorate developed
Pilot program on milk production and marketing-based grant 2073, Milking Parlor establishment and
implementation guideline 2073, Livestock feed allowance program for newly delivered cattle and buffalo
2073, Contract on purchase and distribution of calves borne from sexed semen guideline 2073,
Establishment and operation of resource center by breeding bull rearing guideline 2073, Construction of
silo pit guideline 2073, Buffalo heifer rearing guideline 2073, Distribution of milking machine in grant
2071, Liquid Nitrogen Plant operation, production and supply management in partnership guideline
2071, Mid Hill highway and Postal Road highway focused integrated milk production promotion program
implementation guideline. Central Cattle and Buffalo Promotion Office developed Improved
Cattle/Buffalo resource center development program execution guideline (2nd amendment) 2073.

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Directorate of Livestock and Poultry Marketing developed Milk Analyzer Distribution Guideline 2070,
PACT and HIMALI projects developed Competitive Matching Grant for micro, small and medium projects.

Support and subsidy was in terms of cash and kinds and provided either to individual or to institutional
farmers. Institutional support was provided to the registered dairy farms, industries and marketing with
cash and kind support. Among the subsidy/support receivers, 37 of them received Rs. 1 lakh or less, 16 of
them received Rs. 1-5 lakh, 5 of them received Rs. 5-10 lakh and 17 of them received Rs. 10 lakh and
more.

A) RELEVANCY

To gauge the relevancy, 10 indicators were set and conclusion was drawn based on the responses of the
recipients and statistical tool. Based on the information collected form the beneficiaries, 89.9 percent
respondents received institutional and 10.71 percent received individual subsidy/support out of which
51.19 percent was subsidy, 39.29 percent support and 4.76 percent each grant and kinds. Support and
subsidy providers were; Department of Livestock Services (DLS), National Dairy Development Board
(NDDB), PACT, HIMALI project, NAFSP, PAF, I/NGOs and others. Out of the recipients' 36.9 percent
received from NDDB, 27.38 percent received from DLS, 14.29 percent received from PACT, and 9.52
percent received from HIMALI. Other subsidy/support providers were NAFSP, PAF, I/NGOs (Oxfam,
UNNATI, RRN,) and others.

Purpose of the subsidy/support was for dairy animal farming (38.1 percent), dairy equipment (33.33
percent), dairy machinery (11.9 percent), and dairy animal shed improvement (9.52 percent). Out of
dairy animal farming, 29.76 percent was institutional and 8.33 percent was individual, while dairy
equipment and machinery was provided only to institutional recipients. All of the recipients mentioned
that the subsidy/support was useful, 70.24 percent opined that it was very relevant and 29.76 percent
said it was relevant. As mentioned by 97.62 percent recipients there was guideline, and program
planning/proposal writing guideline heading was clear and enough to 77.33 percent institutional and
88.89 percent individual subsidy/support recipients. Similarly, program implementation heading under
the guideline was clear to 76.0 percent institutional and 88.89 percent individual recipient while program
implementation guideline was enough to 73.33 percent institutional and 88.89 percent individual
recipient. However, it was revealed that guideline and proposal format rolled out by HIMALI and PACT
was said difficult to understand.

B) EFFICIENCY

To gauge the efficiency, 25 indicators were set and conclusion was drawn based on the responses of the
recipients and statistical tool. A total of NRs. 56,030,558 cash were received by the institutional and NRs.
6,475,920 cash were received by the individual recipients. Only 19.05 percent project/program were
operational while 80.95 percent were not. Out of 80.95 percent non-operational, 71.43 percent were
institutional and 9.52 percent were individual and most of the non-operational were big subsidy/support
receivers. As said by the receivers' 98.81 percent followed and 1.19 percent not follow the terms and
condition mentioned in the contract.

As reported, 58.33 percent recipient maintained clear accounting system and 41.67 percent had no such
system andout of those who said they have clear accounting system, 85.71 percent affirmatively
answered that they have followed government system. It was found that 78.57 percent recipient were
able to complete the project/program by the contracted amount while 21.43 percent could not do so and
deficit amount was borne by the institutional fund and taking loan. Similarly, 86.9 percent recipients
completed all the activities mentioned in the contract within stipulated time and only 13.10 percent could
not complete in time. Only 51.19 percent recipients had clear and updated write-ups for not completing
the planned activities in time while 48.81 percent had no such records. The reason for non-recording was
due to negligence, innocence and poor recording system.

No any amendments were made in the original plan and proposal of 79.76 percent recipients and
amendments were done in 20.24 percent recipient's plan. The amendments were due to changes in
technology, non-availability of the inputs and services, budgetary constraints (price increased) and poor
planning and budgeting and non-involvement of owner during project proposal writing and decreased
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budget while negotiation. Survey confirmed that 88.0 percent recipients implemented the project
activities of their own, 5.33 percent distributed to the members to implemented the mentioned activities
and 6.67 percent provided credit to the members for planned activity. Instalments were received easily
by 79.76 percent while 20.24 percent said it was not easy to get. The recipients complained that there is
unnecessary hassle while getting the instalment particularly need of VAT bill, tax deduction in every
payment even with the wage labor, compulsion to submit the bill even when the bill was not available viz.
training in rural area where the shop keepers do not have bill, which encouraged submission of fake bill.

While consulting with the support providers, the receiver did not report properly and did not submit the
required documents viz. progress as planned, noncompliance with activity and expenditure, VAT bill of
inputs purchase. The subsidy/support was very recipient friendly for 61.9 percent while it was little
friendly to 38.1 percent recipients and 94.05 percent recipients were involved in monitoring and
evaluation of the projects and only 5.95 percent were not involved. 0-2 direct employment was generated
by 35.71 percent, while 3-5 direct employment was generated by 25 percent, more than 11 employments
generated by 21.43 percent and 6-10 employments generated by 17.86 percent recipients. The program
was efficient for 50 percent recipient, very efficient to 38.1 percent, and not efficient to 11.9 percent
recipients.

C) EFFECTIVENESS

To gauge the effectiveness, 6 indicators were set and conclusion was drawn based on the responses of the
recipients and statistical tool. Different improvements were observed in the dairy sector due to the
subsidy and support. Improved milk marketing was felt by 38.1 percent recipients while 32.14 percent
feel milk quality have been improved, 27.38 percent recipients felt better dairy animal management and
2.38 percent internalize other improvements in sheds for keeping dairy animal. Change observed by
54.76 percent recipients was increase in livestock number, while increase quantity of milk production
was for 14.29 percent, increase d productivity of animals and improve in composition of dairy animals to
10.71 percent recipients each. Other social changes were: increased sanitation (personal, domestic and
environmental), increased access to health care and treatment, increased awareness, income generation
among the women and economic self-reliance, utilization of modern materials and equipment, increased
social status of women, formation of women cooperatives and develop women entrepreneurship,
increased household income and increased access to quality child education. A change in the life style was
observed by 83.33 percent recipients and 77.14 percent agreed that family income have been increased,
14.29 percent agreed on increased property and 8.57 percent said improvement in the education.

Different opportunities were created by the support and subsidy in dairy sector in the survey districts as
cited by 39.29 percent recipients' expansion of market of milk and milk products, 32.14 percent observed
increased number of dairy animals, 17.86 percent observed dairy product diversification and 7.14
percent observed diversification in the gender role. Other opportunities were: increased technical and
managerial capacity of dairy farmer, increased financial, institutional and marketing capacity of the dairy
farmers' institutions, increased income, and no need for foreign employment. Other opportunities
included commercial orientation towards milk production at rural areas, women empowerment and
diversification of women role, comfortable livelihood due to employment at local level, increased number
of high productivity dairy animals, shed improvement and expansion of dairy industries, modernization
and product diversification.

Though projects like HIMALI and PACT tried to integrate the production and marketing blending the
policy of value chain, the value chain development was found only for proposal submission and wining.
After winning the project, they started to work separately without any coordination. The effectiveness of
the dairy sector subsidy and support program was graded in different categories viz: very effective,
effective, not effective. Rank as very effective was mentioned by 28.57 percent recipients, 47.62 percent
ranked to effective and 23.81 percent ranked to not effective.

d) Sustainability

To gauge the sustainability, 9 indicators were set and conclusion was drawn based on the responses of
the recipients and statistical tool. An overwhelming respondent (95.24 percent) affirmatively mentioned
that the income has been increased while 4.76 percent negatively answerd but still 51.19 percent tried to
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increase income getting support from donors/providers, 30.95 percent implemented saving and credit,
16.67 percent operated own business and only 1.19 percent borrowed. The support and subsidy
recipients were encouraging on their current business and 88.1 percent of them mentioned that they can
continue the current business in future and 11.9 percent said they cannot continue. More than 3/4
subsidy/support receivers (78.57 percent) mentioned that they have enough finance, knowledge and skill
to operate the current activity/business and 21.43 percent said they don't have. About 2/3 percent (67.86
percent) recipients said that there are other agencies too to provide subsidy/support while 28.57 percent
said there are not and 3.57 percent recipients have no idea. The selection criteria are mostly similar to the
current subsidy and support. However, some of the providers provided complete grant without need to
payback, some provided subsidy in the business/materials equipment purchase etc., technical support
including partial financial support, and some provide materials/equipment/machine etc. The
subsidy/support recipients were asked about the sustainability of current activities on which 48.81
percent told that it is sustainable, 36.9 percent told very sustainable and 14.29 percent said not
sustainable.

The recipients were much more enthusiastic when the subsidy/support program was prepared and two-
third recipient rate that the program was very relevant while none of them said not relevant.

The receipints mentioned that the program was efficient as only 38.1 percent mentioned very efficient 50
percent mentioned efficient and 11.9 percent mentioned not efficient. Further in the effectiveness
ranking, very effective was mentioned by only 28.57 percent and effective by 47.62 percent and not
effective by 23.81 percent. On the other hand, only, 36.9 percent recipient mentioned that it is very
sustainable, 48.81 percent said sustainable and 14.29 percent said not sustainable.

The program's strengths were release of money as per contracted amount, diversification in social,
technical and financial matters, investment in the production sector, teaches and motivate for
commercialization, emphasis on the innovation, encourage the farmers in livestock and dairy sector,
improvement in production and quality of milk, assist in dairy product diversification, promote groups
and cooperatives in milk production and product diversification, increase in lactating cattle and buffaloes,
add step in self-sufficiency in agriculture, increase social awareness, increase income, increase awareness
in health and education and initiative towards making self-sufficient in dairy products.

Weakness of the program were: poor information dissemination, tedious process (time consuming,
sometimes decision done only after appropriate time over), no continuity in the activities, weak
monitoring and evaluation, subsidy/support very less and not possible to good performance, poor
coordination among and between the government agencies, cannot accommodate the off-farm activities,
complicated guideline and difficult to understand (need other consultant to know the provisions), access
only to the influential persons/institutions, provided only to the institutions not to the individual farmers,
increased dependency, misuse of subsidy/support, inapprrpriate recipient selection received by those
who have access to decision making authority, smell of corruption (financial transaction in sanctioning
subsidy/support), approval of very less amount compared to requirement and incomplete project but
lack of action against those who failed to follow the contract and did not perform after signing the
contract.

Recommendations

Based on the findings of the evaluation following recommendations have been made for future
intervention:

a) Policy and guideline

Our policy should be inclined towards making the dairy farming as enterprise and farmers as
entrepreneurs and should not make them dependent. Technical support with policy interventions like
preparing business plan, access and availability of soft loan, assessment of the business plan, easy loan
process, subsidized insurance premium, provision of full package of technical management services by
the government, provision of adequate loan in witness of government authority, stop providing cash
subsidy to the big commercial farms/processing industries but provide buy back guarantee for their
production. This guarantee should be offered by local or the federal government.
xv
For small dairy farmers/dairy industries provide support and subsidy to improve the current
farming/processing practice. Make the guideline easily understandable to the recipients. The guideline
should not be the barrier to apply by any enterprise/industry/farms. The proposal format should be
simple and in matrix form seeking what you want to do? what will be the result after you do this? what
activities you need to do for achieve this? how you will do? where you will do? when you will do? how you
measure that the things you wanted to do is achieved and what is the budget required (Activiti wise).
Following things should be considered:

 Provision of reward and punishment to the subsidy/support receiver

 Subsidy on production should be implemented with strong database establishment to
accommodate entire farmers.
 Involve the farmers/entrepreneurs while preparing such policies
 Policy should ensure subsidy/support to the genuine who really work and discourage the fake
seekers.
 Emphasise the kind support than the cash
 Make policy to make the farmers entrepreneurs and farming as entrepreneurship
 Coordinate with local /provincial government and central government to increase road network
at dairy farming potential areas and ensure one door subsidy/support system with appropriate
database establishment
 Provide block soft loan subsidy/support to the dairy processing industries to establish their own
milk pocket area and allocate specific milkshed areas for specific dairy processing industries with
buy-back guarantee of milk produced by the farmers.

b) Implementation

 Develop strong implementation plan with project control mechanism (activity tracking system)
 Execute effective program continuously with required improvements and discontinue those
programs that could not contribute
 Link the production with marketing and market assurance
 Manage support by balancing inputs and services i.e. provision of inputs and services to get
better result
 Support for transportation of goods and materials
 Increase access and availability of soft loan/subsidized loan and insurance by implementing
government policy
 Implement forage mission, soil test, maize mission

c) Structure development

 Establish a strong database to have complete record of milk production and processing to
administer subsidy against the production. A computer/mobile application shall be prepared to
collect the information from service center/local government
 Continuous training and skill development compatible with technology development
 Develop the structure in compliance to criterion fixed for support and subsidy
 Pay due attention to new and affordable technology for modernization
 Increase milk collection centers and chilling centers at strategic location
 Mobilize local government to develop local structure for dairy sector development
 Manage skilled, experienced and efficient technical manpower
 Establish structure that increase access and availability of subsidy/support to genuine seekers
 Provision of exchange and observation tours
 Establish milk chilling centers at strategic location supported by establishment of MPCs
 Establish strong and functional value chain relationship between the actors

d) Monitoring and evaluation

xvi
 Develop calendar of monitoring in compliance with the project objectives and calendar of
operation of project activities
 Meaningful field verification should be done to know exact situation of the subsidy/support
applicant and select appropriate applicant
 Develop indicators of the projects and monitoring indicator accordingly
 On site suggestion and consultancy support should be provided for improvement and completion
of the activities within time frame and budget.

xvii
 CHAPTER: 1 BACKGROUND

1.1 Introduction

In Nepal, majority of the population resides in the rural areas with majority of the population still
dependent on agriculture for their livelihood. However, the current status of the crop productivity of
large sectors of the rural population is exceedingly poor. Agriculture being subsistent in nature, crop yield
is low and family labor is not fully employed. No major improvement in crop productivity has been
achieved though it has been in priority in all-national budget due to constraints in infrastructural support
and capacities to make appropriate investment. In addition, the distribution of land is such that the
number of small and/or marginal farmers and landless dominate the scene and the resources of this class
of people are very meager and much of the household is heavily indebted.

Livestock keeping, mainly the milk animals are the part and parcel of the life of people residing in the
country. Because, they provide milk and meat (in case of buffalo), draft power for ploughing and
transportation, manure for replenishing soil nutrients, power for cooking, and are items of trade for
emergency cash needs. As such, majority of households keep one or two cows and/or buffaloes to
supplement their income. So, dairying on organized sector could be an instrument to bring positive
changes. At the same time, it would provide regular income particularly to the deprived class people for
improving their economic status.

Dairy sub-sector is one of the key contributing sectors in Nepalese economy. It shares around 93 per cent
of the total Gross Domestic Product (GDP) and 26.8 per cent of the Agricultural GDP. At household level, it
contributes to maintain food and nutritional security and generates rural employment and ensures flow
of money from urban to rural areas. In Nepal, rural households are mainly involved in dairy business and
about 200,000 farmers through around 2,000 primary milk producers’ cooperatives (MPCs) are engaged
in delivering milk from rural to urban areas.

Cattle and buffaloes are the major dairy species in the country and to some extent yak (Nak) in the high
mountain region. The estimated population of cattle and buffaloes are 7.3 million and 5.1 million
respectively (MoAD, 2015/16). Of these animals, the milking cows and buffaloes are about 1.02 million
and 1.35 million, respectively. Total milk production is 1,854,247 Mt. consisting of cow milk 643,806 Mt.
and buffalo milk 1,210,441 mt. The buffalo contributes around 65 per cent of the annual milk production
and cow milk is only 35 per cent. This is mainly due to extremely low productivity of non-descript
indigenous cattle as compared to that of buffaloes. The population of yak and Chauries has been reported
to be declining rapidly due to various inherent and external constraints. Buffaloes are also being kept for
meat whereas the contribution of yak and their crossbred in the high Himalayan region as pack animals is
also substantial. The dairy sector is gradually emerging as commercial/semi commercial enterprise
particularly in the peri-urban areas of the country and has a great future prospect to develop as a high
value commercial product.

So far, a lot of efforts have been made to increase milk production and collection in the country. One of
such efforts is the supports and subsidies provided to the milk producers. The support and subsidies are
provided for inter alia livestock rearing, farm improvement, feed development, milk chilling, milk quality
testing, milking machine, establishment of small scale milk processing plants etc. As a result of this and
also by being an easy traditional practice and instantly remunerative, the farmers have been very much
attracted in dairy livestock keeping. To facilitate the farmers to sell their milk, the dairy industries have
extensively expanded their milk collection network from east to the far west.

1.2 Objectives of the Study

National Dairy Development Board (NDDB) is the apex level policy making body formed by the
government of Nepal in 1992 for holistic dairy sector development of the country. Functions and duties of
NDDB includes formulation and recommendations on policies on import and export of good necessary for
production and promotion of milk and milk products, acceleration of the implementation of approved

3
http://therisingnepal.org.np/news/14668
1
policies; formulation and recommendation on pricing policy of milk to Government of Nepal;
encouragement to development of dairies through the medium of co-operatives; monitoring, evaluation
and review of dairy development and registration of dairy industries. As policy inputs, NDDB has been
engaged in carrying out studies on various aspects of dairy development in Nepal. Accordingly, NDDB
wants to carry out a study on the Impact of Dairy Sector Subsidy and Support in Nepal with the following
objectives:
 To identify the types of supports and subsidies provided to the milk producers by the
government agencies as well as the development partners including both the national
and international non-government organizations;
 To find out how the supports and subsidies are used by the milk producers;
 To examine the socio-economic effects of the supports and subsidies among the milk
producers;
 To find out the actual needs of the milk producers; and
 To suggest the appropriate supports and subsidies for increasing milk production.

1.3 Scope of the Study

The study covered the following areas of supports and subsidies in the dairy sector:
1. Analysis of the dairy support and subsidy policy and programs of the government of Nepal and
the development partners including both the national and international non-government
organizations.
2. Identification of the types of supports and subsidies provided by the government as well as the
development partners including both the national and international non-government
organizations.
3. Analysis of the use of supports and subsidies by the recipients by types.
4. Analysis of the efficiency and effectiveness of the supports and subsidies by types in terms of the
opportunities created for improving dairy farming practices.
5. Analysis of the shortcomings of the supports and subsidies.
6. Assessment of the economic effects in terms of change in the quantity of milk production,
household income, livestock composition and milk production performances due to supports and
subsidies.
7. Analysis of the social effects in terms of gender role, education, health and sanitation etc. due to
supports and subsidies.
8. Analysis of farmers' perceptions/attitudes towards the supports and subsidies.
9. Analysis of the perceptions/attitudes of agencies providing the supports and subsidies.
10. Study on the impact of support & subsidies on the competitors competing in the same sector/
segment.

CHAPTER 2. METHODOLOGY

2.1 Desk study

The literatures/ documents related to dairy sector specially the dairy value chain study reports, and
related problems, issues, experiences and other relevant documents were collected and reviewed.
Especially the government's policy, programs, guideline, operating manuals about the dairy development
focused on dairy value chain was collected and reviewed. Similarly, the survey tools prepared and used by
NDDB and other agencies were also collected and reviewed.

2
2.2 Consultation with concern authorities

Concern authorities in National Dairy Development Board (NDDB) was met and discussed on various
aspects of dairy value chain and the subsidy/support provided. Need of study on impact of
subsidy/support and its gravity, objectives and experiences during its implementation in the field level
was discussed. This process provided clear insight on the objectives and indicators of the assessment.

2.3 Identification of the subsidy/support providers and receivers

Based on the literature review 13 grant/subsidy/support providers in dairy sectors were identified
(Table 2.1).

Table: 2.1 Subsidy/ Support providing agencies in dairy sector in Nepal

SN Agencies Projects/Support/Grant/Subsidy Remarks

1 Ministry of Agriculture  Project for Agriculture Commercialization and

Land Reform and Trade (PACT)- cow/buffalo rearing, dairy
Cooperative processing, fodder/forage promotion
 Himali Project (cow, Chauri rearing, cheese
making)
 Agriculture and Food Security Project (Milk
chilling)
 Cooperative strengthening program (Dairy
processing and cow rearing)
 NARDF- Animal feed and animal breed
improvement)
 Kisan KO Lagi Unnat BiubIjan Karyakram
(KUBK)
 High Value Agriculture Project (HVAP)
2 Department of  Dairy processing and cow rearing
Cooperative (DoC)

3 Department of  Improved cattle/buffalo resource development

Livestock Services center
 Milk Analyzer and dairy processing
4 National Dairy  Dairy animal rearing
Development Board  Organization strengthening (CDCAN)
(NDDB)  Milk analyzer
 Dairy processing

5 Poverty Alleviation  Different NGOs, CBOs, Cooperatives and Information not

Fund (PAF) private sector agencies available

6 Youth Self  Different NGOs, CBOs, Cooperatives and Information not

Employment Fund private sector agencies available
(YSEF)

3
 SN Agencies Projects/Support/Grant/Subsidy Remarks

7 Development Partners  DANIDA (Dairy animal rearing, dairy

processing)
 SAMARTH (Dairy processing, cold chain,
Market development)
8 I/NGOs  Practical Action (MPC strengthening- dairy
cold chain, animal feeding, dairy processing)
 HEIFER International (dairy cold chain, dairy
animal rearing)
9 Cooperative  Software support only
Development Board

Table 2.2 below describe about the number of grants/subsidy/support in dairy sector, which
numbered a total of 251.

Table: 2.2 Total universes4 based on literature review

KU HVAP SAM UNN Practi

BK ATI- SLVC- cal SAM
NDD NAF NAR HIM ART DANI Heife Actio ART
SN Districts B DLS PACT SP DF ALI DOC H DA r n H Total

1 Ilam 4 - - - - - 2 - - 1 5 1 - 2 15

2 Morang 2 1 - - - - 5 - - - - 1 - 1 10
Dhanush
3 a 1 - 5 - - - - - - - - 1 - 1 8

4 Sarlahi 4 - 2 - - - 1 - - - - 1 - 1 9

5 Kabre 17 1 3 - - - 2 - - 2 - - - - 25
Sindhup
al
6 Chowk 8 4 - - - 5 - - - - - - - 17

7 Chitwan 20 12 1 - - - 9 - - 2 - 1 2 2 49

8 Rasuwa - - - - - 7 - - - - - - - - 7

9 Dolkha 1 - 5 - 1 10 2 - - - - - - - 19

10 Kaski 12 1 - - 1 - 6 - - - - 2 - - 22
Rupande
11 hi 31 1 - - - - 2 - - - - 1 - - 35

12 Dang 4 - - - - - - - - - - 2 - 1 7

13 Bardiya 3 2 - - - - - - - - - -

4 This figure may be different to actual in the district

4
 KU HVAP SAM UNN Practi
BK ATI- SLVC- cal SAM
NDD NAF NAR HIM ART DANI Heife Actio ART
SN Districts B DLS PACT SP DF ALI DOC H DA r n H Total

2 1 8

14 Surkhet 2 3 - 3 - - 1 - - - - - - - 9

15 Kailali 7 - - - - - - - - - - - - - 7
Dadeldh
16 ura - - - 3 - - - - - - - - - 1 4

Total 116 21 20 6 2 17 35 - - 5 5 12 2 10 251

Note: DLS subsidy is one Lakh to 3 Lakh (Out of 21, 14 are for milk analyser), Directorate of Animal production and
marketing; PACT, DOC, HIMALI, Heifer, PA up to 10 Lakh and more; and NDDB grant varies from small to medium (1
Lakh to 5 Lakh) (67 for dairy animal production, 23 milk analysers, 3 dairy industries, 21 chilling VAT, 4 institutional
strengthening and 3 generators.

2.4 The study areas

As guided by the ToR, the study was carried out in the following major dairy pocket of the
provinces/districts.

Table 2.3: Geographical distribution of sample districts

Province Districts No. of Districts
1 Ilam and Morang 2
2 Dhanusha and Sarlahi 2
3 Kavreplanchok, Sindhupalchok and Chitwan; and Rasuwa and
5
Dolakha for Cheese production
4 Kaski, and Rupandehi 2
5 Dang, and Bardiya 2
6 Surkhet 1
7 Kailali and Dadeldhura 2
Total 16

2.5 Coverage by type of grant

The grant providers were classified by two types of grants:

a) Institutional grant provider particularly to cooperatives, associations, CBOs, private limited

companies
b) Individual grants provider to individual farmers private (single person)

2.6 Sampling and sample selection

There was ambiguity about the universe of grant providers in dairy sector, types of grant provided, grant
providing process, and amount of grant provided. It was designed to cover 68 grant/subsidy receivers
and 16 support (kind-materials) receivers. Out of them 75 percent was supposed to be institutional and
25 were supposed to be individual. It was also planned to cover the sample size interchangeably in case of
unavailability of one another.

Qualitative information was also collected to verify the information from third eyes in the community.
Key Informants Interview (KII) and Focus Group Discussion (FGD) were conducted from the sample
districts. It is proposed to conduct five KII and one FGD from each district cumulating 80 KII and 16 FGDs.

5
2.7 Data collection tools preparation
Based on the literature review and consultative meeting with concerned authorities of NDDB
structured and semi-structured questionnaires/checklists were prepared to address the
objectives and scope of work as defined in the ToR. Fifty indicators were fixed including 10 for
relevancy, 25 for efficiency, 6 for effectiveness/impact and Each question represents the
indicator set for the study under relevancy, efficiency, effectiveness and impact and
sustainability of the study. Semi structured tools such as checklists/interview guides were
designed to conduct Key Informant's Interview (KII), Focus Group Discussion (FGD), and
secondary information collection. Following were the data collection tools:

 Tool: 1 Structured questionnaire for dairy farmers and entrepreneurs

 Tool: 2 Structured questionnaires for institutional grant receivers (Cooperatives, NGOs, private
sector agencies and CBOs)
 Tool: 3 Semi structured check-list for Key Informant’s Interview (KII) and FGD. FGD was done
with Milk Producers Cooperative (MPC), while KII was done with dairy veterinary service
providers, supporting line agencies, dairy-equipment/ input suppliers, milk processors,
marketing channel/ marketers, dairy experts and local governments (R/UMPs).
 Tool: 4 Semi structured check-list for case studies

These tools were revised and finalized after incorporating the feedback/suggestions received from NDDB.
The final tools were submitted to NDDB and used after NDDB's approval.

2.8 Training of the survey team

A survey team of field supervisors and enumerators experienced in carrying out similar surveys
were selected. Two days training was organized to orient the field survey team on the study
goal, objectives, methodology of the research, sampling design, sampling process, sample size,
quality control of the data collection processes. The orientation training provided enough
knowledge about survey methodology, process, contents of each category of data collection
method and tools to be used. Besides this, participants were provided an opportunity to have
experiential learning about using the designed data collection tools in real life situation. After
the training session, participants undertook simulation exercise where one participant served
as respondent and other will act as interviewer. Based on the experience gained through
simulation exercise, the core team members of the study team collected feedback from the
participants and the survey tools/questionnaires were revised accordingly.

For data collection a team of 22 persons with one supervisor and 2-3 enumerators was formed
for each team as presented in Table 2.4. The supervisor manages the field, conduct meeting and
Key Informant's Interviews (KIIs) with related persons and conduct Focus Group Discussion
(FGD). The enumerators conducted the quantitative survey and assist the supervisors to
conduct KIIS and FGDs.

Table 2.4: Field survey team composition

No. of
Province Districts Team Supervisor Enumerators
Districts
1 Ilam and Morang 2
1 1 4
2 Dhanusha and Sarlahi 2
3 Kavreplanchok, 1
Sindhupalchok and 3 1 3

6
 No. of
Province Districts Team Supervisor Enumerators
Districts
Chitwan

3 Rasuwa and Dolakha (for 1

Cheese production) 2 1 2
4 Kaski and Rupandehi 1
2 1 2
5 Dang and Bardiya 2 1
1 3
6 Surkhet 1
7 Kailali and Dadeldhura 1
2 1 2
Total 16 6 6 16

2.9. Data collection from the field

2.9.1 Sample selection

In all 16 districts, meetings with the related agencies and individuals was held so as to be
informed about the grant providers in dairy sector since last 5 years. Based on this meeting, list
of all grant providers was verified; and the potential samples were drawn from the list and cash
and kind grant receiver were identified. Based on the list sample was selected covering grant
receiver a) Rs. 100,000 or less; b) Rs. 100,001 and less than 500,000; c) Rs. 500,001 to
1,000,000 and d) Rs. 1,000,001 or more.

Table: 2.5 Final sample

Sample by category of grant/subsidy cash receiver5

Kinds/
Grand
SN Districts
1 Lakh 1-5 5-10 More than Sub Total
Support
or less Lakh Lakh 10 Lakh Total

1 Ilam 1 1 1 1 4 1 5

2 Morang 1 1 1 0 3 1 4

3 Dhanusha 1 0 0 2 3 1 4

4 Sarlahi 2 1 0 1 4 1 5

5 Kabre 5 1 1 0 7 1 8

6 Sindhupalchowk 1 1 1 1 4 1 5

7 Chitwan 5 1 1 1 8 1 9

8 Rasuwa 1 0 1 1 3 1 4

5
NDDB provided 50 thousand to 3 Lakh, DLS provided 1-3 Lakh, DoC 3 to more than 10 Lakh, HIMALI and
PACT more than 10 Lakh, for dairy animal production while no financial information from other agencies was
found.
7
 Sample by category of grant/subsidy cash receiver5
Kinds/ Grand
SN Districts
1 Lakh 1-5 5-10 More than Sub Total
Support
or less Lakh Lakh 10 Lakh Total

9 Dolkha 1 1 1 2 5 1 6

10 Kaski 3 1 1 1 6 1 7

11 Rupandehi 4 1 1 0 6 1 7

12 Dang 1 1 1 0 3 1 4

13 Bardiya 1 1 0 0 2 1 3

14 Surkhet 1 1 2 0 4 1 5

15 Kailali 1 1 1 0 3 1 4

16 Dadeldhura 1 1 1 0 3 1 4

Total 30 14 14 10 68 16 84

A total of 84 samples were taken for study. Based on the availability every category of the grant receiver
was covered including dairy farmers, MPCs, MPCU, chilling centers, processing industries and
associations. Sample was evenly distributed from all 16 districts based on the availability of
subsidy/support receiver and in case of unavailability of the level of subsidy/support was substituted by
other category. NDDB grant/subsidy/support receiver was covered in every district where found. Cash
receiver was replaced by kind receiver and vice versa in case of non-availability.

2.9.2 Field study

Field study comprised of both the structured questionnaire based quantitative and semi-
structured tools including checklist/interview guide based qualitative survey approach.
Quantitative information was collected using mobile application while qualitative information
was collected in paper.

2.9.2.1 Interview with grant receiver

Grant receivers both individual and institutional were interviewed using structured questionnaire
through face to face interview. The survey was separately arranged for each category i.e. individual,
institutional, dairy farmer, MPCU, MPCs/ collection centers, chilling centers and processing industries and
associations. Due attention was paid to GESI while selecting sample.

2.9.2.2 Key Informant's Interview

Key Informants were drawn from among the concerned stakeholders who are involved directly
or indirectly in the project implementation process at various levels and considered
knowledgeable about the project activities. Among others, key persons representing NDDB,
MPCS, MPCU, CDCAN, MOAD, DLS, and FNCCI at the centre, concerned provincial staff members,
DLSO, DADOs, DCCIs, I/NGOs and other stakeholders in the district were interviewed using a
separate checklist developed for this purpose.

8
2.9.2.3 Case studies

Eight 13 case studies were taken from 16 sample districts. These studies covered both success
and failure cases and discipline of interventions. Table 2.6 depicts the field study methodology.

Table 2.6: Field survey methodology

Respondents Sample Survey method Survey tool

Cash receiver 68 Quantitative survey Structured questionnaire

Kind receiver 16 Quantitative survey Structured questionnaire

Sub-total 84

KII 80 Qualitative survey Semi-structured tools

FGD 16 Qualitative survey Semi-structured tools

Case studies 8 Qualitative survey Semi-structured tools

Sub-total 104

Total 188

Apart from this, the officials of related government and non-government agencies were
interviewed by using the KIS tool.

Project objectives, scope, methodology and analytical framework

Survey Analytical
Particulars Method/Data Survey tools Framework
source
Objectives: 1 To identify the types of supports and subsidies provided to the milk producers by the
government agencies as well as the development partners including both the national and
international non-government organizations;
Scope: 1 Identification of the types of Efficiency/
Semi structured
supports and subsidies provided by the Secondary- annual Relevancy
check list and
government as well as the development reports of the
structured
partners including both the national subsidy provider
checklist for
and international non-government and grantee survey
grantee survey
organizations
Scope: 2 Analysis of the dairy support Efficiency/
and subsidy policy and programs of the Relevancy
government of Nepal and the Secondary (Subsidy
Semi structured
development partners including both providing
check list
the national and international non- guidelines)
government organizations.

Objectives: 2 To find out how the supports and subsidies are used by the milk producers;
Scope: 3 Analysis of the use of supports Grantee survey, KII, Semi structured Effectiveness
and subsidies by the recipients by FGD and case check list and and
9
 Survey Analytical
Particulars Method/Data Survey tools Framework
source
types. studies structured efficiency
checklist for
grantee survey
Scope: 4 Analysis of the efficiency and Effectiveness
Semi structured
effectiveness of the supports and and
Grantee survey, KII, check list and
subsidies by types in terms of the efficiency
FGD and case structured
opportunities created for improving
studies checklist for
dairy farming practices.
grantee survey
Semi structured Effectiveness
Secondary
Scope: 5 Analysis of the shortcomings check list for KII, and
information from
of the supports and subsidies. FGD and structured efficiency
subsidy providers
questions for
and grantee survey
grantee survey
Objective: 3 To examine the socio-economic effects of the supports and subsidies among the milk
producers;

Scope: 6 Assessment of the economic Impact and

effects in terms of change in the Semi structured effectiveness
quantity of milk production, household check list for KII,
income, livestock composition and milk Grantee survey FGD and structured
production performances due to questions for
supports and subsidies. grantee survey

Scope: 7 Analysis of the social effects in Semi structured Impact and

terms of gender role, education, health check list for KII, effectiveness
Grantee survey,
and sanitation etc. due to supports and FGD and structured
case studies
subsidies. questions for
grantee survey
Scope: 8 Study on the impact of Semi structured Impact and
Secondary
support & subsidies on the competitors check list for KII, effectiveness
information,
competing in the same sector/ segment. FGD and structured
grantee survey, KII
questions for
and FGD
grantee survey
Objective: 4 To find out the actual
needs of the milk producers; and

Scope: 9 Analysis of farmers' Relevancy

FGD and structured
perceptions/attitudes towards the Grantee survey and
questions for
supports and subsidies. KII
grantee survey
Scope: 10 Analysis of the Relevancy
perceptions/attitudes of agencies Semi structured
KII
providing the supports and subsidies. check list for KII,

Objective: 5 To suggest the appropriate supports and subsidies for increasing milk production.

10
 Survey Analytical
Particulars Method/Data Survey tools Framework
source
Relevancy,
efficiency,
Over all effectiveness,
impact and
sustainability

2.10 Data Management and analysis

Quantitative data: All completed questionnaires through mobile application were stored
separately in a server confidential place at NEPC office. Questions with open-ended responses
were coded manually. A database was designed using MS-Excel. Ten per cent of each day’s
entered data was checked by the data manager to control errors. Data was checked for out-of-
range values and inconsistencies between variables and analyzed and presented both in the
tabular and graphical forms.

Qualitative data: Qualitative data collected through FGDs and KIIs with respondents was
organized by key issues and themes and the answers to questions within the themes were
grouped and summarized in data analysis frameworks. A verbatim quote that illustrated the
views of the majority of participants or contradicted the majority view was extracted from the
interviews and was included in the study report within the relevant sections. Thus, deductive
approach was implied where similarities and dissimilarities among the responses was
examined. Method of content analysis was also employed for classification, summarization and
analysis both at the descriptive and interpretative levels.

After getting quantitative data from the mobile application was cleaned to ensure a robust
quality of analyzed data. The development of coding frame and categories used in the
qualitative data analysis wasdone by a team of two researchers working independently and
then their coding frames were compared.

2.11 Progress update

The progress report of the study was prepared and submitted to the NDDB regularly during the
whole study period. The status of the activities, problems and solution measures undertaken
was shared with NDDB to get work completed in time.

2.12 Report preparation

Draft report was prepared based on the valid information collected from the primary and
secondary sources. The data collected from different methods and tools have been triangulated
for its validity before analysis. The report has been prepared based on quantitative and
qualitative data collected from primary and secondary sources. Besides analyzed tables, the
report also includes pictures, graphs, diagrams, narrative analysis, and other inferential
statements that sufficiently extrapolate the prevailing dairy sector. The draft report was
submitted to NDDB for its comments and suggestions. Report was structured as presented in
Table 2.7.

11
Table: 2.7 Report analysis frames

SN Parameters Ranking

1 Relevancy 1) Very relevant 2) Relevant 3) No relevant

2 Efficiency 1)Very efficient 2) Efficient 3) Not efficient

3 Effectiveness and 1) Very effective 2) Effective 3) Not effective

impact

4 Sustainability 1)Highly sustainable 2) Sustainable 3) Not sustainable

5 Overall 1)Highly satisfactory 2) Satisfactory 3) Not satisfactory

Draft report was presented to the stakeholders in stakeholder workshop to collect their feedback,
comments and suggestions. After incorporating the relevant comments, suggestion and feedback from
NDDB and other stakeholders' final, report was prepared and submitted.

2.13 Data quality assurance

2.13.1 General measures

The following measures were taken for the quality control of data collection:
 Provision of a thorough training for the field researchers,
 Development of research tools that are clearly understood by both the researchers and the
respondents,
 Mandatory checking of completed questionnaires by the research assistants themselves and then
by the field supervisors for the completeness and accuracy of collected information before the
researchers leave for data collection,
 Application of conflict sensitivity and Do-No-Harm approaches both during the questionnaire
design and survey,
 Maintenance of research ethics during the entire process of the study,
 Minimization of gender and linguistic barriers during the collection of data,
 Monitoring of field research to ensure that the desired number of interviews are conducted on
timely basis,
 Establishment of a mechanism to ensure that challenges faced in the districts are duly reported
and feedbacks are promptly provided,
 Establishment of range and skips in the data entry program, and
 Generation of frequency distribution tables to examine whether or not some possible outliers in
data are due to errors in data entry.

In addition, the field teams were also instructed to review the responses after completing their daily work
and visit the respondents again the next day if any information was found missing and/or any inaccurate
or inconsistent information was found. The enumerators were particularly directed to present the filled
questionnaires to the supervisors for checking; and supervisors to meticulously check the filled
questionnaires for accuracy and completeness. The field teams were strictly made aware to leave the
district only after confirming that the collected information is complete, accurate and consistent with
those asked in the questionnaires. They were warned to be liable if any mistakes are found in filling the
questionnaires.

The central specialist team members (Team Leader, dairy specialists and sociologist) also
visited the survey site during data collection. During the visit they checked whether the field

12
teams are working as scheduled, randomly checked the filled questionnaires and offered advice
in case the field team faced any difficulties in data collection.

Moreover, each field supervisor and enumerator were provided the hotline telephone number
in Kathmandu office of NEPC where the field researcher could deliver their problem. The NEPC
management share the problem and promptly respond to the field team with solutions.

2.13.2 Instruction to the survey team

To make the survey as best as possible, the survey teams was instructed to comply with the following
procedures during the field survey:
 To select the settlement/ward of the U/R municipalities which is comprised of heterogeneous
population of mixed caste; and to encompass the neighboring settlement/ward if there are no
single village having such characteristics;
 To prepare the list of grant receiver in consultation and presence of knowledgeable persons of
the village;
 To conduct the interview by visiting the selected HHs but not by forming the group;
 To firstly greet the respondent and acquaint her/him about the purpose of survey;
 To politely request but not command the respondent to find a secluded place for interview so as
to avoid intervention during interview by either other HH members or any outsiders;
 To minimize gender and linguistic barriers during the survey;
 To ensure that the desired number of interviews are conducted on timely basis;
 To duly report any challenges faced in the districts;
 To cut by a single line if any deletion is to make during the questionnaire filling;
 To check the questionnaire if all questions are responded;
 To thank the respondent after completion of the interview;
 To respect the village's dignity and customs while conducting the survey; and
 To depart from the village only after clearing all the payments related to lodging, food and other
items.

CHAPTER 3. FINDINGS ON LITERATURE REVIEW

3.1 Policies Related to Dairy Sector Support and Subsidy

3.1.1 National Agriculture Policy (NAP), 2004

While the APP was being implemented, National Agriculture Policy, 2004 was introduced. The NAP, 2004
adopts a long-term vision oriented towards transforming the current subsistence-oriented farming
system into a commercial and competitive one. The NAP aims to contribute to ensuring food security and
poverty alleviation. Its objectives are: (a) To increase agricultural production and productivity, (b) To
develop the basis of a commercial farming system and make it competitive in the regional and world
markets, and (c) To conserve, promote and properly utilize natural resources, as well as the environment
and bio-diversity. The policies of the NAP provided for achieving its objectives include: (a) to ensure the
needs of farmers (I) with access to resources; and (II) with comparatively less access to resources, (b) to
provide special facilities by classifying farmers into (I) those having less than half a hectare of land and
lacking irrigation facilities; and (II) those belonging to dalit (so-called untouchable) and utpidit
(downtrodden, underprivileged) classes and other marginal farmers and agricultural workers.

The policy area coverage of the NAP is comprehensive, and it provides a participatory method to ensure
the involvement of the stakeholders at the concerned level (village, district, region or nation) in the
process of formulating, monitoring and evaluating plans connected with the agricultural sector. The NAP
provides for the formation of a National Agricultural Development Board at the national level, and
Agricultural Development committees at national, regional, district and VDC levels. The NAP aims to make
Village Development Committees (VDCs) and District Development Committees (DDCs) responsible for
the formulation, implementation, monitoring and evaluation of plans in accordance with the Local Self-
governance Act, 1997. The Policy gives special priority to a set of high-value agricultural products and
13
seeks to develop commercial and competitive farming systems by a gradual extension of livestock
insurance programs and organic farming. Overall, the NAP, 2004 has the merit of being decentralization-
based, friendly to small-holder farmers of livestock, and inclusive of untouchables, marginalized groups
and poor communities. Our specific policy suggestions vis-a-vis the existing strengths of the NAP, 2004
from the livestock point of view are as follows:

Strength Weakness
Identification of priority areas of agriculture in Identification of too many areas as priority
Nepal impedes effective implementation

Developing integrated National Agricultural  The institution responsible for developing

Resource Centers capable of operating National Agricultural Resource Centers
survey/surveillance and laboratory services and procedure for them are not specified
for diagnosis of livestock disease, soil analysis,  Capacity development training authority
seed certification, and crop protection, and and systems should be specified and put in
providing capacity development training to place.
entrepreneurs, business persons, cooperative
workers and agriculture activity workers
Provisions on livestock and crop insurance Legislation, responsible institutions and
and extension of livestock insurance program implementation modality is not developed for
effective livestock and crop insurance.
Policy on commercializing different agro-  Agro-products to be prioritized for
products and attracting investors in commercialization and investment has not
agriculture properly identified across the country based
on market potential and specific strategies
for them should be developed, augmenting
the agro-based commodities listed in the
National Trade Integration Strategy (NTIS)-
2010.
 The policy incentives and programs to
promote forage crops to ensure
uninterrupted availability of feed and fodder
to livestock is not appropriately designed.
The forage manure-crop nutrient cycle is not
appropriately promoted to supply manure
essential for agricultural crops.
Policy to systematize and strengthen livestock A system and institutional arrangement for
quarantine services to raise the quality of livestock quarantine services has not put in
livestock products and market confidence in place to limit disease outbreaks and market
them impacts.

3.1.2 Dairy Development Policy, 2007 (2064 BS)

The policy (DDP) envisions investment in the income and employment generating and poverty-alleviating
dairy business. To achieve this vision, it has adopted the policy of providing pasture (grazing land) and
cattle feed year-round.

a) Strengths

The DDP encourages concerned organizations to provide collateral-free soft (concessional) loans, group
loans and technical assistance to farmers, particularly women and underprivileged communities, with a
view to promoting livestock farming. The DDP seeks to mobilize farmers’ cooperatives to promote
livestock insurance service extension and provides that the Nepal government may subsidize the
premium on livestock insurance obtained by farmers through their cooperatives and groups. Accordingly,
14
the Nepal Government, in its national budget speech-2014/15, has announced a 75 percent subsidy on
the livestock insurance premium.

1. To ensure quality dairy production, the DDP has entrusted the Department of Livestock Service
with the responsibility to provide technical services, manage cattle-feed and livestock health
training, and minimize costs.

2. The Policy is based on a long-term vision to encourage participation of public, private and
cooperative sectors in dairy production.

3. A DDP objective is to increase production and productivity of milk in rural areas which helps
alleviate rural poverty.

b) Weaknesses

1. To assure micro finance lenders and banks of the security of collateral-free loans, there should be
provisions for community-based group-guarantee and group-monitoring of dairy borrowers.

2. Incentives to disadvantaged communities will not materialize until social laws and practices
effectively erase the old social stigma against using milk and dairy items produced by so-called
low-caste people. This effort should coordinate with other social laws and law-enforcing agencies
including police and civil servants.
3. A large-scale livestock insurance system is yet to be developed. Subsidies is to be coordinated
with the Livestock Insurance Policy, and there is a need for a setting and monitoring mechanism
in this regard.
4. Resource centers of improved livestock (dairy animal) breeds need to be developed.
5. A mechanism to ensure participation of smallholder farmers (backward linkage) at all stages of
the value chain to retail products is essential.
6. Access of rural farmers to livestock support services and loans has to be increased through
district livestock offices and bank and micro-finance institutes.

3.1.3. Approach Paper to 13th Plan and Agriculture/Livestock Development Policies

After 2007, different stakeholders in the Government of Nepal (GoN) and society at large increasingly
perceived that the APP—viewed in a new national and international context—had not been successful in
achieving its main targets and that there was the need of a new long-term strategy, which in 2012
resulted in the formulation of the Agricultural Development Strategy. The agricultural sector
development policy in the ASOPs of the Approach Paper to 13th plan (2013/14–2015/16) has made
provisions for the livestock sub-sectoral development by including it in objectives, strategies and
operating policies. The agricultural sector objectives set in the Approach Paper to the 13th Plan are:

1. To increase the production and productivity of crops and livestock products,

2. To make crops and livestock products competitive and commercial,
3. To develop and disseminate environment-friendly agro-technologies to minimize the adverse
impacts of climate change, and
4. To conserve, promote and utilize agro-biodiversity The sectoral strategies for achieving the
objectives are directed towards
a) Promoting commercialization and diversification of agriculture and livestock
b) Developing crop and livestock industries and enhancing their product quality
c) Encouraging youths to take up commercial farming as a prestigious profession
d) Promoting agricultural and livestock marketing, and
e) Promoting the results-oriented application of technologies in the sector; while many of the
46 operating policies set in line with the eight priorities or strategies are generally related to
the overall agricultural sector, some others are specific to the livestock subsector:

1. to expand promoting campaigns regarding artificial insemination and fodder and forage
plantation,
15
 2. to develop rural infrastructures such as agro-roads, electricity, and communications,
3. to develop agricultural marketing network including livestock wholesale markets and hat
bazaars (open-air retail markets), and expand access of livestock information at local levels,
4. to develop technical manpower for agricultural sector and provide entrepreneurship and skill
development training required for agro-business,
5. to encourage production of high quality seeds, high-yielding breeds and vaccination, and to
develop bio-pesticides to treat animal for parasites,
6. to make provisions for livestock insurance, concessional agricultural loans, subsidy on livestock
related industrial equipment and tax rebate on trade to small and marginalized farmers,
entrepreneurs and business people,
7. to promote contract and cooperative farming with involvement of private entrepreneurs and
cooperative sectors,
8. to establish agriculture and livestock extension centers under the local bodies at each VDC,
9. to strengthen livestock related laboratories, and
10. to provide integrated agricultural and livestock services and make effective involvement of
national and international non-governmental organizations, universities and local bodies in
providing such services.

The TP Approach Paper—although the most recent of the three major policies and policy-documents we
have been considering—failed to make any mention of either of the other two, the NAP, 2004 and ABPP,
2007. No plan can be implemented in isolation without coordinating with other existing policy
frameworks and implementation mechanisms. Hence, it is desirable that the 13th Plan formulates and
executes plans and policies in pursuance and compliance with the previously issued and/or existing
national policies as starting points for revision. Even though the Approach Paper envisages
commercializing the livestock business and making this subsector competitive, lack of coordination and
collaboration with other subsectors of agriculture as well as with existing agriculture-related policies is
likely to handicap the accomplishment of the purpose. For instance, the National Agriculture Policy, 2004
has the policy to promote programs on improved livestock production and productivity, controlling
livestock-related diseases and systematizing livestock quarantine services; but the Approach Paper has
established no explicit linkage with such existing frameworks.

Same approach has been followed by the 14th plan (2016/17 to 2018/19).

3.1.4. Gaps between Policy and Implementation

National policy is a broad course of action adopted by the government in pursuit of its objectives. Nepal
has already a rich body of policies in favor of agriculture. The National Agriculture Policy and the
Approach Paper to the 13th Plan emphasize the central role of agriculture. Nevertheless, formulation of
some important policies has been excessively delayed. The gaps in policy and in the implementation of
existing policies are outcomes of

1. Lack of supportive adequate legislation (acts), rules and regulations for credible enforcement,
2. Inadequate resource allocation,
3. Ineffective coordination,
4. Irregular and weak policy and program monitoring and evaluation,
5. Lack of climate change monitoring,
6. Limited human resources and implementation capacity, and
7. Lack of continuity in leadership (short tenures of ministers and secretaries).

3.1.5 Gaps in Planning Process

The ADS (2012) identified the following gaps in the planning process:

1. Poor data base for agriculture sector, especially in the areas of productivity, inputs, trade, seeds,
improved breeds and agribusiness.
2. The periodic plans do not cover programs/projects to the implemented through private sector,
community-based organizations (CBOs) and non-government organizations (NGOs); the plans
very much concentrate on programs to the implemented by the government only.
16
 3. There is no system of output and impact monitoring and evaluation.

3.1.6 Livestock Policy and Vulnerability

The vulnerability of Nepal’s livestock subsector includes livelihood vulnerability and climate-change
vulnerability.

a) Livelihood Vulnerability

Livestock is an important resource of livelihood in Nepal [22]. The threats of livelihood vulnerability to
livestock farmers in Nepal are mainly due to small holdings, poverty, and socioeconomic marginality. A
majority of farmers in Nepal have poor resource endowments, small land holdings and lack of access to
adequate land, low bargaining power, and weak risk bearing capacity. For smallholders, losing livestock
has a great impact and lasting effect on livelihood so that livestock sickness and mortality could even
trigger chronic poverty. High vulnerability and reduced livelihood options has increased off-season
migration to India and more distant countries, which has increased the risks of indebtedness of poor
families and put additional burden on women, children and elder population to cope [24]. Despite its
crucial importance, Nepal’s policies did not pay adequate attention to livelihood vulnerability in
agriculture sector. For instance, Cameron (1998) found that the 20-year APP failed to grasp the nature of
livelihood inequalities and there was no targeting of livelihood vulnerable people by economic, social,
geographical or age factors [25,26].

b) Climate Change Vulnerability

Climate change impacts on the overall livestock system are mainly due to the changed water resource
supply, forest health, soil health, land use, and human settlement and migration patterns. Climate change
impacts in Nepal have added new dimensions of challenges to many sectors of natural resource
management. More severe impacts have been observed in the rural and remote areas where the
livelihoods of people are based on subsistence agriculture with limited livelihood options. People are
vulnerable to extreme weather events, have poor access to information and lack resources to cope with
and recover from climate-related disasters.

The impacts of climate change are not evenly distributed between different communities. Poor and
marginalized communities, who often live in disaster-vulnerable areas with limited information, limited
livelihood options and low adaptive capacity, are most vulnerable to climate change [25,27]. Similarly,
women are on the front line of climate change due to their multiple burdens to obtain livelihoods. The
predicted impacts of climate change will heighten existing vulnerabilities, inequalities and exposure to
hazards [28,29]. Effects of climate change tend to be more severe where people rely on weather-
dependent rain-fed agriculture for their livelihoods. In rural mountain communities with limited
livelihood options, adaptive capacity is low due to limited information, poor access to services, and
inequitable access to productive assets. Few studies have reported on the status of rural and remote
mountain areas in Nepal and on adaptation strategies in use.

Therefore, to address the climate-change vulnerability associated with the livestock subsector, there is a
great need of reorientation of the livestock related national policy, restructuring of the national
organizational system, enlargement of strong infrastructures and support services and promotion of
gender equality with increased inclusivity and empowerment of women. The national livestock policy
should address the needs of lasting sustainability, increased productivity and profitability,
commercialization, expanded markets, and diversification. Nepal’s National Adaptation Program of Action
(NAPA), 2010 recognized agriculture and food security as one of six thematic areas [17]. Although the
APP did not consider climate change issues, the 13th Plan (2013/14–2015/16) in its Approach Paper has
accorded 6th priority for the promotion of mitigating and adaptive techniques and practices to minimize
the adverse impacts of climate change on agricultural sector. But the same plan accorded the first (top)
priority to the implementation of the NAPA, 2010 and LAPA, 2011 for poverty alleviation. And, only 6th
priority has been given to designing and implementing programs related to climate change adaptation by
local bodies.

17
The dairy sector subsidy and support has been operational to address the NAP, ADS, DDP and approach
paper of 13th followed by 14th plan. Department of Livestock Service (DLS) entities namely: a) Livestock
and Poultry Marketing Directorate and b) Central Cattle and Buffalo Promotion Office under Livestock
Production Directorate have been involved providing subsidy and support to the farmers. National Dairy
Development Board (NDDB) an apex body for dairy sector development has also been actively working to
address the ADS, ADS and DDP. Similarly, through different projects viz: Commercialization of Agriculture
and Trade (PACT), High Value Agriculture Project (HVAP), Kisan Ka Lagi Biu Bijan Karyakram (KUBK),
Raising Income of Small and Medium Farmers Project (RISMFP), High Mountain Agriculture Business and
Livelihood (HIMALI) project, Agriculture and Food Security Project (AFSP) under the Ministry of
Agricultural Land Management and Cooperative are actively operating in providing subsidy and support.

3.2 Guidelines Related to Dairy Sector Support and Subsidy

Footing on the policy, support and subsidy providers developed the operational guideline to execute the
subsidy and support.

Name of Name of Summary of the guideline

Institution Guideline
National Dairy Best Dairy Objectives: Improvement of high yielding cattle/buffalo
Development (Cattle, breed; assist to reduce the cost of production, assist to
Board Buffalo) transform the farmers to commercial orientation and
Farmer
employment promotion. Subsidy/support shall be offered
Physical
Facility and for i) Shed construction/improvement, ii) collection of
Breed calves and rearing, iii) use for breed improvement.
Improvement
Guideline- Eligibility criteria are either or: Farm operationg since last
2072 2 years and having at least 100 improved breed cattle or
50 buffalo or have physical facility to accomodate at least
500 cattle/buffalo and the farm should be technically and
financially strong.. The physical facility should be
constructed in own land, farm should be oriented towards
mechanization, mention the details of equipment in the
farm, use of GHP and cultivating green forage in 100
Ropani/7.5 bigh of land, no grant/subsidy/support
amounting more than 30 Lakh in last 3 years, registerd in
VAT or PAN and submit tax clerance certificate.

Notice for subsidy/support application should be

published giving 35 days. There is evaluation committee
for evaluation of proposal. The Executive Director of NDDB
is the coordinator, technical officer of the NDDB is member
secretary, planning officer, account officer of NDDB,
Livestock Breeding Section from NARC, representatiove of
MOAD, Under Secretary level representative officer from
DLS and Board member farmers representative are the
members of the evaluation committee.

Strengthening Assist to develop the physical facility of Milk Producers

Milk Producers Cooperative (MPC), increase institutional capacity of
Cooperative MPCs/Us, support for self-employment through

18
Guideline 2070 cooperative business.
Provide competitive subsidy/support up to NRs. 3 Lakh for
4 MPCs/Us and the applicant institution should contribute
same amount of its own.

Proposal evaluation committee:

Executive Director of NDDB- coordinator, Board member
on behalf of farmers representative, representative from
DLS, subject matter specialist from NARC and Technical
Director of NDDB member secretary.

Monitoring: NDDB and concerned DLSO and third party as

per required. The subsidy receiver should label the
"Assisted from NDDB" in the physical structure/machine.

The subsidy shall be given for building construction,

equipment/machinery purchase, transportation vehicle,
establishment of milk collection center, milk processing
plant or dairy products sales center. 30 days' notice should
be published in national daily newspaper and the applicant
needs to apply in specified format endorsed by NDDB.

Eligibility: The organization should not get similar type of

subsidy/support of same or more amount from any
government or non-government organization,
recommendation from concern DLSO, VAT or PAN
registration and tax clearance certificate, audit report of
last FY, should apply on or before 30th day of notice
published in newspaper in NDDB.

Good Husbandry Practice (GHP) indicators viz: regular

vaccination, deworming, daily animal shed and utensils
cleaning, milk collection and transport in aluminum or SS
can and environment aspect should be addressed.
Capacity Objectives: Assist to develop physical facility, improve the
improvement entrepreneur's capacity, and increase employment
of small and opportunity through dairy business.
cottage dairy
industries Areas for subsidy/support: establish the dairy products
subsidy sales center, purchase of transportation vehicle, and
guideline-2071 establish the milk processing plant.

Eligibility: The organization should not get similar type of

subsidy/support of same or more amount from any
government or non-government organization,
recommendation from concern DLSO, VAT or PAN
registration and tax clearance certificate, audit report of
last FY, should apply on or before 30th day of notice
published in newspaper in NDDB.

Monitoring: NDDB and concerned DLSO and third party as

per required. The subsidy receiver should label the

19
 "Assisted from NDDB" in the physical structure/machine.

Proposal evaluation committee:

Executive Director of NDDB- coordinator, representative
from CDCAN, DLS, animal breeding division NARC and
Technical Director of NDDB member secretary.

Good Manufacturing Practice: Daily collection,

transportation and chilling, daily machinery, equipment
and utensils cleaning, use of aluminum or SS container to
store and transport milk has to be maintained.
Project for Competitive Project for Agriculture Commercialization (PACT)
Agriculture Matching provided three types of grants namely small, medium and
Commercializati Grant for large projects. It follows different stages for project
on (PACT) micro, small selection: i) Project Concept Note (PCN); ii) Full Project
and medium Proposal; iii) Project Award; iv) Monitoring and
projects Evaluation.

 Micro size grant (Not to exceed 10,000 US$ equivalent)

 Small size grant (not to exceed 35,000 US$ equivalent)
 Medium size grant (not to exceed 100,000 US$
equivalent)

This project has been providing matching grant to the

eligible organizations, particularly farmer groups,
cooperatives, producers associations and private firms
since its inception. The overall purpose of PACT's matching
grant is to assist grant recipients (GRs) to actively engage
in profitable market-oriented production and better
integrate agricultural commodity value chains.

Eligibility for PCN:

A copy of registration certificate issued by the competent
authorities as specified in eligibility criteria; A copy of
registration certificate at Inland Revenue Office as
applicable; Applicant's profile and experience including
certificates of awards and prizes if received (focus on
applied value chain); Audit reports and tax clearance
certificates as applicable; Statement on partnership and
collaboration among applicants with the description of
roles and responsibilities of all applicants and
identification of the lead applicant; Documentary evidence
on financial solvability of the applicant; Direct
beneficiaries (current and targeted).
Working principles:
 PACT has made a provision of grant to meet one of its
key objectives of developing partnerships in well-
performing or emerging agricultural commodity value
chains.
 PACT's grant scheme follows an integrated value chain
development approach.
 PACT grants are competitive matching grants.
20
 PACT matching grants intend to help filling some of the
funding gap in the investment capital of the
beneficiaries' sub project.
 PACT follows an output-based financing system.
 Compliance with environment and social safeguards is
prerequisite to PACT's grant.
 Grant payment is not interdependent but it could delay
the payment process.

Eligibility for FPP

For Farmers group: eligible only for small grant
Registered at either District Agriculture Development
Office (DADO) or District Livestock Service Office (DLSO);
(b) Previous experience in the value chain applied.

Remarks: Mismatch between the value chain applied and

the functions of registering office (DADO/ DLSO) not
allowed (b) Mismatch between the district in which
registered and proposed subproject sites not allowed.

Cooperatives
Small grant: Registered at Division Cooperative Office/
Department of Cooperatives (DOC) pursuant to the
Cooperative Act; (b) Active (carrying out annual audit
regularly, complying with the business practices set by the
DOC as per country's legislation and carrying out financial
transactions through any financial institutions approved
by Nepal Rastra Bank (NRB); and (c) Previous experience
in the value chain applied.

Medium grant:
(a) Registered at Division Cooperative Office/ Department
of Cooperatives (DOC) pursuant to the Cooperative Act; (b)
Registered at Inland Revenue Office (c) Active (carrying
out annual audit regularly, complying with the business
practices set by the DOC as per country's legislation and
carrying out financial transactions through any financial
institutions approved by NRB); (d) Previous experience in
the value chain applied; and (e) Submission of
documentary evidence on capability to provide its financial
contribution/part.

Remarks:
Mismatch between work areas and proposed subproject
sites not allowed pursuant to applicant's Bylaws (b)
Mismatch between applicant's scopes of work/ activities
as mentioned in the By-laws and proposed sub- activities
in the proposal not allowed.

Producers Associations

Small grant:

21
Registered at District Administration Office pursuant to
Society Registration Act (b) Active (regular meeting and
carrying out financial transactions through any financial
institutions approved by NRB); and (c) Experience in the
value chain applied.

Medium Grant:
Registered at District Administration Office pursuant to
Society Registration Act (b) Active (regular meeting and
carrying out financial transactions through any financial
institutions approved by NRB); and (c) Experience in the
value chain applied

Private Firms:
Small grant: Registered at any one of the competent
authorities namely, the Company Registrar Office,
Department of Cottage and Small Industry, Departments of
the MoAD and the Department of Commerce (Legal entity);
(b) Registered at Inland Revenue Office; (c) Active
(received tax clearance certificate from the Office of Inland
Revenue as per prevailing legislation of the country) (d)
Previous experience in the value chain applied.

Medium grant: (a) Registered at any one of the competent

authorities namely, the Company Registrar Office,
Department of Cottage and Small Industry, Departments of
the MoAD and the Department of Commerce (Legal entity);
(b) Registered at Inland Revenue Office; (c) Active
(received tax clearance certificate from the Office of Inland
Revenue as per prevailing legislation of the country); (d)
Previous experience in the value chain applied; and (e)
Submission of documentary evidence on capability to
provide its financial contribution.

Remarks: Mismatch between work areas and proposed

subproject sites not allowed pursuant to applicant's
Bylaws (b) Mismatch between applicant's scopes of work/
activities as mentioned in the By-laws and proposed sub-
activities in the proposal not allowed.

Eligible proposals:

Eligibility requirement: Number of applicants:

Criteria: A Joint Application of at least three or more

applicants comprising of FPPs corresponding to the
number of applicants.

Remarks: Change or dropping of partners/applicants from

the joint proposal (PCNs) not allowed unless PACT has
specifically informed the applicant to drop any applicant in
FPP due to ineligibility for receiving PACT's grant.

22
 Eligibility requirement: Value chain (VC)

Criteria: Selection of only one of the value chains

supported by PACT

Remarks: Change of value chain applied in the PCNs not

allowed. Annex 2 provides the list of 8 VCs approved for
the small and medium grant.

Eligibility requirement: Compliance with PACT’s

environment and social safeguards:

Eligibility requirement: Adherence to the environment

and social management framework.
Remarks: Environment and social safeguard measures.

Criteria: Evidence for beneficiary's contribution: A loan

sanctions letter or any documentary evidence on financial
standing (Capability).

Remarks: Medium Grant Applicant must submit a loan

sanction letter issued by any Nepal Rastra Bank (NRB)
approved financial institutions (FIs) in the FPP. However,
small grant applicants may submit any documentary
evidence to justify that they are able to spend in full for the
purpose intended as per the FPP if they do not submit a
loan sanction letter.

Project evaluation criteria of medium grant

 Technical approach and methodology including
innovativeness and contribution to PACT's objective-
40 marks
 Business plan: 30 marks
 Sustainability prospects: 30 marks

Project evaluation criteria of small grant

 Technical approach and methodology including

innovativeness and contribution to PACT's objective-50
 Business plan -20
 Sustainability prospect: 30
Himali Project Purpose of the Grant:

 Grants are available to eligible applicants for

development of eligible mountain agribusiness activity
for the purpose of increasing socially beneficial and
environmentally friendly economic growth and
employment in mountain districts.

 A Grant is available for up to 80% of the costs of

23
 planned business development. The applicant must
contribute at least 20% of the costs as in cash,
materials, or labor. The Project will not consider micro-
business plans with costs less than $3,125. The
maximum grant is $250,000.

Grant type Total Costs Grant Business

for Business Contribution
Development

Amount % Amount %

Minimum Cost = $2,500 80 $650 20

$3,125

Level 1 Cost ≤ ≤$40,000 80 ≤$10,000 20

Grant $50,000

Level 2 Cost > $40,000 50 $10,000 50

Grant $50,000 plus 50% plus 50%
of cost of cost
over over
$50,000 $50,000

Maximum - $250,000

B. Selection Criteria

1. Eligible Applicants

i) Legally registered6 farmer groups, cooperatives, and

community organizations with business based on
mountain agricultural products including: high value
crop products, livestock products, medicinal and
aromatic plant products (MAPs), processing, value-
adding, marketing and distribution of these products
and agricultural input supplies, draft-animal transport
services, and agro-tourism;
ii) Registered Community Forestry Groups and Rangeland
Grazing Groups;
iii) Agribusiness firms registered under Nepal Company
Act, with formal contract or direct supply links with
value chain participants in high mountains;
iv) Individual business persons (legally registered with
Tax number) with least 5 employees in the business
located in the HIMALI mountain districts.
v) Staff of MOAC, the HIMALI project and its contracted
service providers, and their family members, are not
eligible.
6
Under Companies Act 2063; Cooperative Act 2048, Society Registration Act 2034; Private Firm
Registration Act 2014
24
 2. Eligible Agribusiness Activities and Facilities
The following are examples of the business activities and
facilities which will be considered for HIMALI Agribusiness
Grants:

i) Production, processing, value-adding, and manufacture

of finished mountain products;
vi) Collection, storage, grading, quality management,
packing for distribution and marketing;
vii) agro-tourism including local-produced food services,
handicrafts, and agricultural and natural resource
experience-based tourism services products;
viii) facilities for aggregating and exporting agro-
products from HIMALI mountain districts, and draft
animal services and way-station facilities;
ix) tracks, culverts, short road connections that are
essential for agribusiness development and that are co-
funded by the concerned farmer groups or agribusiness
(i.e. not general public tracks and roads);
x) small-scale irrigation and water harvesting works that
are owned, managed and maintained by registered
farmer groups;
xi) Nurseries, planting and small civil works for
community forestry and rangeland business resource
development, including for timber, grazing and MAPs.

3. Not Eligible for Grants

i) Purchase or lease of land

ii) Business operating and trading capital
iii) Speculative investment
iv) Study tours

All Agribusiness Grant applications must comprise the

following information:

1. Business or Individual Registration Legal details

1.1. Type of business structure (incorporated group,
cooperative, company, etc.)
1.2. Business Address (location and contact details)
1.3. Name(s) of responsible person(s) and contact details
1.4. Taxation File Number
1.5. Bank account details (Bank, account number for
deposits, address)
1.6. Evidence of land ownership (registration, title, lease
or user right)

2. Business Plan
2.1. Production Plan – describe the product and how it
is produced
2.1.1. Description of the products or services
2.1.2. Description of the production process, and facilities,
25
 equipment and labor involved (mandatory:
environmental management plan)
2.1.3. Sources and annual quantity of inputs and raw
materials (including procedures to ensure safety,
quality, and sustainability of supply)
2.1.4. Quantity of annual production

2.2. Marketing Plan – describe how the product is sold

2.2.1. Sales plan (history and forecast)
2.2.2. Buyers: description, location, status (confirmed or
potential)
2.2.3. Distribution process
2.2.4. Pricing plan
2.2.5. Competitive strategy (competing products and
businesses, quality management, differentiation)

2.3. Management Plan – describe how business is

managed
2.3.1. Management structure (brief description of
positions and roles, name(s) of top management)
2.3.2. Workers (description of jobs, number of full-time
and part time; mandatory: plan for employment of
local people, women and disadvantaged groups)
2.3.3. Sources of Contractors, Advisors (if required)
2.3.4. Community consultation: mandatory (at a
minimum, the applicant must hold a meeting with
people who live next to the business, or who may be
affected by the business; minutes of the meeting
signed by people attending the meeting must be
included in the application)
2.3.5. Compliance (permits or other written evidence
from planning and regulatory authorities approving
business operations and any planned civil works)

2.4. Financial Plan – describe the financial status of

the business
2.4.1. Statement of Assets (mandatory: evidence of
business premises land ownership, lease or legal
use right)
2.4.2. Statement of Liabilities
2.4.3. For proposals between $2,500 and $10,000: Basic
Cash Flow statement
2.4.4. For proposals exceeding $10,000: Profit and Loss
Account; Balance Sheet; Financial Projections (at
least 5 years)

2.5. Planned Business Development – describe the

plan and costs to develop the business
2.5.1.Describe the plan for business development
2.5.2.Specifications of the items required for the planned
development (typically these will be facilities and
equipment for Production)

26
 2.5.3.For purchase of goods and services, provide 3 price
quotations based on the specifications.
2.5.4.Cost and Finance table: list all items and costs for
items required for the planned business development,
and the source of finance for each (i.e. the business
owner, Agribusiness Grant). If the business must
borrow from a bank, a letter from the bank must be
provided.

Minimum criteria for application:

 Legal status of the firm (Farmers Group, Cooperative,
Company, Private Limited Company with evidence)
 Business Address (Location and contact numbers)
 Main responsible persons (Names, address and contact
numbers)
 VAT/PAN registration certificates
 Bank account number (Current Account at Ka class
commercial bank)
 Legal document for land ownership (if rented land the
rent period should be double of the payback period)
 Basic information form
 Information of the grant taken from other government/
non-government sector for business operation
(evidence must be submitted)
Department of Grant and Through the budget speech 2068/79 of government of
Cooperative custom Nepal, guideline was prepared.
exemption
recommendati Eligibility:
on guideline
2068 1) Registered and operating cooperatives under the
current law.

2) Decision of the General Assembly to get the grant or the

decision of the executive committee to get approval from
the following years General Assembly.

3) Project scheme, feasibility study for factory

establishment. In case of medium and large-scale grant
economic and financial analysis report should be
submitted.

4) Evidence of availability of feed, pasture and other

physical facility and market in case of agriculture farms
establishment.

5) Evidence of the land ownership or in case the factory

establish in leased land, leasing agreement for 5 years and
in case of medium and large grant leasing agreement must
be 10 and 15 years.

6) Feasibility report should provide evidence of 80% of the

27
raw materials to be used must be national originated.

7) In case of establishment of cold store at regional level,

there must be evidence of participation and commitment
of financial investment by least 25% or more
cooperatives/ cooperative unions in the regions. Required
land should be managed by the cooperatives, 50% of the
estimated cost excluding land cost shall be available as
grant.

8) For the processing of high value products like

cardamom, tea, coffee, citrus group, ginger, areca nut
(Supari), honey, Lassi, dairy products except the land cost
50 percent grant shall be provided for machinery and
equipment purchase. The grant shall not be more than 10
Lakh.

9) In case of Joint Venture Agriculture farm (including

livestock farm), except land up to 50% of the capital
investment shall be provided as grant. But the limit of the
grant per farm shall not exceed 15 Lakh.

10) In case of cottage food industry to be run by women

capital grant up to 5 Lakh shall be provided depending up
on the project scheme.

11) For the improvement of Dalits traditional occupation,

Dom, Chamar, Musahar from Terai and Kami, Sarki, Damai
from Hills/mountain operated cooperatives shall get up to
5 Lakh or depending on the local contribution 50% grant
as per business plan shall be provided.

12) If the Haruwa, Charuwa, Badi and land less women

wanted collective cultivation of seasonal or off-season
vegetable, fruits, tea, coffee, herbs, fishery and livestock
rearing maximum of 2 Lakh grant shall be provided
depending on the business plan.

13) If the grant amount is 5 Lakh or less payment shall be

done in two instalments up on the submission of bill. In
case of large investment that required Letter of Credit (LC),
25% of the total amount shall be provided in first
instalment, 50% in second instalment after the arrival of
machinery and equipment at the industry premises and
25% after installation of machinery and equipment and
operation of industry. In case of the agriculture farm 25%
as first instalment, 50% depending up on the progress
report and 25% after the completion of project. In case of
28
cold store 25% after the selection of contractor, 25% after
completion of building construction, 25% after the arrival
of machinery and equipment procurement and 25% after
the field verification.

14) Evidence for the management of contribution to be

borne by the cooperative should be submitted (audit
report, bank statement etc). No capital shall be used from
the saving of the members for industry operation.

15) In case of operation of the industry by two or more

cooperatives, decision from the concerned executive
committee and agreement of the cooperatives should be
submitted.

16) Single cooperative only can apply in one application, if

apply for two projects both will be disqualified.

17) No grant will be provided if the cooperative received

grant from other agencies for same project, but this
provision shall not be applicable in case of cold store
establishment.

18) National Cooperative Union and Cooperative

Development Bank for capacity development and
institutional strengthening program, current expenditure
grant shall be provided observing the number of members,
affiliation of national and international cooperative
institutions, institutional good governance, volume of
business, annual General Assembly and Auditing, annual
budget volume, employment generation and human
resource availability.

19) In case of providing grant to cooperative unions to

implement the program to be implemented by current
expenditure grant, it is required to submit audit report.
There must be regular General Assembly for last 2 years.
The cooperative that could not produce these documents
will be in ineligible.

20) The industry established under this grant shall not be

sold before 10 years of operation. If found sold 10%
penalty will be charged along with return of total grant
amount. This provision shall not be applicable if the
industry does not operate.

Process of grant administration:

29
 Publication of notice for grant application from the eligible
cooperatives from Department of Cooperative giving 30
days' time from the date of notice published, radio shall
also be used.

The notice should clearly mention the criteria for

application and documents to be submitted along with the
application, deadline for the application submission and
office to submit the application.

Cooperatives who wanted to apply for the grant shall

submit the application on or before the deadline to
Division Cooperative Office and Department of Cooperative
through District Agriculture Development Office in case of
non-availability of Cooperative Office in the concern
district. Central and national unions shall submit the
application directly to Department of Cooperative along
with the required documents.

Livestock Pilot program Objectives:

Production on milk  Transform the subsidy distribution policy from
Directorate production process oriented to output oriented.
and marketing-  Promote the dairy sector to become competitive,
based grant respectful, sustainable business
2073  Supply and use of the subsidy effectively and
efficiently
 Organize the small holder milk producer in formal
market
 Assist to become self-sufficient in milk as per
commitment done by the Ministry
 Efficient implementation of milk production and
marketing pilot subsidy program
Criteria:
 Cooperative collecting and processing of its own milk
or supplying to dairy industries and marketing of milk
and milk products
 Annual milk transaction of 1000 liters in Terai, 500
liter in Hill and 300 liters in high mountain districts.
 Provide the inventory of sales of milk in last fiscal year
 Member farmers of the cooperative should have done
the livestock insurance
 Implementation of bio-security in the farms who are
the member of cooperatives
 Milk transaction done by the cooperative should meet
the minimum standard of milk quality
 Concern cooperative should prepare subsidy providing
criteria to all share members

Cooperative should submit the bank evidence of each

farmer who receive the subsidy.
30
 Monitoring should be done by concerned DLSO, regional
directorate and department of livestock services.
Milking Parlor Objectives:
establishment  Support for clean and hygienic milk production
and  Transform the dairy business to competitive
implementatio promoting low cost milk production of the commercial
n guideline farmers
2073  Establishment of pilot milk parlor in feasible farm and
support transfer of parlor technology
 Meet the milk mission of the Ministry of Livestock and
Poulty Development
 Efficient execution of milking parlor as per the milking
parlor establishment program of Government of Nepal.

Criteria:
 Farms rearing more than 50 lactating cattle/ buffaloes
 Insured all the dairy animals in the farm
 Should have physical facility of in and out of the
animals or have coast estimated for physical facilities
 Registered in concern government office, have PAN
number, tax clearance certificate and not get any legal
action
 Possess commitment to bear 50% of the total cost for
establishing milking parlor
 Fully meet the bio-security in the farm

Monitoring should be done by concern DLSO, regional

directorate and department of livestock services.
Livestock feed Objectives:
allowance Additional nourishment during the delivery of animal,
program for maintain steady milk production throughout the lactation,
newly reduce the mortality rate of calves, and gain appropriate
delivered weight and quality
cattle and Reduce the time difference between the lactation and
buffalo 2073 reduce cost of milk production.

Process:
 Get the application as per specified format
 The application should be submitted by the DLSO to
District Livestock Action Team (LACT)
 Provide NRs. 2500/farmer to 100 farmers on priority
basis (priority will be given to the poor farmer)

Monitoring should be done by concerned DLSO, regional

directorate and department of livestock services.
Establishment  Increase production and productivity of local
and operation cattle/buffalo by the distribution of pedigree registered
of resource based improved cattle/buffalo bull by cross breeding
center by technology
breeding bull  Supply of improved cattle/buffalo bull from the
rearing approved resource centers
guideline 2073  Discourage discarding male calves and protect good
31
 breed type progeny of the dam
 Implement the breeding bull rearing resource center as
per the program launched by the government of Nepal.
Criteria:
 Should bear 50% of total estimated cost of the farm
operation by the concerned farm.
 Should have physical facility to rear at least 25 breeding
bulls
 Should have adequate feed to feed the animals in the
farm throughout the year

The calves to be purchased should meet following criteria:

 Cattle/buffalo purchased from improved resource
center.
 Certificate of the calve born out of AI
 Milk productivity of the cattle dam should be at least
3000 liter and buffalo at least 2000 liter per lactation
 No any deformity related to breeding

Monitoring should be done by concerne DLSO, regional

directorate and department of livestock services.
Buffalo heifer Objectives:
rearing  Protection and promotion of high yielding local and
guideline 2073 improved buffalo
Support empowering single women, poor, Dalits and
landless through livestock rearing
Distribution of Objectives:
milking  Production of clean and hygienic milk through
machine in mechanization of commercial cattle/buffalo farms
grant 2071  Support to reduce the cost of milk production reducing
human labor in milking
 Promote Good Husbandry Practice and bio-security
technology in commercial dairy farming
 Assure complete milking
 Support to reduce the mastitis by improving sanitation

Process:
 Formulate the central level committee:
 Program Director-Livestock Production Directorate-
Coordinator
 Chief: Central Cattle and Buffalo Promotion Office-
member
 Chairperson/representative Central Dairy Cooperative
Association of Nepal- Member
 Officer representation- Department of Livestock
Services
 Focal Person (Senior Livestock Development Officer)-
Livestock Production Directorate.
 Call for proposal from eligible commercial dairy farms
(farms that are rearing 20 or more dairy
cattle/buffalo).

32
  The proposal should have cost estimate as prescribed
in the format (annex:3) and submitted to the concerned
DLSO
 District Livestock Action team (LACT) will evaluate/
assess the proposals and after the field verification
forward to the Livestock Production Directorate.
 The Technical Team at Livestock Production
Directorate shall invite experts (not more than 2)
 The central level committee shall formulate other five-
member Technical Committee under the one subject
matter specialist. This committee will formulate the
criteria for milking machine distribution and submit to
the central level committee.
 The central level committee shall monitor the
recommendation from LAT and review with feedback
 Within 60 days of approval for purchasing milking
machine, concern DLSO should forward necessary
documents for 50% subsidy
 The private farm, company, cooperative or individual
farmers should purchase the machine in competitive
price (least price quotation) and submit the bill to
DLSO for release of 50% subsidy. The Livestock
Production Directorate will transfer the contracted
amount directly to farms account open in Rastiya
Vanijya Bank and notify the concerned DLSO.
Criteria:
 The farm should have at least 20 lactating
cattle/buffalo (number may include lactating and
pregnant)
 Should maintain Good Husbandry Practice and Bio-
security and good management
 Should assure that the milking machine used as per
objective
 The body Condition Score, BCS of the farm animals
should get 3 score
 Teat dipping practice should be done in entire lactating
dairy animal
Monitoring should be done by the concerned DLSO,
regional directorate and department of livestock services.

Liquid Objective
Nitrogen Plant
operation,  Production, execution and supply management of liquid
production nitrogen plant in partnership of NGOs, Cooperative or
and supply private agencies to support AI for the production of
management crossbred calves.
in partnership  Expansion of AI services and increase employment
guideline 2071 opportunity through encouraging well trained AI
technician from NGO, Cooperatives or private agency by
easy access to liquid nitrogen.
 Encourage NGO, Cooperatives or private agencies in
management of AI services and allied equipment and
33
 minimize the government involvement
 Increase production and productivity of milk through
expansion of AI services
Criteria:

 Equal opportunity for NGO, Cooperatives or private

agencies
 Interested agencies should possess and assure
adequate technical and management capabilities to
operate, production and supply of liquid nitrogen.
 The agencies should have strong financial capability
 Should have capability to store and supply
management as per requirement
 Can use entire tanker and container located at Central
Livestock Breeding Center Pokhara after appropriate
maintenance for storage and supply by taking
consensus of the committee
 Both Technical and Financial Proposals should be
evaluated and decided to approve proposal fully or
partially.
 Government of Nepal should manage required roads,
electricity and water for Liquid Nitrogen Plant
Operation. Selected company should manage
alternative power supply when load shedding.
 In case of new plant operation, required physical
infrastructure will be the responsibility of Government
of Nepal.
 There is a Central Liquid Nitrogen Plant Operation,
Execution, Production and Supply Management
Program Coordination Committee. Director General of
DLS will be coordinator and chief of National Livestock
Breeding Center member secretary.
 There will be a service execution process
subcommittee and coordinator of the committee will be
chief of National Livestock Breeding Center and
member secretary will be focal officer of concern
program, directorate of livestock production.
 There will be a District Liquid Nitrogen Coordination
Committee. Coordinator of the committee will be
concerned DLSO and focal person in DLSO will be the
member secretary.
 There will be a Community Livestock Breeding
Committee at local level. Coordinator of the committee
will be chairperson/secretary/treasurer of the partner
organization and selected representative of AI
practicenor- member secretary
Monitoring should be done by concerned DLSO, regional
directorate and department of livestock services.
Central Cattle Improved Objectives:
and Buffalo Cattle/Buffalo
Promotion resource  Increase access to productive and breeding eligible
Office center livestock as per the geographical and climatic
34
development suitability.
program  Assist to increase milk production and productivity by
execution increasing improved animal.
guideline (2nd  Encourage the farmers to practice process of Good
amendment) Husbandry Practice (GHP) for hygienic milk production
2073 and transfer the milk production occupation as
commercial practice.
Execution:

 To be a resource center, there must of 100 mature

cattle if 50 mature buffalo. In case of extensive/super
resource center there should be at least 500 mature
cattle or 300 matured buffalo. Local farmers, farmers
group, cooperatives, private farms can be
accommodated for the purpose. Extensive/support
resource center shall accommodate 2-3 districts.
 For the initial 3 years subsidy will be provided for
physical structure development, renovation, machine,
equipment. With the involvement of concerned DLSO
and other stakeholders' resource center augmenting
good management practice, the resource center will be
made self-sustained within 5 years.
 Coordination will be done with the financial
institutions to manage fianancé and insurance for the
establishment of resources center.
 Maintain herd book and update it regularly.

Central Cattle and Buffalo Promotion Office will have

following tasks:

Interaction and orientation, update data and develop

inventory, monitoring, supervision and reporting, third
party monitoring, promotional program (replacement of
plastic utensils) in handling of milk, distribution of UMMB
and computer-based inventory system development.

DLSO will have following tasks:

Notice publishing, partner selection, baseline survey and

contract, distribution of subsidy as prescribed in the
guideline, animal health and production package,
facilitator service, inventory management, monitoring,
supervision and report production, and establishment of
model livestock farm executing Good Husbandry Practice
and Bio-security.

Fund raising:

Subsidy/grant from Government of Nepal, fund from the

development partners, I/NGOs, MPCs, FUC, local

35
 government, stakeholders, interest out of income.

Monitoring should be done by concerned DLSO, regional

directorate and department of livestock services.

Directorate of Milk Analyzer Objectives:

Livestock and Distribution Support for the production of hygienic and clean milk
Poultry Guideline 2070 production
Marketing Support farmers to get appropriate price per unit of milk
Implement scientific system in procurement and
distribution of milk

Process:
 35 days notice publication for request for proposal
in national daily newspaper or web site
 Submit the proposal in specified formation with
recommendation letter from DLSO or DMPCU
 Specification of milk analyzer shall be prepared in
close coordination with CDCAN.
Documents to be submitted
 Recommendation from the concerned DLSO or
DMPCU
 Registration certificate, VAT or PAN certificate, last
year's audit report, tax clearance certificate
 Certificate of collecting at least 1000-liter milk per
day
 Have chilling vat and Land ownership certificate of
land under chilling vat establishment
 Declaration that the milk analyzer is not received
from other agencies in the past.

Selection committee:
 Senior Officer as recommended by program
director- chairperson
 Livestock Development Officer- Central Livestock
and Poultry Marketing Directorate- member
 Planning officer of Central Livestock and Poultry
Marketing Directorate- member
 Representative from CDCAN- member
 Officer representative- DLS

Monitoring and supervision to be done by concerned

DMPCU, DLSO, CDCAN, LSC/LSSC, regional livestock
development directorate and Directorate of Livestock and
Poultry Marketing

Some I/NGOs and bi lateral projects are also operational in providing support and subsidy. These include:

 Helvetas
 Practical Action
 HEIFER International
 Plan International
36
 RRN
 Chemonics International

Development partners

 UNDP-MEDEP
 USAID
 SAMARTH
 Unnati

CHAPTER 4 RELEVANCY OF THE SUBSIDY AND SUPPORT

4.1 General

Field survey was done interviewing the real subsidy/support recipient. Support and subsidy provided
from FY 2068/79 to 2072/73 in terms of cash and kinds and provided either to individual or to
institutional farmers was covered by the study. It was revealed that institutional support was to the
registered dairy farms, industries and marketing agencies received cash and individual received kind
support. A total of 10 indicators were designed to assess the relevancy and the conclusion of the
relevancy was drawn based on the judgement of the recipients and statistical tool.

4.2 Coverage of the Subsidy/support

It was planned to cover 84 subsidy/support receivers and total coverage was also same i.e. 84 and these
receivers were classified as the receivers receiving Rs. 1 lakh or less, Rs. 1 lakh to 5 lakh, Rs. 5 lakhs to 10
lakh and more than Rs. 10 lakhs. Since there were very less receiver under category Rs. 5-10 lakh, it was
compensated by more than Rs. 10 lakh receivers. Similar was the case with in-kind receivers and they
were compensated by cash receivers.
37
Table: 4.1 Quantitative Survey sample coverage
Cash Kinds Total Total
Subsidy/support category Planned Actual Planned Actual Planned Actual

1 Lakh or less 30 37 - - 30 37

1- 5 Lakh 14 16 - - 14 16

5-10 Lakh 14 5 - - 14 5

More than 10 Lakh 10 17 - - 10 17

Total 68 75 16 9 84 84
Source: Field Survey, 2018

Qualitative survey sample were covered as planned, more case studies were collected to have more
précised result.

Table: 4.2 Qualitative survey sample coverage

Category Planned Actual
FGD 16 16
KII 80 80
Case studies 8 13
Total 104 109
Source: Field Survey, 2018

4.3 Number of respondents by sex

A total of 84 subsidy/support receivers were surveyed. Out of them 83.33 percent were male and 16.67
percent were female.

Table: 4.3 Respondents by Sex

Individual Institutional Total Percent
SN Sex Number Percent Number Percent Number Percent
1 Male 6 66.67 64 85.33 70 83.33
2 Female 3 33.33 11 14.67 14 16.67
Total 9 100.00 75 100.00 84 100.00
Source: Field Survey, 2018

4.4 Type of support taken by the respondents

It was found that the respondents received subsidy, grant, support and kinds. Based on the information
collected form the beneficiaries, 89.9 percent respondents received institutional and 10.71 percent
received individual subsidy/support. It was learnt that 51.19 percent was subsidy, 39.29 percent support
and 4.76 percent each received grant and in-kind supports.

Table: 4.4 Type of support taken by the respondents

38
 Individual Institutional Total
SN Type Number Percent Number Percent Number Percent
1 Subsidy 7 8.33 36 42.86 43 51.19
2 Grant 0 0.00 4 4.76 4 4.76
3 Support 2 2.38 31 36.90 33 39.29
4 Kinds 0 0.00 4 4.76 4 4.76
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

4.5 Subsidy/support providing agencies and type

Different agencies provided support and subsidy to the dairy sector development including Department
of Livestock Services (DLS), National Dairy Development Board (NDDB), PACT, HIMALI project, NAFSP,
PAF, I/NGOs and others. Out of the recipients 36.9 percent received from NDDB, 27.38 percent from DLS,
14.29 percent from PACT, 9.52 percent from HIMALI. Other subsidy/support providers were NAFSP, PAF,
I/NGOs (Oxfam, UNNATI, RRN) and others.

Table: 4.5 Support and subsidy providing agencies and type

Individual Institutional Total

SN Agency Number Percent Number Percent Number Percent
1 DLS 1 1.19 22 26.19 23 27.38
2 PACT 0 0.00 12 14.29 12 14.29
3 NDDB 2 2.38 29 34.52 31 36.90
4 I/NGO 0 0.00 2 2.38 2 2.38
5 HIMALI Project 4 4.76 4 4.76 8 9.52
6 NAFSP 0 0.00 1 1.19 1 1.19
7 PAF 1 1.19 1 1.19 2 2.38
8 Other 1 1.19 4 4.76 5 5.95
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 1 Surveyed subsidy/ support provider's recipients and type(Percent receiver)

39
4.6 Type of subsidy/support received by the recipients

It was found that 89.29 percent respondents received cash and 10.71 percent received in-kind. Those
who received in-kinds were institutional receivers. The in-kind support comprised of the dairy
machinery equipment, forage saplings, seeds, water tank and others.

Table: 4.6 Type of subsidy and support received by the recipient

Individual Institutional Total
SN Type Total % Total % N %
1 Kind 0 0.00 9 10.71 9 10.71
2 Cash 9 10.71 66 78.57 75 89.29
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

4.7 Purpose of the support and subsidy

From the survey it was evident that 38.1 percent subsidy/support was provided for dairy animal farming,
33.33 percent for dairy equipment, 11.9 percent to dairy machinery and 9.52 percent for dairy animal
shed improvement. Out of dairy animal farming 29.76 percent was institutional and 8.33 percent was
individual, while dairy equipment and machinery was provided only to institutional recipient. Dairy
machinery included the chilling vat and its accessories, milk filling machine, Khowa machine and
equipment included milk analyzer, generator, cream separator etc.

Table: 4.7 Purpose of the support and subsidy

Individual Institutional Total

SN Purpose Number Percent Number Percent Number Percent
1 Dairy animal farming 7 8.33 25 29.76 32 38.10
2 Dairy Equipment 0 0.00 28 33.33 28 33.33
3 Dairy materials, utensils 0 0.00 4 4.76 4 4.76
4 Dairy Machinery 0 0.00 10 11.90 10 11.90
5 Shed improvement 2 2.38 6 7.14 8 9.52
6 Dairy animal purchase 0 0.00 2 2.38 2 2.38
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

40
Fig: 2 Purpose of subsidy/ support (Percent receiver)

4.8 Usefulness of the support and subsidy

For the question was the subsidy/ support useful to you, cent percent respondents affirmatively
responded.

Table: 4.8 Whether the subsidy/support was useful to the recipient or not

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 9 10.71 75 89.29 84 100.00
2 No 0 0.00 0 0.00 0 0.00
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

4.9 Relevancy of the support and subsidy

In overall, 70.24 percent respondents said that the subsidy/support was very relevant and 29.76 percent
said relevant.

Table: 4.9 Relevancy of the support/ subsidy

Individual Institutional Total

SN Ranking Number Percent Number Percent Number Percent
1 Very relevant 8 88.89 51 68 59 70.24
2 Relevant 1 11.11 24 32 25 29.76
Total 9 100.00 75 100 84 100.00
Source: Field Survey, 2018

41
Fig: 3 Relevancy of subsidy/ support as felt by recipients (Percent)

4.10 Presence of guideline for providing support and subsidy

Based on the field survey, 97.62 percent respondents responded that there was guideline and 2.38
percent said no which is insignificant. However, it calls for any subsidy/support provider to educate the
recipient about the guideline.

Table: 4.10 Guideline in place on providing subsidy/support

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 8 9.52 74 88.10 82 97.62
2 No 1 1.19 1 1.19 2 2.38
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

4.11 Clarity on the guideline for providing support and subsidy

Program planning/proposal writing heading under the guideline was clear and enough to 77.33 percent
institutional and 88.89 percent individual subsidy/support recipients. Similarly, program implementation
heading under the guideline was clear to 76.0 percent institutional and 88.89 percent individual recipient
while program implementation was enough only to 73.33 percent institutional and 88.89 percent
individual recipient.

Table: 4.11 Clarity on the different aspects of the guideline to the recipient

Personal Institutional Total

Particulars Yes Percent No Percent Total Yes Percent No Percent Yes Percent No Percent
Program
planning/proposal
writing guideline is
clear 8 88.89 1 11.11 9 58 87.88 17 25.76 66 78.57 18 21.43
Program
planning/proposal
writing guideline
enough 8 88.89 1 11.11 9 58 87.88 17 25.76 66 78.57 18 21.43
Program
implementation 8 88.89 1 11.11 9 57 87.69 18 27.69 65 77.38 19 22.62

42
 Personal Institutional Total
Particulars Yes Percent No Percent Total Yes Percent No Percent Yes Percent No Percent
guideline clear
Program
implementation
guideline enough 8 88.89 1 11.11 9 55 87.30 20 31.75 63 75.00 21 25.00

Source: Field Survey, 2018

Key informants and the respondents who received subsidy/support particularly from HIMALI and PACT
project revealed that the guideline and the proposal format were very complicated and the farmers and
their organization did not understand. For the purpose, the dairy farms/industries took support from
professional consultant paying handsome fee for proposal writing. Thus, this was the first stage of
screening of the applicants and possibility of selection financially strong institution was increased. These
institutions have influential capacity to the policy and implementation level authorities. After the
approval of the project, the support receiver did not consult with the consultant who wrote the proposal.
Hence, there was big difference between the proposal and plan to implementation. While other support
providers' guideline and proposal format were reported as bit understandable.

Fig: 4 Clarity of the guideline prepared by subsidy/ support providers to receipients (Percent)

CHAPTER 5 EFFICIENCY OF DAIRY SECTOR SUPPORT AND SUBSIDY

A total of 25 indicators were designed to assess the efficiency and the conclusion of the efficiency was
gauged based on the judgement of the recipients and statistical tool.

5.1 Amount received by purpose and type of recipients

From the field survey, it was confirmed that a total of NRs. 56,030,558 cash were received by the
institutional and Rs. 6,475,920 cash was received by the individual recipients.

Table: 5.1 Total amount, purpose and type of the grant/subsidy/support received
Individual Institutional Total
SN Type Cash % Kind % Cash % Kind % Cash total Kind total
Dairy animal
1 husbandry 1015000 1.81 0 0.00 26,575,558 47.43 3,975,918 7.10 27,590,558 3,975,918

43
 Individual Institutional Total
SN Type Cash % Kind % Cash % Kind % Cash total Kind total
Milk
2 Collection 0 0.00 0 0.00 8,235,000 14.70 1,700,000 3.03 8,235,000 1,700,000
3 Milk Chilling 0 0.00 0 0.00 6,150,000 10.98 500,002 0.89 6,150,000 500,002
Dairy
4 Processing 0 0.00 100000 1.54 4,100,000 7.32 200,000 0.36 4,100,000 300,000
Dairy
5 Marketing 0 0.00 0 0.00 925,000 1.65 0 0.00 925,000 0
Others (Shed
6 improvement) 0 0.00 0 0.00 9,030,000 16.12 0 0.00 9,030,000 0
Total 1015000 1.81 100000 1.54 55,015,558 98.19 6,375,920 11.38 56,030,558 6,475,920
Source: Field Survey, 2018

Maximum amount was provided for dairy animal husbandry (NRs. 27,590,558) and least was provided in
dairy marketing (NRs.925,000).

Fig: 5 Total amount, purpose and type of subsidy/ support(Percent)

5.2 Operational status of program/project under subsidy/support

From the survey data, only 80.95 percent project/program were operational while 19.05 percent were
not. Out of 80.95 percent operational, 71.43 percent were institutional and 9.52 percent were individual
and most non-operational were large subsidy/support receivers.

Table: 5.2 Whether or not the program/project under grant/subsidy/support is operational at

present

Total
Individual Institutional
SN Particulars Number Percent Number Percent Number Percent
1 Yes 8 9.52 60 71.43 68 80.95
2 No 1 1.19 15 17.86 16 19.05

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 Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 6 Operational status and following ToR under subsidy/ support program (Percent)

5.3 Status of following terms and condition of program/project under subsidy/support

From the survey, it was confirmed that 98.81 percent subsidy/support program/projects followed the
terms and condition mentioned in the contract and 1.19 percent did not follow.

Table: 5.3 Whether or not the Terms and Conditions mentioned in the contract followed
Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Yes 9 10.71 74 88.10 83 98.81
2 No 0 0.00 1 1.19 1 1.19
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

5.4 Clear accounting system in the recipient

For the question whether or not the recipient has clear accounting system, 58.33 percent said yes and
41.67 percent said no. Thus, it was clear that considerable number of subsidy/support receiver have no
clear accounting system indicating possibility on misuse of fund.

Table: 5.4 Whether or not the recipient has clear accounting (income and expenditure) system at
hand

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 4 4.76 45 53.57 49 58.33
2 No 5 5.95 30 35.71 35 41.67
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

45
Fig: 7 Subsidy/support receiver's Financial Management Status (Percent)

5.5 Recipients following the current government accounting system

For the question whether or not the recipient followed the current government accounting system, 85.71
percent answered affirmatively and 14.29 percent answered negatively.

Table: 5.5 Whether or not the recipient followed current government accounting system
Total
Individual Institutional
SN Particulars Number Percent Number Percent Number Percent
1 Yes 3 5.00 39 79.59 42 85.71
2 No 1 1.67 6 12.24 7 14.29
Total 4 6.67 45 91.84 49 100.00
Source: Field Survey, 2018

5.6 Status of completing the project by contracted amount

It was learnt that 78.57 percent recipient were able to complete the project/program by the contracted
amount while 21.43 percent could not. The deficit amount was borne by the institutional fund and taking
loan.

Table: 5.6 Whether or not the program/project completed by the contracted amount
Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Yes 7 8.33 59 70.24 66 78.57
2 No 2 2.38 16 19.05 18 21.43
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

5.7 Status of completing the project in planned time frame

It was confirmed from the field survey that; 86.9 percent recipients completed all the activities mentioned
in the contract in stipulated time and only 13.10 percent could not.

46
Table: 5.7 Activities mentioned in the contract completed in stipulated time

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 8 9.52 65 77.38 73 86.90
2 No 1 1.19 10 11.90 11 13.10
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 8 Satus of timely completion of activities mentioned in the contract (Percent)

5.8 Documentation of the reports and reasons for not completing the project in time

Only 51.19 percent recipients had clear and updated write-ups for not completing the planned activities
in time while 48.81 percent had no such records. The reasons for non-recording were negligence,
innocence and poor recording system.

Table: 5.8 Clear and updated write-up on reasons for not timely completing the program

Particulars Individual Institutional Total

SN Number Percent Number Percent Number Percent
1 Yes 5 5.95 38 45.24 43 51.19
2 No 4 4.76 37 44.05 41 48.81
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

5.9 Amendments done in the original planned activities

From the survey, it was conformed that 79.76 percent recipient was not required to amend and
implemented activities as planned, while 20.24 percent amended the original plan.

Table: 5.9 Whether or not there was made any amendments in the activities mentioned in the
original contract
SN Particulars Individual Institutional Total

47
 Number Percent Number Percent Number Percent
1 Yes 0 0.00 17 20.24 17 20.24
2 No 9 10.71 58 69.05 67 79.76
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

The amendments were due to changes in technology, non-availability of the inputs and services,
budgetary constraints (price increased) and poor planning and budgeting and non-involvement of owner
during project proposal writing and decreased budget while negotiation.

5.10 Modality of subsidy/support project implementation

This question was only applicable to the institutional recipient. It was confirmed that 88.0 percent
recipient implemented the project activities of their own, 5.33 percent distributed to the members to
implement the mentioned activities and 6.67 percent provided credit to the members for planned activity.

Table: 5.10 Modality utilized to implement program

Institutional
SN Particulars Total Percent
1 Implemented of own 66 88.00
2 Distribute to members 4 5.33
3 Credit to member 5 6.67
Total 75 100
Source: Field Survey, 2018

5.11 Easiness of getting instalments to the recipients

For the question whether or not the recipient received the instalment easily, 79.76 percent said they
received easily while 20.24 percent said it was not easy to get.

Table: 5.11 Whether or not the recipient received the instalments easily

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 9 10.71 58 69.05 67 79.76
2 No 0 0.00 17 20.24 17 20.24
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

48
Fig: 9 Easiness of getting installment by the recipients under subsidy/ support program (Percent)

The recipients complained that there was unnecessary hassle while getting the instalment particularly
asking of VAT bill, tax deduction in every payment even with the wage labor, compulsion to submit the
bill even when the bill is not possible viz. training in rural area where the shop keepers do not have bill,
which encouraged submission of fake bill.

5.12 Rating of the complications faced by the recipients to get instalment

Out of those who said that they did not receive the instalment easily, 41.18 percent each mentioned that
the process was very complicated and little complicated while 17.65 percent said expensive. It was
expensive because they had to visit to the providers' office many times.

Table: 5.12 Rating of the complications faced by the recipients to receive instalments

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Very complicated 0 0.00 7 41.18 7 41.18
2 Little Complicated 0 0.00 7 41.18 7 41.18
3 Expensive 0 0.00 3 17.65 3 17.65
Total 0 0.00 17 100.00 17 100.00
Source: Field Survey, 2018

While consulting with the support providers, they said that the receiver did not report properly and not
submitted the required documents viz. progress as plan, noncompliance with activity and expenditure,
VAT bill of inputs purchase.

49
 Fig: 10 Rating of the complecations faced by the receipients to receive installment (Percent)

5.13 Recipient friendliness of the subsidy/support

According to the survey, the subsidy/support was very recipient friendly for 61.9 percent while it was
little friendly to 38.1 percent recipient.

Table: 5.13 Opinion of the recipients on the friendliness of the grant/subsidy/support program

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Little Friendly 8 9.52 24 28.57 32 38.10
2 Very friendly 1 1.19 51 60.71 52 61.90
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

5.14 Involvement of the recipients in program monitoring and evaluation

It was confirmed that 94.05 percent recipients were involved in monitoring and evaluation of the projects
and only 5.95 percent were not involved.

Table: 5.14 Whether or not the recipient involved in monitoring and evaluation of the program

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1Yes 7 8.33 72 85.71 79 94.05
2No 2 2.38 3 3.57 5 5.95
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

5.15 Direct and indirect employments generated by the subsidy/support

0-2 direct employment was generated by 35.71 percent, while 3-5 direct employment was generated by
25 percent, 6-10 employment was generated by 17.86 percent recipients, and more than 11 employment
was generated by 21.43 percent.

Table: 5.15 Direct and indirect employments created out of the program
Individual Institutional Total
No of
employment Direct Percent Direct Percent Direct Percent Direct Percent Direct Percent Indirect Percent
50
0-2 6 66.67 7 77.78 24 32 18 24 30 35.71 25 29.76
3-5 3 33.33 0 0 18 24 14 18.67 21 25.00 14 16.67
6-10 0 0 0 0 15 20 8 10.67 15 17.86 8 9.52
11 and
above 0 0 2 22.22 18 24 35 46.67 18 21.43 37 44.05
Total 9 100 9 100 75 100 75 100 84 100.00 84 100.00
Source: Field Survey, 2018

Fig: 11 Direct and indirect employments created out of subsidy/ supportprogram (Percent)

In most of the cases of large subsidy/support, the employment is more during project period i.e.
until the support exists, there after started declining and in few cases project/business ceased
after the closure of external funding.

5.16 Efficiency of subsidy/support program as mentioned by recipients

The recipients were requested to rank the efficiency of the subsidy/support program. Out of
total recipients' 50 percent mentioned efficient, 38.1 percent mentioned very efficient and 11.9
percent mentioned not efficient.

Table: 5.16 Ranking of the efficiency of the subsidy/support program by the recipient

Individual Institutional Total

SN Efficiency Number Percent Number Percent Number Percent

1 Very efficient 0 0 32 42.67 32 38.10
2 Not efficient 0 0 10 13.33 10 11.90
3 Efficient 9 100 33 44.00 42 50.00
Total 9 100 75 100.00 84 100.00
51
Source: Field Survey, 2018

Fig: 12 Ranking of the efficiency of subsidy/ supportby receiver (Percent)

CHAPTER 6 EFFECTIVENESS OF DAIRY SECTOR SUPPORT AND SUBSIDY

A total of 6 indicators were designed to assess the effectiveness and the conclusion of the effectiveness
was drawn out based on the judgement of the recipients using statistical tool.

6.1 Improvements in dairy sector by the subsidy/support

Different improvements were observed in the dairy sector due to the subsidy and support. Improved milk
marketing was felt by 38.1 percent recipients while 32.14 percent felt milk quality have been improved,

52
27.38 percent recipients felt better dairy animal management and 2.38 percent reported that
improvements in sheds for keeping dairy animal.

Table: 6.1 Observed improvement by recipient in dairy sector due to grant/subsidy/support

Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
Better dairy animal
1 management 1 1.19 22 26.19 23 27.38
2 Improved milk marketing 3 3.57 29 34.52 32 38.10
3 Milk quality improvement 5 5.95 22 26.19 27 32.14
Improvement in Shed
4 management 0 0.00 2 2.38 2 2.38
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 13 Improvements observed by the receipient in dairy sector due to subsidy/ support(Percent)

6.2 Changes in dairy sector by the subsidy/support

For the question what changes are observed in dairy sector, recipients responded differently. Change
observed by 54.76 percent recipients was increase in livestock number, while increased quantity of milk
production was for 14.29 percent, increase productivity of animals and improve in composition of dairy
animals was for each 10.71 percent recipient.

Table: 6.2 Changes in dairy sector due to this subsidy/ support as perceived by recipient

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
Increase quantity of
1 milk production 2 2.38 10 11.90 12 14.29
2 Increase in livestock 6 7.14 40 47.62 46 54.76
53
 Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
number
Improve on
composition of dairy
animals (more lactating
3 animals) 1 1.19 8 9.52 9 10.71
Increase productivity of
4 animals 0 0.00 9 10.71 9 10.71
Increase household
5 income 0 0.00 3 3.57 3 3.57
6 Increase consumers 0 0.00 5 5.95 5 5.95
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 14 Changes in dairy sector due to subsidy/ supportas perceived by recipients (Percent)

Other social changes were also observed during the field survey, according to the Key informants which
were increased sanitation (personal, domestic and environmental), increased access to health care and
treatment, increased awareness, income generation among the women and economic self-reliance,
utilization of modern materials and equipment, increased social status of women, formation of women
cooperatives and development of women entrepreneurship, increased household income and increased
access to quality child education.

6.3 Changes in life style of the people due to subsidy/support

The support and subsidy were able to change the life style of the people in the project areas. It was
confirmed by 83.33 percent recipient while 16.67 percent recipients had not observed the changes in life
style of the people.

Table: 6.3 Changes occurred in the lifestyle of the grant/subsidy/support receivers

Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent

54
 1 Yes 8 9.52 62 73.81 70 83.33
2 No 1 1.19 13 15.48 14 16.67
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

6.4 Aspects changes in life style of the people due to subsidy/support

Though different aspects of the life style change were mentioned, 77.14 percent agreed that family
income has increased, 14.29 percent mentioned increased in the property and 8.57 percent said
improvement in the education.

Table: 6.4 Aspects of lifestyle changes among the recipients due to subsidy/support
Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Increase family income 7 8.75 47 67.14 54 77.14
Improvement in Child
2 education 0 0.00 6 8.57 6 8.57
3 Property increased 1 1.25 9 12.86 10 14.29
Total 8 10.00 62 88.57 70 100.00
Source: Field Survey, 2018

Fig: 15 Areas of changes among the recippients due to subsidy/ support(Percent)

6.5 Opportunities created due to subsidy/support

Different opportunities were created by the support and subsidy in dairy sector in the survey districts.
Out of survey respondents' 39.29 percent observed expansion of milk and milk products market, 32.14
percent observed increased number of dairy animals, 17.86 percent observed dairy product
diversification and 7.14 percent observed diversification in the gender role.

Table: 6.5 Opportunities created due to this subsidy/support as mentioned by the recipient

Total
Individual Institutional
SN Particulars Number Percent Number Percent Number Percent

55
 Total
Individual Institutional
SN Particulars Number Percent Number Percent Number Percent
Increasing the number of
1 dairy animals 7 8.33 20 23.81 27 32.14
Market expansion milk and
2 milk products 1 1.19 32 38.10 33 39.29
Dairy product
3 diversification 0 0.00 15 17.86 15 17.86
Milk and milk product
4 quality enhancement 0 0.00 2 2.38 2 2.38
5 Diversifying the gender role 1 1.19 5 5.95 6 7.14
6 Environment protection 0 0.00 1 1.19 1 1.19
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 16 Opportunities created due to subsidy/ support as opinioned by receiver (Percent)

According to key informants, there has been increased technical and managerial capacity of dairy farmer;
increased financial, institutional and marketing capacity of the dairy farmers institutions; increased
income, employment generated and no need for foreign employment. Other opportunities included
commercial orientation towards milk production at rural areas, women empowerment and
diversification of women role, comfortable livelihood by employment generation at local level, increased
number of high productivity dairy animals, shed improvement and expansion of dairy industries,
modernization and product diversification.

Though projects like HIMALI and PACT tried to integrate the production and marketing blending the
policy of value chain, the value chain development was found only for proposal submission and wining
because after winning the project, they started to work separately without any coordination. Value chain
actors started to consider others as competitors not the supporter and did not share the information.
There is not code of conduct between the value chain actors, very limited meeting and started to blame
each other. Until the continuation of support they submit the joint report linking together but stop
relation after the cease of support.

56
6.6 Effectiveness of the subsidy/support program

The effectiveness of the dairy sector subsidy and support program was graded in different categories viz:
very effective, effective, not effective. Rank as very effective was mentioned by 28.57 percent recipients,
47.62 percent ranked to effective and 23.81 percent ranked to not effective.

Table: 6.6 Effectiveness of this grant/subsidy/support program as perceived by recipients

Individual Institutional Total

SN Ranks Number Percent Number Percent Number Percent
1 Very effective 1 1.19 23 30.67 24 28.57
2 Effective 8 9.52 32 42.67 40 47.62
3 Not effective 0 0.00 20 26.67 20 23.81
Total 9 10.71 75 100.00 84 100.00
Source: Field Survey, 2018

Fig: 17 Effectiveness of subsidy/ supportas perceived by recipients (Percent)

6.7 Few case studies

a) SUCCESS CASES

Case: 1 Setidevi Milk Producer's Cooperative- Dhulikhel-3, Rabiopi, Kabre

Background:

The MPCS was established in 2050 organizing 26 members with share capital NRs. 2600. Farmers were
producing 2/3 liter of milk that do not have market to sale. In demand of the share members, cooperative
decided started to collect small amount of milk produced by the farmers and sale.

57
In the year 2060 as per liberalization in cooperative sector, cooperative decided to operate saving and
credit on top of milk collection and sale and increase share amount by increasing share members.
Currently, there are 824 share members and share capital is NRs. 1,01,43, 400 and cooperative is
providing loan to the members up to NRs. 50,000 for cow and Rs. 80,000 for buffalo purchase and up to
Rs. 5 Lakh for farmers who are interested to commercial dairy farming at interest rate 11-13%. It is also
providing loan for members who are interested for foreign employment.

Tt was realized that only providing loan could not provide the benefit out of dairy business to the
member farmers. Large quantity of feeds was purchased by the members and tangible amount of money
was taken by the feed traders. If this facility could be provided to the member farmers, the benefit taken
by the traders could be available for the cooperative. Cooperative then started to purchase and sale the
feeding materials (formula feed, wheat, rice bran, oil cake etc). Started to provide veterinary services,
vaccination, AI services, and improved bull and organize animal health camp time to time. To maintain
the Good Manufacturing Practices (GMP), cooperative is providing aluminum milk can, free insurance and
training on GMP process.

Double entry system has been operating in maintaining account and fully computerized account system is
installed. All the transaction is being done by the cheque operation with two signatories among the
executive members. Bank account at Himalayan Bank, Nepal Bank, Nepal Credit and Commerce Bank, and
saving account in Cooperative Development Bank is operating.

How this success achieved:

Tika Ballab Sapkota contributed a lot to bring the cooperative in this stage. It was not possible to increase
milk production rearing only 2/3 local dairy animals, it requires commercial farming. To motivate the
farmers, in support of National Dairy Development Board (NDDB), members of this cooperative visited
different dairy farms in Chitwan, Gorkha, Lumbini, Pokhara, Jhapa, Ilam, Darjeeling, Patna and many other
places to observe the commercial dairy farming.

In technical support of NDDB and financial support from National Cooperative Bank, member farmers
encompassing livestock insurance, subsidized loan were motivated to purchase and rear productive dairy
animals. Farmers started to rear productive Jersey Cow and milk production started to increase. Only
depending on the DDC for milk sale was felt insecured as DDC exert pressure to provide more milk in lean
season and shows reluctancy to purchase in flush season. Considering the problem, cooperative decided
to establish milk chilling center and processing plant. Currently cooperative collects and chills 3500 to
4000-liter milk daily. There is 13 regular staff to operate the business.

Support from NDDB and Department of Cooperative

In the year 2070/71 proposal was called by Department of Cooperative (DoC) and National Dairy
Development Board (NDDB) and proposal was submitted accordingly to establish milk processing plant
with chilling center. DoC sanctioned 25 Lakh and NDDB sanctioned 10 Lakh for the cooperative,
additional amount required was borne by the cooperative itself.

Future Plan

Milk product diversification is the major and immediate future plan. This will ensure more benefit out of
milk production to the member farmers and dependency to DDC for raw milk marketing. It is planned to
produced Dahi, Chhurpi, Butter, Paneer etc.

Lesson learnt
 Dairy farmers must be educated on improved and modern dairy animal farming augmenting
training, exchanged visit and providing extension services.
 Collective and institutional support is required to the farmers for modernization and
commercialization of dairy business.
 Secured market, insurance and easy access to loan could be instrumental for the dairy sector
development.
 Subsidy and support should be concentrated in achieving specific objectives.
58
Case: 2 Karekhola Milk Producers Cooperative (MPC) Limited, Birendranagar-6, Surkhet

Background:

In the initiation and leadership of local social leader Netra Prasad Sharma, the cooperative was
established in 2065 BS. Objectives of the MPC were to collect the tiny quantity of milk produced by the
farmers and supply to the market where consumers are not getting milk to consume. Currently the
cooperative is collecting milk from more than 350 dairy farmers.

Support from the PACT

The cooperative has total current capital NRs. 50 Lakh and fixed capital NRs. 87 Lakh. In the year
2068/69, Project for Commercialization of Agriculture and Trade (PACT) called proposals from eligible
firms to operate business/ projects and the cooperative applied for the same.

Out of the grant/subsidy the cooperative purchase chilling vat and associations, cream separator, milk
filling machine, generator, Khowa machine and other machinery and equipment. In the year 2070 BS
cooperative received NRs. 37 Lakh from PACT. Out of that money dairy farmers received loan to purchase
improved dairy cattle, dairy animal management and rearing claves.

Current activities of the cooperative:

 Collection of milk
 Loan for rearing claves (protecting calves)
 Chilling, processing and marketing of milk and milk products: i) Dahi, ii) Khuwa, iii) Butter, iv)
Ghee, v) Paneer, vi) Chhurpi and vii) Sweets

The dairy products produced by the cooperative have been marketing in Birendranagar bazaar. The
subsidy/support has been instrumental for the dairy sector development in Surkhet and providing direct
employment to 10 persons.

Future plan:

 Operate dairy animal insurance of own

 Encourage the farmers for saving and open saving account for transaction out of earning from the
business
 Upgrade the capacity of Khowa making and chilling facility (additional machine for Khowa
making and chilling vat)
 Establish own logo for marketing of milk and dairy products
 Market study for fixing market price of the dairy products
 Increase the current/running capital of the cooperative
 Operate promotional activities for increasing milk.

Learnings:

 Steady and continuous efforts are required for successful operation of business.
 Peoples' support can be achieved when good governance practice is executed in the organization.
 Small support could work for big achievement.

Case: 3 Uddamseel Krishi Multipurpose Cooperative Limited, Dang

Background:

Registered in 2063-03-06 with the involvement of 25 dairy farmers, there are 992 members at present.
Village youths attracted towards the foreign employment and were leaving the village resulting fear of

59
youth free village. Observing the situation social activist Mr. Dilip Raj Khanal generated an idea to retain
the youths in the village and identified that dairy business could be an instrument.

How this success achieved:

Dilip Raj Khanal has been an educated social activist and was hard working with careful research in any
issues. He was well accepted by the community as a positive thinker and cooperative. After the series of
self-thinking he decided, dairy business is the appropriate instrument for socio-economic development.
He considered about the product diversification and value addition in the dairy products that could
provide more benefit out of milk production.

Mr. Khanal tried to organize the dairy farmers and convince them that dairy business could be better than
the traditional agriculture in their area. But he failed to convince them. But he continued his efforts to
convince through community meeting, individual meeting and tell the story of dairy farmers in other
areas. Finally, he was able to organize 25 dairy farmers to register Uddamseel Krishi Multipurpose
Cooperative Limited, Lamahi-1, Dang.

The farmers were bringing milk individually to the Lamahi bazar carrying small can. They normally spent
2-4 hours for milk sale. Mr. Khanal then try to convince the farmers to collect milk in one place, measure
the quantity and quality and bulking the milk then send to the market, this will save the farmers time to
sale milk. The cooperative could not operate smoothly until 10 months of registration. Mr. Khanal become
worried as seed was not sprouted/germinated. He then decided to convince the energetic youths and
motivated them in dairy farming. Finally, after 12 months, they all convinced to Mr. Khanal's idea and
started to collect milk in Lamahi-1 Chaulahi.

Mr. Khanal was always visiting to Dang and to DLSO and knew that there is program for farmers'
exchange visit to model dairy farms. He requested the concerned officer to include five cooperative
members in the visit program. Finally, three-member farmers got opportunity for exchange visit from the
DLSO. He then requested DLSO to incorporate other 7 members to be visited from own source
(cooperative fund) and was able to do so.

They visited to Ilam, Chitwan, Nawalparasi and Rupandehi and observed different scale dairy farms and
farming practices and profitability. Observing the potential of dairy farming from these districts, some (8-
10) farmers purchased 30 Jersey cow and started farming. From these 30 cows, 350 liters of milk was
produced. Observing the good production, other farmers also started dairy farming purchasing dairy
animals from Chitwan, Nawalparasi and Rupandehi. and milk production increased up to 500 liter a day
within one-year time. They sold the milk to the Lamahi bazaar. Currently the cooperative is collecting
2000-2500-liter milk per day from different 10 milk pocket areas.

When the milk production increased, it became difficult to sell. Cooperative thought that product
diversification could be an idea to utilize the produced milk that could also be able to add the value in the
product and increase benefit to the member farmers. They started to operate Kanchan Dairy in Chaulahi-
1, Deukhuri and started making Dahi. In the meantime, cooperative in the leadership of Mr. Khanal got
information that PACT is working in the district and providing grant to the cooperative and private farms.
Meeting was held in the cooperative and decided to submit the proposal to PACT when the notice
published and they have submitted their proposal.

Subsidy/ support from the PACT and DLSO

The cooperative received grant/subsidy from the PACT amounting NRs. 30 Lakh. Out of that money 9
milk chilling vats (1000-liter capacity each) were purchased and provided to the milk collection center
from where the cooperative collected milk. The money was also used to purchase milk chiller (NRs.
175,000) and to establish cold room (NRs. 250,000). The cooperative organized the member meeting and
selected 35 needy and genuine dairy farmers. The farmers purchased 35 cows and produced 12-liter milk
per day. The cooperative fixed the price of dairy cow NRs. 90,000.00 and decided to provide 50 percent
i.e. 45,000 to be contributed by farmer and 45,000 by the cooperative in condition to deduct 25 percent of
the bill out of milk provided to the cooperative. Cooperative also provided training on product
diversification and dairy management to the staff members working in dairy processing.
60
The cooperative established dairy processing industry "Kanchan dairy" and now is processing and selling
600-700-liter fresh milk, 70-liter dahi, 4 kg paneer, 3 kg ghee, 500-liter mohi, 3 kg butter and ice-cream
(only in season). The total transaction of the dairy is about NRs. 60,000 per day. Observing the excellent
job done by Cooperative, DLSO Dang provided NRs. 200,000 for breed improvement program. The area
has been transforming to good genetic resource of dairy cattle. The cooperative is an example to
everyone.

Future Plan

The cooperative has planned to expand the capacity of dairy processing industry by expanding the
market up to the Ghorahi, Tulsipur, Gorusinghe and other areas. It was also envisioned to provide dairy
extension service to the member farmers including veterinary services, AI, forage/fodder production and
credit including insurance.

Conclusion:

Steady and rigorous effort could bring every success.

Case: 4 Yadhav Buffalo Farm, Mohanbatpur-4, Bardiya

Background:

Paban Kumar Yadhav is permanent resident of Mohamadpur-4 Bardiya and is involveed in Buffalo
farming as family occupation. He is a social personality and politically active. In the past he was rearing 6
buffaloes with traditional manner and produced 20 liters of milk in a day. He registered his farm in DLSO
Bardiya as 'Yadhav Buffalo Farm."

How the success

Being a social activist and politically active, he got several opportunities to visit different location of the
country and observed many cattle/buffalo farms across the country. He shared the dairy farming he
observed in different location to his wife and other family member. Initially, his wife was not convinced,
to convince her he brought her to Rupandehi, Chiwan and Nawalparasi. Looking at the good performance
she also become positive to start commercial dairy farming and he decided to operate farm effectively
and efficiently using best practice in buffalo rearing.

Subsidy/support from DLSO

Mr. Yadhav came to know that there is provision of subsidy in rearing improved buffalo. When the notice
was published by DLSO Bardiya, he applied as per prescribed format along with essential documents, and
was able to get subsidy amount NRs. 250,000 in FY 2073/74. Out of the subsidy he purchased additional 5
buffaloes and improved the shed. Now his herd size is 16 and 10 are lactating and producing 80 liters of
milk per day that have gross earning of amount NRs. 4000 daily. Milk produced is being sold in nearby
milk collection center. Observing the good benefit, other farmers are also being attracted in buffalo
rearing.

Future plan:

He is well convinced that if the milk can be diversified for producing different dairy products, it could
provide better benefit. There is good market for dahi in all seasons, and ice-cream and lassi in hot season.
. He was seeking technical support for milk product diversification and scheme for application of loan to
Bank.

Learning:

 "Learning by doing and seeing is believing" is well acknowledge, that was the main reason Mr.
Yadhave undertook improved buffalo farming.
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  Support is required for improving sheds so that Good Husbandry Practice could be achieved.

Case: 5 Shree Maude Cow Rearing Center, Aalital-4, Dadeldhura

Background:

Jangan Sing Maude from Aalitas-4, Dadeldhura is a leader farmer. Cattle/buffalo farming is his family
occupation and was involved in this occupation using traditional farming system. He received different
training in livestock production and management from DLSO. Previously there was no trend to register
the dairy farm in DLSO, but it was started since last 5 years and he also registered the farm in DLSO.

How success happened?

Mr. Maude is a social activist and well recognized personality in the village. Once when he visited Chiwan,
he observed many small and big dairy farms. He collected different information on how to rear cow in
terms of feeding, breeding, care, disease and way of increasing milk productivity. He come back and
shared information to the family members. After 3 months of internal discussion he came to decision and
went to DLSO for further suggestion. When he received positive reaction on cow farming from DLSO, he
went to Chitwan and purchased one Holstein Cow in 2070/71. Now his herd size is 9.

He also got an opportunity to get training on VAHW from DLSO and blended his occupation. When he
received training, he decided to establish agro-vet that could be an asset to support the cow rearing.

Subsidy from DLSO:

In the year 2072/73, he come to know that there is subsidy for cow rearing and went to DLSO. DLSO
suggested the process of application and eligibility criteria of the subsidy. He submitted proposal for cow
rearing and received NRs. 250,000. Out of that money he renovated the shed and purchased two cows.
This support contributed for Good Husbandry Practice (GHP) and increased 1 liter of milk in a day per
cow. Before the shed improvement average milk production per cow was 10 liters which increased to 11
liters. He has now 8 lactating cows and producing 90 liters of milk per day that have total value NRs.
5000.

He has been involved in veterinary practices and established good image in the village. He was nominated
for best Paravet award and was provided by Chief Minister of Province 7 in 2074-11-2.

Learning:

Knowledge and practice in cow rearing could have complementary effect in dairy animal management.
Training on dairy animal management and veterinary skill are blending factors for getting success in
dairy animal farming.

Case: 6 Laxmi Milk Producers Cooperative, Dhanusha, Janakpur Sub-metropolitan City ward
number 5

Background:

The cooperative was established in 2052 as saving and credit in support of Agricultural Development
Bank. Agricultural Development Bank provided training and subsidized block money to operate Small
Farmers Bank. It changed to saving and credit cooperative with increasing the share members to 733.
The cooperative is promoting small and medium farmers to become member. It also started to be
involved in collection and sales of milk. It is providing loan to operate enterprise taking wholesale loan
from Rastriya Banijya Bank and Agricultural Development Bank.

How these successes become possible?

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In the year 2068 Ram Naresh Choudhary, a social worker having positive thinking and able to win
people's faith, become chairperson of the cooperative. He generated new idea to be involved in improved
dairy animal rearing and establishd good governance practices in the cooperative.

Initially, in the leadership of the cooperative, 15/20 dairy cattle were purchased by the farmers and could
produce 150 liters or more milk per day. Other farmers were also motivated and showed desire to farm
dairy animals and milk production started to increase. It became difficult to sell milk and it was realized
that milk collection center should be opened to sell milk. After the inception of collection center and
noting good milk production, other farmers also started to rear dairy cattle.

Support received from Department of Cooperative

When farmers started to rear dairy cattle, milk production was increased. But due to frequent strike, milk
could not be sold/saved. Realizing the problem, cooperative decided to purchase chilling vat and other
dairy machine/equipment to diversify the products but there was no budget, they were worried. In the
meantime, Department of Cooperative called proposal for grant from the cooperatives to operate
business/industries.

Small Farmers Cooperative applied for the grant with recommendation from Division Cooperative Office
Dhanusha. The cooperative received 2 Lakh cash and machinery/equipment equivalent to NRs. 40 Lakh.
Out of that grant, the cooperative established a milk chilling center with chilling vat, accessories, cream
separator, paneer press and milk analyzer and others. Currently 500-liter milk is being collected and
chilled.

Future Plan

As the DDC dose not load the milk on time, the cost of chilling has been increased. To reduce the chilling
cost and maximize the benefit out of dairy business to the share members, cooperative planned to
diversify the milk products and it was incepted in 2065. It was planned to prepare dahi, paneer and lassi.
But they don't have knowledge and skill to operate dairy industry and seeking support from external
source.

Lesson learnt

 Promote the farmers for modernization of dairy farming with material and
management/implementation support.
 Provide appropriate knowledge and skill to the dairy farmers
 Only small-scale grant could not improve the farming, investment should be done in the projects
that can result better outcomes.
 Manage enough technical and financial support

Case: 7 Nandini Milk Producers Cooperative, Khairahani10, Shantibazar, Chitwan

Background

The cooperative was established in 2050-04-31 with 25 share members collecting Rs. 500 from each
member. There was no practice of milk sale and no market but some of the farmers wanted to sale milk.
The cooperative opened collection center but initially only 25-liter milk was collected in a day. It was
required to test the milk for fat and SNF to sell milk to DDC. For that, all 25-members raised Rs. 1200 per
head and purchased milk can and milk testing kit.

Milk started to be transported in bullock cart and bring up to Jyamire in DDC chilling center. Once milk
collection started and sold other farmers also started to become member and supplied milk.
Consequently, milk collection increased. As milk collection increased, MPC started to transport milk
63
through Rickshaw. MPC was able to collect milk 800 liters of milk within a year of registration. Now it
collects 4000 liters per day and has own chilling center and offer Rs. 3.50 per liter extra to the members.

Subsidy/support

From Agricultural Development Bank NRs. 17 Lakh for dairy animal insurance, PACT provided 70% grant
support to purchase milk transport vehicle and improve 60 sheds. In the year 2072/73 Livestock and
Poultry marketing directorate provided Rs. 13,81,042 for market improvement.

There after it has established collection centers at three locations i) Khairahani-9, ii) Rapti-6, and iii)
Khairahani-10 and started dairy animal insurance since 2071 BS and insured 680 dairy animals. From the
saving fund of the MPC, it has started to provide up to NRs. 30 Thousand for shed improvement and
initiated scheme "Sutkeri Kharcha" @ Rs. 700 for buffalo and Rs. 500 for cow, provided NRs. 1,12,000 in
last year for forage cultivation/promotion and has allocated NRs. 2 lakh for this year.

Future Plan

According to Lila Thapaliya, Manager of the MPC, they have plan to diversify the milk to different
products like dahi, butter, paneer

Learnings

 It is required to motivate the farmers for dairy farming and it must be started by the local people
who have development vision and clean image.
 It is required to use new technology to drive the business as time demanded.
 Collective institutional effort is required for getting success
 Even the small subsidy/support can energize people to operate development works
 Good market, insurance, access to loan and technical support has been instrumental for getting
success in dairy business
 Strengthening institutional capacity and skillful leadership is required for any success

Case: 8 Fulun Krishi Sahakari Sanstha, Dhunche-5, Rasuwa

The cooperative was established in 2067 and is working effectively with 434 members. It is located at
Gosaikunda Rural Municipality ward no 5. It is headed by a female Ms. Sonam Nurpu Ghale as the
Chairperson. They have planned to operate the cooperative by collective agriculture farming. Being
located at the remote area, it became difficult to generate active people participation. However,
chairperson's activeness motivated the members for saving and credit, agriculture farming and
agriculture business.

Support from HIMALI Project

The area is very potential for Chauri rearing, but farmers were not interested by considering that the
farming is not profitable occupation compared to the foreign employment. Chairperson was worried as
the youths were driving towards foreign employment and the most potential Chauri Sheds became
empty. Real history came in existence when the HIMALI project introduced in the district. The
chairperson got information on the project and project working modality of HIMALI Project and held
meeting of the executive board. The executive committee decided to apply for grant/subsidy.

The cooperative applied to the HIMALI project for Chauri rearing. Total budget for project was NRs.
22,09,000 and project provided grant NRs. 17,67,200 and NRs, 441,800 was borne by the farmers. Out of
support they purchased 50 Chauries and kept in single herd. The project started in 2070-12-13 in
Gatlang-9, Rasuwa. Due to the devastating earthquake of 2072-01-12 and 29, 15 chauries died and now

64
there were only 35 Chauries in the herd at that time. Now the size has of herd has increased to 55 and the
farm has recovered from the destruction of earthquake.

Future plan

The cooperative has plan to purchase additional 20 Chauries and increase the herd size thereby increase
milk production. It has alos planned to purchase machinery and equipment for Cheese making and start
Cheese production. Since there is no cold store in Rasuwa, it has to be ripened in cold store in Kathmandu.
There is plenty of market in Kathmandu for Yak Cheese.

Lesson Learnt

 Project should be designed by foreseeing possible natural calamities and human induced
development initiatives along with the physical, environmental, climatic and social aspects.
 Restless effort could bring success in any business.

Case: 9 Singhdevi Gai Farm, Boch-3, Dolkha

Background:

Makkar Bahadur Thapa, 78 years old from Boch-3 Dolkha has been involved in cattle farming as family
occupation. His cattle shed is at ward no 3 and residence at ward number 5. He is a social
worker/community leader and has been in responsible position during Panchyat Regime and Democracy.
He has wife, 2 sons, 2 daughters in laws and 4 grandson/daughter. But now only husband and wife are
together.

Support from Himali Project

When HIMALI Project started to work in 2070 BS, he applied for grant support and was able to get NRs.
160,000 in 2070 Asar. Objective of the support was milk production and calf rearing.

How the success achieved:

He purchased 6 dairy cattles from this support. Currently he has 3 lactating cattles producing 30 liters
milk a day and his monthly income is Rs. 50000. Now he is supplying cattle feed also to other farmers.
Observing the success, some other 42 farmers have started dairy cattle farming. He has experienced that
insurance could save the farmers from the total loss. Observation visit to similar type farms could be
instrumental for operating farm (he observed the cattle farms in Gorkha). Veterinary services as and
when required basis should be available and coordination between the supporting agencies should be
strong to avoid duplication.

Future plan

In his experience, price of the fresh milk is low and milk trade is not profitable as expected. There is
plenty of grazing/forage land and appropriate climate for dairy cattle farming. In this background, there
is plenty of opportunity increasing milk production. Observing the good market of dairy project closely
located to district headquarter, he has planned to diversify the dairy products through technical financial
support from government/non-government sector.

Learning

 Motivate the farmers in dairy cattle farming

 Organize exposure visit to the appropriately operating dairy cattle farms
 Provide technical training to the dairy cattle farmers in effective and efficient farming
 Increase adequate extension services

65
  There is need of coordination between the supporting agencies, local government and other
value chain actors.
 Massive awareness on the livestock insurance, its importance among the farmers
 Supporting agencies should monitor the activities regularly and guide the farmers for better
result.

FAILURE CASES
Case: 1 Namuna Agro Farm- Kaski Pokhara- Local Breeds is required for sustainability

Background:
Lal Bahadur Acharya from Pokhara-17 Kaski observed good market of milk and dairy products in
Pokhara. This could be instrumental for good earning. Observing the opportunity, he started Namuna
Agro Farm in 2070 BS taking land in lease.

Constructing improved shed, he purchased 8 Lactating Buffaloes from India and husband and wife started
working together in the farm. He hired a local worker to assist farming. He was able to sale 100 liters of
milk. Being encouraged with the good production, he added 3 other buffaloes after 6 months. Observing
the performance, National Dairy Development Board (NDDB) provided NRs. 1 Lakh for shed
improvement. The farm was operating well.

Why failure

Without any problems, the milk production started decerasing. He took consultancy services from
veterinarian for several times to solve the problem, but milk production could not improve rather the
buffalo started fattening. Once the buffalo stop producing milk he started to exchange lactation buffalo
against the dry. The lactating buffaloes were purchased from India and produced more milk for about 1
month and then started decline again. Some of buffaloes become sick and died. Ultimately, he sold the
farm.

Learning

 Long term plan is required when starting the buffalo rearing business
 Should have enough capital to combat with the financial risk
 Should have well experienced technical services
 Select the breed suitable to agroclimatic situation
 Compulsory insurance to be done
 Farm owner should have minimum technical knowhow, knowledge and skill on buffalo
rearing/management.

Case: 2 Prasiddha Mahila Krishi Sanstha Limited, Sangachowk, Sindhupalchowk

Background

Women aspiring to be entrepreneurs from Sangachowk, Sindhupalchowk were involved in local dairy
animal farming. They had heard that, improved dairy cattle/buffalo can produce 10-15 liter of milk in a
day. After series of discussions they decided to register Cooperative with major objective of dairy cow
farming, develop the area as resource center, milk product processing and product diversification. They
registered the cooperative in 2068-12-28. They have collected money from the share members and
purchased 5 dairy cows and established a farm in leased land. These cows produced 10-liter milk in a day.

Support from NDDB

It was not possible to commercialize the farm with 5 cows. In the meantime, NDDB call request for
proposal from eligible institutions for commercial dairy farming and received NRs. 100000 in 2069/70 as
grant and purchase two additional cows.

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Reasons for failure:

They continued dairy farm. Unfortunately, earthquake in 2072 Baisakh, devastated the farm and all cows
died. Entire houses were broken and the many animals were lossed. Since entire people were affected and
transferred to the tent, they had no money to purchase and farm and the dairy animals. The farm has
liability to pay NRs. 60,000 for Nepal Electricity Authority (NEA) but they were unable to pay it and the
NEA has not yet taken action to exempt the due. Only a sign board of dairy farm can be observed at
present. Board meeting have not been held since last one year.

Learning

 Good governance in any organization is important to operate any business, organization or

group/farm.
 There are so many threats while executing business, patience is required to tackle with the
problems/threats and move a head
 Organized and well planning is required for successful implementation and operation of business
 Government's grant/subsidy is also citizen's money and should be used properly.

Case: 3 Hay Rishi Gai Farm- Gadhawa-5, Deukhuri

Introduction:

Dairy farming is the family occupation for many households in Gadhawa-5. A 55-year-old Sharada Sharma
is one of the energetic, entrepreneurship-oriented female having high moral and intrinsic energy. The
family size is 5 including 3 kids. She is happy with dairy cattle and wanted to be a dairy entrepreneur with
following objectives:

 Establish as the successful and exemplary cattle farmer

 Increase milk production and supply to the market
 Improve contextual livelihood and enjoy modern livelihood
 Be able to provide quality education to the children

Occupation start up

To become a dairy entrepreneur, she registered "Hay Rishi Gai Farm" in 2068 BS and started dairy farm
with 5 cattle. She aspired to be an entrepreneur and has full support from her husband. She added, she
always talked with husband, discussed on different pros and cons of the dairy farming and wanted to
increase the herd size.

She used to visit the DLSO and community forums to be informed about the development initiatives in the
village/community. She always talked to her friends, relatives, neighbors and seniors on her interest in
cattle farming. Her cousin "Kanchan Sharma" who is veterinary technician visited to her home and
informed that NDDB has published a notice to apply for registered dairy farms to undertake commercial
dairy farming. She was very interested on it and sought support to prepare application for commercial
dairy farming. Her cousin was not the resident of her village and seldom come to meet her. The cousin
helped her to prepare the application and submitted the form to NDDB.

Her application was approved and she received NRs. 100000 for commercial dairy farming in 2070 Fagun
and improved the shed and added one lactating cow. She used to deliver milk to Gadhawa MPC. Within six
years of the starting of farming with 5 dairy cows she was able to increase herd size to 22. Her dedication
encouraged to other farm families and other 10 also started to farm dairy cow. With the fusion of
knowledge, skill, enthusiasm, efforts and dedication she was moving ahead and was able to generate
capital for family livelihood. The kids were also supporting her in farming.

Once the kids completed their secondary level education, they have to go outside and Ms. Sharada Sharma
started facing problem to care the cows. As the time passes on, Ms. Sharada Sharma become sick she was
bed ridden. Now allthe responsibility of livelihood including child's education went to her husband.

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Household expenditure increased and income started declining as her husband did not manage
everything and decided to reduce the number of cows and eventually evacuated the shed. Ms. Sharada
Sharma has throat problem and she spoke with difficulty when she was telling her story. Ms. Sharada
Shama prays the god for not giving such punishment to anybody in this earth.

Conclusion:

Ms Sarma has very good intension, but the situation become against her aspiration. Thus, it can be learnt
that, to become a successful mankind good health of an individual is must. Ill health of a family affects the
livelihood and reduces income by three types: i) one cannot work to earn income, ii) expenditure
increases for treatment, iii) recovery requires time. For the success of any individual the important pre-
requisite is "Health is Wealth".

Case: 4 Mahat Krishi Tatha Pashupalan Gai Farm, Ilam-7, Ilam

Umesh Chandra Mahat an energetic youth from Ilam-7, Ilam district was much aspired with the milk
production in his vicinity. Many farm families were farming cow including his family. After the completion
of Bachelors level education, he decided to start dairy farming as his father become older. Being a first
son in the family, he has the responsibility to carry on the family livelihood.

He wanted to operate dairy farm systematically and visited to DLSO for necessary information and
suggestions. DLSO suggested registering the farm which is the eligibility criteria of getting any
government support. With the suggestion he prepared a small business plan with objectives of the farm
and went to DLSO for registration.

Once he registered the farm, with the business plan he prepared, invested NRs. 500,000 for purchase of
cow and shed construction. He recruited 2 employees, increased the number of cow to 15 and took 4
Ropani land for forage cultivation. His farm was becoming exemplary in the village and proved that
dedicated efforts make man successful. Milk produced by the farm was been sold in the local market.

He used to read the newspaper. He saw a notice issued by NDDB in "Gorkhapatra Daily" for application
submission to operate commercial dairy farming. He applied and was able to received NRs. 50,000 in
2068 Push, which added his enthusiasm.

He continued farming cattle and herd size reached to 25. Unfortunately, massive mastitis problem was
observed in the farm on 2072 Aswin followed by sterility. In the sametime, the animals were also
deaseased by liver fluke. Finally entire herd become diseased. He begged support from DLSO and other
private sector technicians but was not n able to control the disease. He incurred severe loss due to all
these problems at a time and become disappointed and decided to evacuate the farm.

Learning:

 Only having knowledge, skill and capital dairy farming could not be a success, it required long
term vision and patience.
 Professional extension services with quick response on farmers' problem are essential to keep
the high morale of farmers.

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 CHAPTER-7 SUSTAINABILITY OF DAIRY SECTOR SUPPORT AND SUBSIDY

A total of 9 indicators were designed to assess the sustainability and the conclusion of the sustainability
was assessed based on the judgement of the recipients using statistical tool.

7.1 Increment in the income of people due to subsidy/support program

An overwhelming respondent (95.24 percent) affirmatively mentioned that the income has been
increased while 4.76 percent negatively answer that income has not increased due to the program.

Table: 7.1 Whether or not the recipient's income increased year by year
Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Yes 8 9.52 72 85.71 80 95.24
2 No 1 1.19 3 3.57 4 4.76
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

7.2 Efforts done by the recipients to increase the income

The recipients are making different efforts to increase the income and still are searching for external
support as 51.19 percent submitted other proposals to the donors, 30.95 percent implemented saving
and credit, 16.67 percent operated own business and only 1.19 percent borrowed.

Table: 7.2 Efforts done by the recipient to increase income

Total
Individual Institutional
SN Particulars Number Percent Number Percent Number Percent
Submission of proposal
1 to the donors 3 3.57 40 47.62 43 51.19
2 Own business operation 4 4.76 10 11.90 14 16.67
3 Saving credit 2 2.38 24 28.57 26 30.95
4 Borrowing 0 0.00 1 1.19 1 1.19
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

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Fig: 18 Efforts done by the recipients to increase income for sustainability of project under subsidy/ support (Percent)

7.3 Ability of the recipients to undertake the current project without external support

The support and subsidy recipients were encouraged with their current business as 88.1 percent of them
mentioned that they can continue the current business in future and 11.9 percent said they cannot
continue. Though, many recipients were telling that they can continue in future, but still large numbers
are seeking external support and said reason for external support is for expansion of current activities.

Table: 7.3 Recipient's opinion on operation of project without external support in the future
Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Yes 8 88.889 66 78.57 74 88.10
2 No 1 88.889 9 10.71 10 11.90
Total 9 88.889 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 19 Recipient's opinions on continuity of the project under subsidy/ supportwithout external support (Percent)

70
7.4 Adequacy of financial resource, knowledge and skill in the recipients to continue
current activity

More than three-fourth subsidy/support receivers (78.57 percent) mentioned affirmatively that they
have enough finance, knowledge and skill to operate the current activity/business and 21.43 percent said
they don't have. But for further activities associated to the current project, they need additional finance,
knowledge and skill.

Table: 7.4. Enough financial resources, knowledge, skill to operate current project with recipient
Particulars Individual Institutional Total
SN Type Number Percent Number Percent Number Percent
1 Yes 9 10.71 57 67.86 66 78.57
2 No 0 0.00 18 21.43 18 21.43
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

7.5 Presence of other subsidy/support provider in the area

Other subsidy/support providers are also found in the project area as mentioned by the recipients. More
than two third (67.86 percent) recipients said that there are other agencies too to provide
subsidy/support while 28.57 percent said there are not and 3.57 percent recipients have no idea.

Table: 7.5 Presence of other subsidy/support provider in your locality/neighbouring locality

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 2 2.38 55 65.48 57 67.86
2 No 4 4.76 20 23.81 24 28.57
3 Don know 3 3.57 0 0.00 3 3.57
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

7.6 Modality of providing subsidy/support by other agencies

More than 50 percent (54.39 percent) recipients told that there is difference in the modality of providing
subsidy/support compared to current model while 38.60 percent said there is no difference and 7.02
percent said that they have no idea.

Table: 7.6 Differences in the modality of proving grant/subsidy/support by another agency

Individual Institutional Total

SN Particulars Number Percent Number Percent Number Percent
1 Yes 2 3.51 29 50.88 31 54.39
2 No 0 0.00 22 38.60 22 38.60
3 Don't know 0 0.00 4 7.02 4 7.02
Total 2 3.51 55 96.49 57 100.00
Source: Field Survey, 2018

71
7.7 Sustainability of the current activity/project

The subsidy/support recipients were asked to mention the sustainability of current activities on which
48.81 percent told that it is sustainable, 36.9 percent told very sustainable and 14.29 percent said not
sustainable.

Table: 7.7 Recipient's Opinion on the sustainability of this grant/subsidy/support program

Individual Institutional Total
SN Particulars Number Percent Number Percent Number Percent
1 Very sustainable 3 3.57 28 33.33 31 36.90
2 Not sustainable 2 2.38 10 11.90 12 14.29
3 Sustainable 4 4.76 37 44.05 41 48.81
Total 9 10.71 75 89.29 84 100.00
Source: Field Survey, 2018

Fig: 20 Recipient's opinions on the sustainability of subsidy/ supportprogram (Percent)

7.8 Overall evaluation of the recipients on subsidy and support program

There were a total of 84 subsidy/support recipients. They were requested to rank giving the evaluation
indicators. Total three options were given to rank 4 different indicators viz: relevancy (10 indicators/sub
indicator), efficiency (25 indicator/sub indicator), effectiveness (6 indicator/sub indicators) and
sustainability (9 indicators/sub indicators). The recipients were much more enthusiastic when the
subsidy/support program was prepared and two-third recipient rate that the program was very relevant
while none of them said not relevant.

Table: 7.8 Overall evaluation of subsidy and support

Total
Evaluation indicators Rank Number Percent
Very relevant 59 70.24
Relevant 25 29.76
Relevancy Not relevant 0 0.00
Efficiency Very efficient 32 38.10

72
 Total
Evaluation indicators Rank Number Percent
Efficient 42 50.00
Not efficient 10 11.90
Very effective 24 28.57
Effective 40 47.62
Effectiveness Not effective 20 23.81
Very sustainable 31 36.90
Sustainable 41 48.81
Sustainability Not sustainable 12 14.29
Total 84 100.00
Source: Field Survey, 2018

The program was very efficient for only 38.1 percent, for 50 percent it was efficient and for 11.9 percent it
was not efficient. Further, in the effectiveness ranking, very effective was mentioned by only 28.57
percent and effective by 47.62 percent and not effective by 23.81 percent. On the other hand, only, 36.9
percent recipient mentioned that it is very sustainable, 48.81 percent said sustainable and 14.29 percent
said not sustainable.

Fig: 21 Overall evaluation of the recipients on subsidy/ supportprogram (Percent Recipients)

7.9 Strength of the subsidy and support

 Release of money as per contracted amount

 Diversification of subsidy/support in social, technical and financial matters
 Investment in the productive sector
 Teaches and motivates for commercialized dairy farming
 Emphasis on the innovation
 Encourage the farmers in livestock and dairy sector
 Subsidy/support towards improvement in production and quality of milk
 Assist in dairy product diversification
 Promote groups and cooperatives in milk production and product diversification
 Increase in lactating cattle and buffaloes

73
  Supports self-sufficiency in agriculture
 Increase social awareness, increase income, increase awareness in health and education
 Initiative towards making self-sufficient in dairy products

7.8 Weakness of the subsidy and support

 Poor information dissemination

 Tedious process (time consuming, sometimes decision done only after appropriate time over)
 No continuity in the activities and increased dependency
 Weak monitoring and evaluation
 Subsidy/support very less compared to project cost and not possible to good performance
 Poor coordination among and between the government agencies
 Cannot accommodate the off-farm activities
 Complicated guideline and difficult to understand (need other consultant to know the provisions)
 Only accessed by the influential persons/institutions
 Only provided to the institutions not to the individual farmers
 Misused of subsidy/support (not properly used, sometimes recipient selection is not done
appropriately).
 Smell of corruption (financial transaction in sanctioning subsidy/support)
 Approval of very less amount compared to the requirement resulting in incompleted
projectsLack of action against those who fails to comply the contract and who does not perform
after signing the contract

CHAPTER 8. CONCLUSION AND RECOMMENDATIONS

8.1 Conclusion

Dairy sector subsidy and support has been implemented by different government and non-government
sector organizations in the dairy pocket areas. The support and subsidy programs are concentrated in
dairy animal management, dairy animal purchase, shed improvement, dairy
equipment/materials/utensils, dairy marketing and others.

To provide the subsidy and support the providing agencies have developed guideline/ operational
strategy and most of the guidelines are compliance to each other except the donor funded projects. It was
realized that the guideline prepared and administered by the donor funded projects are more structured
and complicated as many formalities are kept in selection, implementation, monitoring and evaluation of
subsidy/support. These guidelines found complicated as the subsidy/support are towards
commercialization of dairy farming and the volume of the money is bit high.

It has been envisioned that the commercial dairy farming will generate employment at local level and
contribute in increased production, productivity to meet the domestic demand and create base for export
and was regarded as need of the entrepreneurs and relevant by the recipients. However, the envisioned
principle has not been materialized as still there is gap between the principle and practice. Though
74
selection criterions are well structured so that the competent and genuine institution will be awarded,
but there have been loopholes and monitoring mechanism is not well implemented with possibility of
misuse increased. Moreover, this problem is less observed in low level support and subsidy.

Though, the guidelines tried to integrate the production and marketing analyzing value chain actors. Most
of the grant recipients could not understand the guideline and proposal format. As a result, they hired
consultant to write the proposal and collect the required documents. After the approval of the proposal,
the recipient did not consult with the consultant. Thus, there is gap between the contents in the proposal
and implementation. In such circumstances, the resources have been captured by the so-called elites and
influential persons and misuse of the fund have been flourished. On the other hand, there is benefit of
doubt between the actors in the value chain. Similarly, the implementor has not been able to eliminate the
misunderstanding as the value chain application is taken as formality to win the project/subsidy/support.
These support and subsidy could not accommodate the medium and small dairy entrepreneurs, which is a
predominant section in the Nepalese dairy sector.

The support has been found evenly distributed to production, chilling, processing and marketing, but
there has been gap between production and marketing. The support found little bit less in marketing
compared to production and processing. Most of the supported enterprises/ projects are still operational,
but there is confusion whether this will continue in future, specially the large supports. There is need to
improve in the accounting system, account keeping and auditing. It was found that during the
negotiation, the recipient agrees to contribute in higher level but when implementation started, but the
contribution was not as agreed and the contracted amount could not complete the activities resulting in
either poor quality work or uncomplieted ventures. It was however found that most of the project
activities were undertaken within time frame, but due to weak monitoring system quality of the
project/program is overlooked.

Recipients and the support providers possess weakness in releasing the instalment in time. The support
receivers do not have idea about the documents to be submitted with the report and when the report
should be submitted. They don't have project control and activities tracking mechanism established in
either side. Monitoring and evaluation formats were inadequately mentioned in the proposal and in the
contract. Due to these reasons the recipient submits the reports and bills which were not in compliance
with the government process and the recipients perceives that the providers are harrassing them. These
things should have been well mentioned in the contract or operational guideline and the recipients
should be well oriented on it.

Different improvements were observed in the dairy sector due to the subsidy and support including
improved milk marketing, milk quality improvement, better dairy animal management, improvements in
sheds for keeping dairy animal. Changes observed due to the subsidy/support were among others,
increase in livestock number, increased quantity of milk production, increased productivity of animals
and improvement in composition of dairy animals i.e. ratio of lactating and dry animal. Other changes
included increase in family income, improvement in the health education, sanitation.

Different opportunities were created by the support and subsidy in dairy sector in the survey districts.
Market expansion of milk and milk products, increased number of dairy animals, dairy product
diversification and diversification in the gender role were observed. However, these changes and
opportunities are not only due to this support and subsidy but also due to results of efforts done in the
past. Moreover, this subsidy/support was able to ignite the dormant past efforts in action.

There was enthusiasm among the recipients that the project activities/enterprise will continue in the
future as they have good knowledge, skill and enterprise operating management experience. However,
still their thinking is to search other donors for external support showing the dependency character.
Nevertheless, on the whole, the subsidy and support programs have proved to be relevant, efficient,
effective, and sustainable.

8.2 Recommendations

Based on the findings of the evaluation following recommendations have been made for future
intervention:
75
a) Policy and guideline

Our policy should be inclined towards making the dairy farming as enterprise and farmers as
entrepreneurs and should not make them dependent to others. Technical support with policy
interventions like preparing business plan, access and availability of soft loan assessing the business plan,
making loan process easy, subsidized insurance premium, providing full package of technical
management services by the government, provision of adequate loan in witness of government authority
and no cash subsidy to the big commercial farms/processing industries but assurance of buy back
guarantee and offering subsidy based on production. This guarantee should be offered by local or the
federal government.

For small dairy farmers/dairy industries provide support and subsidy to improve the current
farming/processing practice and scale-up to commercial. Make the guideline easily understandable to the
recipients. The guideline should not be the barrier to apply by any enterprise/industry/farms. The
proposal format should be simple and made in matrix mentioning what you want to do? what will be the
result after you do this? what activities you need to do for achieve this? how you will do? where you will
do? when you will do? how you measure that the things you wanted to do is achieved and what is the
budget required (Activiti wise). In addition, the following things should be considered:

 Provision of reward and punishment to the subsidy/support receiver

 Subsidy on production should be implemented with strong database establishment to
accommodate entire farmers.
 Involve the farmers/entrepreneurs while preparing such policies
 Policy should ensure subsidy/support to the genuine who really work and discourage the fake
seekers.
 Emphasise the kind support than the cash
 Make policy to make the farmers entrepreneurs and farming as entrepreneurship
 Coordinate with local/provincial government and central government to increase road network
at dairy farming potential areas and ensure one door subsidy/support system with appropriate
database establishment
 Provide block soft loan subsidy/support to the dairy processing industries to establish their own
milk pocket area and allocate specific milkshed areas for specific dairy processing industries with
buy-back guarantee of milk produced by the farmers.
 Endorse livestock breeding policy and expand the AI mission importing sexed semen to improve
the availability of productive dairy animal and reduce the male.

b) Implementation

 Develop strong implementation plan with project control mechanism (activity tracking system)
 Continue to execute effective programs with required improvements and discontinue that could
not contribute
 Linkage the production with marketing and market assurance
 Manage support balancing inputs and services i.e. provision of inputs and services to get better
result
 Support for transportation of goods and materials
 Increase access and availability of soft loan/subsidized loan and insurance by implementing
government policy
 Implement forage mission, soil test, maize mission, AI mission extensively.

c) Structure development

 Establish a strong database to have complete record of milk production and processing to
administer subsidy against the production. A computer/mobile application shall be prepared to
collect the information from service center/local government
 Continuous training and skill development compatible with technology development
 Develop the structure in compliance to criterion fixed for support and subsidy
76
  Pay due attention to new and affordable technology for modernization
 Establish livestock breeding centers and resource at different locations to supply required
number of productive dairy animals as and when required
 Increase milk collection centers and chilling centers at strategic location
 Mobilize local government to develop local structure for dairy sector development
 Manage skilled, experienced and efficient technical manpower
 Establish structure that increase access and availability of subsidy/support to real beneficiaries
 Provision of exchanged and observation tours
 Establish strong and functional value chain relationship between the actors

d) Monitoring and evaluation

 Develop calendar of monitoring in compliance with the project objectives and calendar of
operation of project activities
 Meaningful field verification should be done to have exact situation of the subsidy/support
applicant and select appropriate applicant
 Develop indicators of the projects and monitoring indicator accordingly
 On site suggestion and counseling support should be provided for improvement and complete
the activities within time frame and budget

77
 ANNEXES

SURVEY TOOLS

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78
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79
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80
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81
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s_ Psbd bIf -s'zntf_ v_ bIf -s'zntf_ u_ bIf 5}g -:t/Lo 5}g_

O{ k|efjsf/Ltf / k|efj

$^= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qsf] ljsf;df s] s] ;'wf/x? cfP <

s_ ufO{ e}l; kfngdf ;'wf/ v_ b'w jhf/Ls/0fdf ;'wf/ u_ b'wsf] u'0f:t/df ;'wf/
3_ cGo -v'nfpg'xf];_==

$&= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qdf s] s] kl/jt{gx? cfP <

S_ b'wsf] pTkfbgdf j[l4 v_ ufO{ e};Lsf] ;+Vof j[l4 u_ ufO{ e};Lsf] s'n ;+Vof / b'w lbg] ufO{
e};Lsf] ;+Vofsf] cg'kftdf ;'wf/ 3_ ufO{ e}l;sf] pTkfbsTjdf j[l4 ª_ 3/fo;L cfDbfgLdf j[l4 r_
cGo -v'nfpg'xf]; _
82
$*= of] cg'bfg÷;xof]u sfo{qmdjf6 cg'bfg÷;xof]u k|fKt ug]{x?sf] hLjgkBtLdf kl/jt{g cfPsf] 5 <

s_ cfPsf] 5 v_ 5}g

$(= cfPsf] eP s'g If]qdf kl/jt{g b]Vg'ePsf] 5 <

s_ :jf:Yo v_ lzIff u_ kfl/jfl/s cfDbfgL 3_ pkef]u ª_ ;DklQ

r_ dgf]/~hg 5_ cGo -v'nfpg'xf]; _ .

%)= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qdf s] s:tf cj;/÷;Defjgfx? b]lvPsf5g\ <

s_ ufO{ e};Lsf] ;+Vof j[l4 x'g] v_ b'w / b'Uw kbfy{sf] jhf/ j[l4 u_ b'Uw kbfy{sf] ljljlws/0f
3_ b'Uw kbfy{sf] u'0f:t/df clej[l4 ª_ dlxnfx?sf] e'dLsfdf ljljlws/0f r_ cGo -v'nfpg'xf];
_.

%!= of] cg'bfg÷;xof]u sfo{qmd slQsf] k|efjsf/L ePsf] kfpg'eof] <

S_ clt k|efjsf/L v_ k|efjsf/L u_ k|efjsf/L gePsf]

O{_ bLuf]kgf

%@= o; jif{ clwNnf] jif{sf] t'ngfdf tkfO{÷tkfO{sf] ;+:yfsf] cfDbfgL j9]sf] 5<

S_ 5 v_ 5}g u_ yfxf 5}g

%#= tkfO{n] cfkm\gf]÷;+:yfsf] cfDbfgL j9fpg s] s] sfd ug'{eof] <

S_ bfqL lgsfodf k|:tfj k]; u/]sf] v_ cfkm\g} Joj;fo ;~rfng u/]sf] u_ jrt C0f
;~rfng
3_ ;fk6L lnPsf] ª- cGo -v'nfpg'xf]; _ .

%$= tkfO{÷tkfO{sf] ;+:yfn] ;~rfng u/]sf sfo{qmdx? jfXo ;xof]u ljgf klg ;~rfng ug{ ;Sg'x'G5 <

s_ ;S5' v_ ;lSbg u_ yfxf 5}g

%%= ;~rflnt sfo{qmd sfof{Gjog ug{ tkfO{÷;+:yf ;+u k'Ubf] cfly{s ;|f]t, 1fg, ;Lk 5 <

s_ 5 v_ 5}g

%^= 5}g eg] tL ;|f]t / ;fwg sxfFjf6 k|fKt ug'{x'G5<

;xof]usf] k|sf/ ;|f]t
ljlQo
Dffgj;d;fwg
k|fljlws
jhf/Ls/0f
cGo -v'nfpg'xf];-
83
%&= tkfO{ cfkm'nfO{ cfj:os kg]{ ;xof]u k|fKt ug{ g;Sg] eP lsg < sf/0f v'nfpg'xf];.
==============================================================================================================================================
==============================================================================================================================================
==========

%*= tkfO{sf] j/k/ lhNnf÷ufpFdf o:t} cg'bfg÷;xof]u lbg] ;+:yfx? ePsf] yfxf kfpg'ePsf] 5<

S_ 5 v_ 5}g u_ yfxf 5}g

%(= olb 5g eg] pgLx?n] lbg] cg'bfg÷;xof]u / tkfO{n] k|fKt u/]sf] cg'bfg÷;xof]usf] ljlw / k|s[of
km/s 5 <

S_ 5 v_ 5}g u_ yfxf 5}g

^)= of] cg'bfg÷;xof]u sfo{qmd lg/Gt/ rNg] ÷bLuf] /xg] s'/fdf tkfO{nfO{ s:tf] nfU5 <

s_ clt bLuf] x'G5 v_ bLuf] x'G5 u_ bLuf] x'b}g

^!= cg'bfg÷;xof]u lbg] ;+:yfsf] ;sf/fTds / gsf/fTds kIfx? s] s] 5g\ <

s_
;sf/fTdsM==============================================================================================================================
v_ =gsf/fTdsM =======================================================================================================================

^@= cg'bfg÷;xof]u lbg] ;+:yfsf] ;j} eGbf ;sf/fTds kIfx? s] s] 5g\ <
==============================================================================================================================================
==============================================================================================================================================
==========

^#= cg'bfg÷;xof]u lbg] ;+:yfsf] ;j} eGbf gsf/fTds kIfx? s] s] 5g\ <
==============================================================================================================================================
==============================================================================================================================================
==========

^$= of] cg'bfg÷;xof]u sfo{qmdnfO{ ;'wf/ ug{ tkfO{sf ;'emfjx? s] 5g\< -gLltut, lgb]{lzsf, of]hgf
th'{df, sfof{Gjog, cg'udg, d'NofÍg_
==============================================================================================================================================
==============================================================================================================================================
==========
wGojfb
cGtjftf{ lng]sf] gfd==================================================== x:tfIf/ ldltM @)&%÷!÷

84
 g]kfndf 8]/L If]qdf lbO{Psf] cg'bfg tyf cGo ;xof]ux?sf] k|efj d'NofÍg

/fli6|o b'Uw ljsf; jf]8{ tyf g]kfn jftfj/0f ;+/If0f s]Gb|

;+:yfut cg'bfg tyf ;xof]u k|fKt ug]{x?sf] nflu k|ZgfjnL

3/d'nLsf] gfdM=================================pQ/bftfsf] gfdM=================================lhNNff============

k|b]z====================lnËM===================== pd]/ -jif{_==================== k]zfM==========================
pQ/bftfsf] lzIffM s_ lg/If/ v_ ;fIf/ u_ k|fydLs 3_ dfWoflds ª_ pRr
dfWoflds r_ :gfts jf jbL .
;+:yfsf] gfd============================sd{rf/L ;+Vof================= dlxnf====================k'?if=============

!= tkfO{n] b'Uw If]qsf] ljsf;sf] nflu sf]lx s;}jf6 cg'bfg jf cGo ;xof]u k|fKt ug'{ePsf] 5 <
S_ 5 v_ 5}g

@_ 5 eg] s] k|fKt ug'{eof] < s_ cg'bfg v_ ltg{ gkg]{ /sd u_ ;fdu|L ;xof]o 3_
cGo ;xof]u .

#_ cg'bfg jf cGo ;xof]u k|fKt u/]sf] eP sf] jf6 k|fKt ug'{eof] <
s_ b'Uw ljsf jf]8{ v_ kz';]jf ljefu÷kz';]jf sfof{no u_ KofS6
3_ s]=o'=lj=s] ª_ ;fgf tyf dem\of}nf ls;fgsf] cfDbfgL j[l4 cfof]hgf – RISMFP)
r_ lxdfnL cfof]hgf 5_ s[lif tyf vfB ;'/Iff cfof]hgf h_ ;xsf/L ljefu
em_ ul/jL lgjf/0f sf]if `_ ljsf; ;fem]bf/ -8flg8f, l8=Pkm=cfO{=l8, hfO{sf cfbL_
6_ cGt/fli6|o jf /fli6|o u};; -k|fS6Lsn PS;g, lxkm/=÷pGgtL======_ 7_ cGo v'nfpg'xf];_

$= lnPsf] ;xof]usf] k|sf/ s_ gub v_ j:t'÷;]jf

%= cg'bfg jf cGo ;xof]u k|fKt u/]sf] ljifo s] lyof]<

s_ ufO{, e};L vl/b v_ rn]sf] /fFuf]÷;fF9] jf vl/b u_ uf]7 ;'wf/÷lgdf{0f
3_ bfgf÷3fF; -3fF;sf] jLp, j]gf{ ;lxt_ ª_ 8]/L pks/0f r_ b'w k/LIf0f ls6 6_ 8]/L
d]l;g
7_ 8]/L ;fdu|L÷ef8f jt{g 8_ cGo -v'nfpg'xf];_

c_ ;fGble{stf -Relevancy)
^= tkfO{n] k|fKt u/]sf] cg'bfg, ltg{ gkg]{ /sd jf cGo ;xof]u tkfO{sf] nflu slQsf] ;fGble{s -
cfj:ostf cg';f/_ lyof] <

s_ lyof] v_ lyPg u_ yfxf ePg

&= lyof] eg] of] ;xof]u 8]/L If]qsf] ljsf; / ;fdflhs cfly{s cj:yf ;'wf/df slQsf] ;fGble{s /x\of] <

s_ Psbd ;fGble{s v_ ;fGble{s u_ ;fGble{s ePg

*= of] cg'bfg jf ;xof]usf] s'g kIf ;j} eGbf j9L ;fGble{s nfUof]< jf cfj:ostf cg';f/sf] lyof] ]<
==============================================================================================================================================
==============================================================================================================================================
85
(= of] cg'bfg jf ;xof]usf] s'g kIf ;j} eGbf j9L c;fGble{s nfUof]< jf cfj:ostf cg';f/ gePsf]
dfGg'eof]<
==============================================================================================================================================
==============================================================================================================================================
==========

!)= tkfO{n] ;Dem\of}tf cg';f/sf] cg'bfg÷ ;xof]u k|fKt ug'{ eof] <

S_ k|fKt u/] v_ k|fKt ul/g u_ yfxf ePg

!!= olb k|fKt gu/]sf] eP ;Dem\of}tf ePsf] t/ tkfOn] gkfPsf] s'/f j'bfut eGg'xf];\ .
==============================================================================================================================================
=====
==============================================================================================================================================
=====

!@= tkfO{n] k|fKt u/]sf] cg'bfg÷;xof]u ljt/0f ug]{ sfo{ljlw lyof] < s_ lyof] v_ lyPg

!#= olb lyof] eg] lgDg s'/fx? jtfpg'xf];M

s_ sfo{ljlwdf of]hgf tof/L÷k|:tfj n]vg ljlw tkfO{n] j'em\g] vfnsf] lyof]<s_ lyof] v_ lyPg
v_ sfo{ljlwdf of]hgf tof/L÷k|:tfj n]vg ljlw tkfO{nfO{ kof{Kt lyof] < s_ lyof] v_ lyPg
u_ sfo{ljlwdf of]hgf sfof{Gjog ljlw tkfO{n] j'em\g] vfnsf] lyof] < s_ lyof] v_ lyPg
3_ sfo{ljlwdf of]hgf tof/L÷k|:tfj n]vg ljlw tkfO{nfO{ kof{Kt lyof] < s_ lyof] v_ lyPg

!$= lyPg eg] s] s'/f tkfO{n] s] s'/f j'em'g' ePsf] lyPg <

s_ of]hgf tof/L÷k|:tfj n]vg ====================================================================================

v_ of]hgf sfof{Gjog================================================================================================
u_ cg'udg, d'NofÍg=====================================================================================================

!%= cg'bfg, ;xof]u k|fKt ug]{ of]hgf ÷k|:tfj 5gf}6 k|s[of slQsf] ;fGble{s lyof] <

S_ Psbd ;fGble{s v_ ;fGble{s u_ ;fGble{s lyPg

cf_ sfo{bIftf - Efficiency)
!^= tkfO{n] k|fKt u/]sf] cg'bfg, ;xof]usf] pb]Zo / k|sf/ jf/] lgDg s'/f jtfO{lbg'xf];_

k|sf/
gub ;fdu|L
pb]Zo
kfPsf] ;fdu|L -
kfPsf] ldlt kfPsf] /sd -?_ kfPsf] ldlt
;+Vof_
ufO{, e};L kfng
b'w ;+sng
b'w lr:ofg
b'w k|;f]wg
86
 k|sf/
gub ;fdu|L
pb]Zo
kfPsf] ;fdu|L -
kfPsf] ldlt kfPsf] /sd -?_ kfPsf] ldlt
;+Vof_
8]/L jhf/Ls/0f
cGo v'nfpg'xf];

!&= cg'bfg, ;xof]udf ;~rflnt sfo{qmdx? clxn] klg rfn' 5g\ < s_ 5g\ v_ 5}gg\

!*= gePsf] eP lsg < sf/0f jtfpg'xf];

==============================================================================================================================================
==============================================================================================================================================
==========
!(= tkfO{n] ;Dem\of}tfdf ePsf ;j} k|fjwfgx? k'/f ug'{eof] < s_ u/] v_ ul/g

@)= gu/]sf] eP s] s] ug'{ ePg / lsg <

;Dem\of}tfdf ePsf] t/ k'/f gu/]sf sf/0fx?

k|fjwfgx?

@!= tkfO{sf] cfDbfgL vr{sf] ljj/0f /fVg] -n]vf_ ljlw÷kBtL 5< s_ 5 v_ 5}g

@@+ eP tkfO{n] g]kfn ;/sf/sf] rfn' n]vf k|0ffnL ckgfpg' ePsf] 5 < s_ 5 v_ 5}g

@#= tkfO{n] jflif{s cfDbfgL vr{sf] cl86 ug]{ ug'{ePsf] 5< s_ 5 v_ 5}g

@$= tkfO{n] ;~rfng ug]{ eg]sf] of]hgf ;Dem\of}tfdf pNn]v ePsf] /sdn] ;DkGg eof] <

s_ eof] v_ ePg

@%= gePsf] eP sf/0f jtfpg'xf]; .

==============================================================================================================================================
==============================================================================================================================================
==========

@^= tkfO{n] ;Dem\of}tfdf pNn]v ePsf] /sdn] sfo{ ;DkGg ug{ g;Sgfsf] sf/0f lnlvt ?kdf
/fVg'ePsf]5<

s_ 5 v_ 5}g

87
@&= gePsf] eP lsg lnlvt sf/0fx?sf] b:tfj]h /fVg'ePg <
==============================================================================================================================================
==============================================================================================================================================

@* of]hgf ;~rfng ug{sf nflu cg'bfg÷;xof]u / tkfO{sf] cfkm\gf] nufgLsf] cg'kft s] lyof]<

-*)M@), %)M%) cfbL_ ==============================================

@(= z'?df ;Dem\of}tf ubf{sf] j]nfdf pNn]v ePsf lqmofsnfkx? sfof{Gjog r/0fdf kl/jt{g ePsf lyP<

s_ lyP v_ lyPgg

#)= kl/jt{g ug'{kgf{sf sf/0fx? jtfpg'xf];\ .

==============================================================================================================================================
==============================================================================================================================================

#! tkfO{sf] ljrf/df kl/jt{g ug'{kgf{sf sf/0fx? ;fGble{s lyP <

==============================================================================================================================================
==============================================================================================================================================
==========================================================================================
#@= ;Dem\of}tf cg';f/sf] /sdn] sfo{qmd sfof{Gjog ug{ gk'u]sf] eP gk'u /sdsf] Joj:yf s;/L ug'{eof]
<

-s_ C0f v_ ;fk6L u_ cfkm\g} nufgL 3_ cGo -v'nfpg]_

##= ;Dem\of}tf cg';f/sf] sfo{qmdx? tf]lsPs} ;dodf ;DkGg eof] < s_ eof] v_ ePg

#$= gePsf] ePsf] lsg< sf/0f jtfpg'xf];\ .

==============================================================================================================================================
==============================================================================================================================================

#%= k|fKt cg'bfg÷;xof]u s;/L pkof]u ug'{eof] <

s_ ;+:yf cfkm}n] sfof{Gjog u/]sf] v_ ;b:ox?nfO{ ljt/0f u/]sf] u_ ;bZox?nfO{ C0f lbPsf]

#^= tkfO{n] k|fKt ug]{ elgPsf] cg'bfg÷;xof]u slt ls:tfdf k|fKt ug'{ eof] < ============================
ls:tf
#&= tkfO{n] k|fKt ug]{ elgPsf] cg'bfg÷;xof]u ;lhn} kfpg' eof] < s_ kfP v_ kfO{g

#*= ;lhn} gkfPsf] eP s] slQsf] ck7]/f] k/\of] <

s_ Psbd ck7]/f] v_ s]lx ck7]/f] u_ vlr{nf]

#(= ls:tf k|fKt ug{ lgj]bg u/]sf] lbg b]lv slt ;do nfUof] < ===================== lbg
88
$)= tkfO{n] sfo{qmd sfof{Gjog ug]{ qmddf s;}jf6 ;'emfjx? kfpg'eof] <

s_ kfP v_ kfO{g

$!= kfPsf] eP s;jf6 s] jf6 ;'emfjx? k|fKt ug'{ eof] <

;+:yf k|fKt ;'emfjx?

lhNnf kz';]jf sfof{no
;xsf/L ljefu÷sfof{no
Pg=l8=P÷l8=cfO=P
/fli6|o b'Uw ljsf; jf]8{
/fli6|o÷cGt/fli6|o u};;
l;l8Sofg
cGo -v'nfpg'xf];_===========================

$@= tkfO{nfO{ of] cg'bfg÷;xof]u sfo{qmd slQsf] nfeu|fxL d}qL kfpg' eof] <

s_ Psbd nfeu|fxL d}qL v_ s]lx nfeu|fxL d}qL u_ em0eml6nf]

$#= tkfO{ sfo{qmdsf] cg'udg÷d'NofÍgdf ;xefuL x'g'eof] < s_ eP v_ eO{g

$$= gePsf] eP lsg < sf/0f jtfpg'xf];\ .============================================================

$%+= of] sfo{qmdjf6 slt dflg;n] k|ToIf / sltn] ck|ToIf /f]huf/L k|fKt u/] <

s_ k|ToIf /f]huf/L ;+Vof============================== v_ ck|ToIf /f]huf/L ;+Vof===================================

$^=tkfO{nfO{ of] cg'bfg÷;xof]u sfo{qmd slQsf] bIftfsf ;fy sfof{Gjog ePsf] nfUof] <

s_ Psbd bIf -s'zntf_ v_ bIf -s'zntf_ u_ bIf 5}g -:t/Lo 5}g_

O{ k|efjsf/Ltf / k|efj
$&= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qsf] ljsf;df s] s] ;'wf/x? cfP <
s_ ufO{ e}l; kfngdf ;'wf/ v_ b'w jhf/Ls/0fdf ;'wf/ u_ b'wsf] u'0f:t/df ;'wf/
3_ cGo -v'nfpg'xf];_==

$*= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qdf s] s] kl/jt{gx? cfP <

S_ b'wsf] pTkfbgdf j[l4 v_ ufO{ e};Lsf] ;+Vof j[l4 u_ ufO{ e};Lsf] s'n ;+Vof / b'w lbg] ufO{
e};Lsf] ;+Vofsf] cg'kftdf ;'wf/ 3_ ufO{ e}l;sf] pTkfbsTjdf j[l4 ª_ 3/fo;L cfDbfgLdf j[l4 r_
cGo -v'nfpg'xf]; _

$(= of] cg'bfg÷;xof]u sfo{qmdjf6 cg'bfg÷;xof]u k|fKt ug]{x?sf] hLjgkBtLdf kl/jt{g cfPsf] 5 <

89
s_ cfPsf] 5 v_ 5}g

%)= cfPsf] eP s'g If]qdf kl/jt{g b]Vg'ePsf] 5 <

s_ :jf:Yo v_ lzIff u_ kfl/jfl/s cfDbfgL 3_ pkef]u ª_ ;DklQ

r_ dgf]/~hg 5_ cGo -v'nfpg'xf]; _ .

%!= of] cg'bfg÷;xof]u sfo{qmdjf6 8]/L If]qdf s] s:tf cj;/÷;Defjgfx? b]lvPsf5g\ <

s_ ufO{ e};Lsf] ;+Vof j[l4 x'g] v_ b'w / b'Uw kbfy{sf] jhf/ j[l4 u_ b'Uw kbfy{sf] ljljlws/0f
3_ b'Uw kbfy{sf] u'0f:t/df clej[l4 ª_ dlxnfx?sf] e'dLsfdf ljljlws/0f r_ ljljlws/0f 3_
cGo -v'nfpg'xf]; _ .

%@= of] cg'bfg÷;xof]u sfo{qmd slQsf] k|efjsf/L ePsf] kfpg'eof] <

s_ clt k|efjsf/L v_ k|efjsf/L u_ k|efjsf/L gePsf]

O{_ bLuf]kgf

%#= ut jif{ clwNnf] jif{sf] t'ngfdf tkfO{÷tkfO{sf] ;+:yfsf] cfDbfgL j9]sf] 5<

S_ 5 v_ 5}g u_ yfxf 5}g

%$= tkfO{n] cfkm\gf]÷;+:yfsf] cfDbfgL j9fpg s] s] sfd ug'{eof] <

S_ bfqL lgsfodf k|:tfj k]; u/]sf] v_ cfkm\g} Joj;fo ;~rfng u/]sf] u_ jrt C0f
;~rfng
3_ ;fk6L lnPsf] ª- cGo -v'nfpg'xf]; _ .

%%= tkfO{÷tkfO{sf] ;+:yfn] ;~rfng u/]sf sfo{qmdx? jfXo ;xof]u ljgf klg ;~rfng ug{ ;Sg'x'G5 <

s_ ;S5' v_ ;lSbg u_ yfxf 5}g

%^= ;~rflnt sfo{qmd sfof{Gjog ug{ tkfO{÷;+:yf ;+u k'Ubf] cfly{s ;|f]t, 1fg, ;Lk 5 <

s_ 5 v_ 5}g

%&= 5}g eg] tL ;|f]t / ;fwg sxfFjf6 k|fKt ug'{x'G5<

;xof]usf] k|sf/ ;|f]t
ljlQo
Dffgj;d;fwg
k|fljlws
jhf/Ls/0f
cGo -v'nfpg'xf];-

%*= tkfO{ cfkm'nfO{ cfj:os kg]{ ;xof]u k|fKt ug{ g;Sg] eP lsg < sf/0f v'nfpg'xf];.
==============================================================================================================================================
90
==============================================================================================================================================
==========

%(= tkfO{sf] j/k/ lhNnf÷ufpFdf o:t} cg'bfg÷;xof]u lbg] ;+:yfx? ePsf] yfxf kfpg'ePsf] 5<

s_ 5 v_ 5}g u_ yfxf 5}g

^)= olb 5g eg] pgLx?n] lbg] cg'bfg÷;xof]u / tkfO{n] k|fKt u/]sf] cg'bfg÷;xof]usf] ljlw / k|s[of
km/s 5 <

s_ 5 v_ 5}g u_ yfxf 5}g

^!= of] cg'bfg÷;xof]u sfo{qmd lg/Gt/ rNg] ÷bLuf] /xg] s'/fdf tkfO{nfO{ s:tf] nfU5 <

s_ clt bLuf] x'G5 v_ bLuf] x'G5 u_ bLuf] x'b}g

^@= cg'bfg÷;xof]u lbg] ;+:yfsf] ;sf/fTds / gsf/fTds kIfx? s] s] 5g\ <

s_
;sf/fTdsM==============================================================================================================================
v_ =gsf/fTdsM =======================================================================================================================

^#= cg'bfg÷;xof]u lbg] ;+:yfsf] ;j} eGbf ;sf/fTds kIfx? s] s] 5g\ <
==============================================================================================================================================
==============================================================================================================================================
==========

^$= cg'bfg÷;xof]u lbg] ;+:yfsf] ;j} eGbf gsf/fTds kIfx? s] s] 5g\ <
==============================================================================================================================================
==============================================================================================================================================
==========

^%= of] cg'bfg÷;xof]u sfo{qmdnfO{ ;'wf/ ug{ tkfO{sf ;'emfjx? s] 5g\< -gLltut, lgb]{lzsf, of]hgf
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91
 g]kfndf 8]/L If]qdf lbO{Psf] cg'bfg tyf cGo ;xof]ux?sf] k|efj d'NofÍg
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d'Vo ;'rgfbftfsf] cGtjftf{sf] nflu r]slni6 -b'Uw ljsf; jf]8{, lhNnf tyf s]Gb|Lo b'Uw pTkfbs ;xsf/L ;+3,
lhNnf kz';]jf sfof{no, Pkm=Pg=l;=l;=cfO{ sf k|ltlglwx?jf6 lng] _
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!= tkfO{sf] lhNnf jf If]qdf 8]/L If]qsf] ljsf;sf nflu cg'bfg÷;xof]u ug]{ ;+:yfx? 5g\ < 5g eg] gfd
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s:tf5g\ < jtfO{lbg'xf];\ .
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%= 8]/L If]qdf cg'bfg÷;xof]u k|bfg ug]{ ;+:yfx?sf] cg'bfg k|bfg ug]{ cfwf/x? s] s] 5g\< s] leGg leGg
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^= tkfO{sf] ljrf/df cg'bfg÷;xof]u k|fKt ug]{x? s:tf 5g\ < s] k|fKt ug'{kg]{n] g} cg'bfg÷;xof]u kfPsf 5g\ <
jf 5gf}6 ePsfx? ;flRrs} cg'bfg÷;xof]u k|fUt ug{ nfos 5g\ < jf kx'Frsf] e/df .
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bIftfsf ;fy sfof{Gjog ePsf5g\ <
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*= pknAw u/fO{Psf] cg'bfg÷;xof]un] ufO{ e};L kfng jf cGo 8]/L Joj;fo ug{sf] nflu cj;/x? l;h{gf
ePsf5g\ < 5g\ eg] s] s] cj;/ 5g\ < / tL cj;/x?sf] pkof]u u/L s[ifs jf pBdLx?sf] cfly{s tyf
;fdflhs ljsf;df s;/L ;'wf/ ePsf] 5 <
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(= s] k|fKt ePsf] cg'bfg÷;xof]un] s[ifs tyf pBfdLx?sf] ljsf;df ;xof]u u/]sf] 5 < h:t} cfly{s ;fdflhs,
b'w pTkfbg, b'wsf] pTkfbsTj, kfl/jf/Ls cfDbfgL, ufO{ e};Lsf] s'n ;+Vof / b'w lbg] ufO{ e};Lsf] ;+Vofsf] cg'kft
j[l4 , b'w pTkfbg Ifdtf clej[l4 cfbL .
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92
=========================================================================================================================================================
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cfbL df s:tf] kl/jt{g cfPsf] 5< tkfO{sf] ljrf/df ;j}eGbf eGg nfossf] kl/jt{g s] xf] <
=========================================================================================================================================================
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!!= nfeu|fxLx?n] of] cg'bfg÷;xof]u sfo{qmdnfO{ slQsf] ;sf/fTds ?kn] x]b{5g\ < pgLx?sf] gh/df cg'bfg÷
;xof]usf] ;j}eGbf ;sf/fTds / gsf/fTds kIfx? s] s] x'g < pgLx? s] eG5g\ <
=========================================================================================================================================================
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!@= tkfO{sf] cWoogdf s'g ;+:yfn] k|bfg u/]sf] cg'bfg÷;xof]u j9L ;fGble{s, s'zntf÷bIftf, k|efjsf/Ltf /
bLuf]kgf ePsf] b]lvPsf] 5< jtfO{lbg'xf]; .
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!#= tkfO{sf] ljrf/df cg'bfg÷;xof]u k|bfg ug]{ ;+:yfx? jLr k|ltkbf{ /x]sf] 5< 5 eg] s] s'/fdf k|lt:kbf{ 5< s]
Tof] k|lt:kbf{n] nfeu|fxLnfO{ kmfO{ k'U5 < k'U5 jf k'Ub}g eg] s;/L<
=========================================================================================================================================================
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!$= cg'bfg÷;xof]u k|bfg ug]{ ;+:yfx?sf] sdhf]/Lx? s] s] 5g\ <
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!%= cg'bfg÷;xof]u sfo{qmdsf ;sf/fTds÷;jn kIfx? s] s] x'g\ <
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!^= b'w / b'Uw kbfy{sf] pTkfbg j[l4 ug{ xfn e} /x]sf cg'bfg÷;xof]u sfo{qmddf s] s] ;'wf/ ug'{ knf{ < tkfO{sf
;'emjx? eGg'xf]; .
s_ gLlt tyf lgb]{lzsf
v_ ;+/rgf lgdf{0f
u_ sfof{Gjog
3_ cg'udg, d'NofÍg .

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cGtjftf{ lng]sf] gfd==================================================== x:tfIf/ ldltM @)&%÷!÷

93
 g]kfndf 8]/L If]qdf lbO{Psf] cg'bfg tyf cGo ;xof]ux?sf] k|efj d'NofÍg

/fli6|o b'Uw ljsf; jf]8{ tyf g]kfn jftfj/0f ;+/If0f s]Gb|

s]GbLt ;d'x 5nkmnsf] nflu r]slni6 -b'Uw pTkfbs ;xsf/L ;+:yfsf ;b:ox? lng] _
k|b]z=========================================lhNnfM================================== :yfgM======================
ldlt===============================
;xeflux?sf] gfdfjnL
qm=; gfd ;+:yf kb s}lkmot
1

!= tkfO{n] tkfOsf] j/k/ b'Uw If]qsf] ljsf;sf] nflu cg'bfg÷;xof]u x'G5 eGg] s'/f ;'Gg' ePsf] 5< 5 eg] o:tf]
cg'bfg÷;xof]u s;}n] lnPsf] jf/] hfgsf/L 5 jf tkfO{n] klg lng' ePsf] 5< 5 eg] s] lnPsf5g\ jf k|fKt ug'{
eof] . s;n] lbof] <
=========================================================================================================================================================
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@= cg'bfg÷;xof]u kfO{G5 eGg] s'/fsf] hfgsf/L sxfFjf6 k|fKt ug'{ eof] < cg'bfg÷;xof]u k|fKt ug]{ dfkb08 s] s]
x'g yfxf 5< tkfO{ jf c?n] lnPsf] eP s;/L lng' eof]÷lnP<
=========================================================================================================================================================
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#= k|fKt ePsf] cg'bfg÷;xof]u cfj:ostfdf cfwfl/t lyof] < jf h] kfO{of] t]lx lnO{of] <
=========================================================================================================================================================
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$= Tof] cg'bfg÷;xof]u lng' eGbf klxn] ;d'xdf j;]/ s] ug]{, s;/L ug]{ eGg] jf/] 5nkmn ePsf] lyof] ls lyPg<
ls cg'bfg÷;xof]usf] jf/]df ;d'xsf ;b:onfO{ hfgsf/L lyof] pxfF g} uP/ lgj]bg lbO{ cg'bfg÷;xof]u Nofpg'
eof] <
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94
%= cg'bfg÷;xof]u lng] ljlw / k|s[of s] /x]5 < jf dfkb08 s] s] /x]5g\ < ljlw, k|s[of / dfkb08 jf/]
jtfO{lbg'xf]; .
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^= tkfO{sf] b]vfO{df s;n] cg'bfg÷;xof]u kfPsf 5g\ < s] kfpg} kg]{n] kfPsf 5g\ < jf kx'Frjfnfn] dfq
kfPsf5g\ <
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&= k|fKt cg'bfg÷;xof]u tkfO{÷nfeu|fxLx?n] s;/L pkof]u u/]sf5g\ < s] cg'bfg÷;xof]u sfo{qmd k|efjsf/L /
s'zntf÷bIftfsf ;fy sfof{Gjog ePsf5g\ < jf ePsf] 5<
=========================================================================================================================================================
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*= pknAw u/fO{Psf] cg'bfg÷;xof]un] ufO{ e};L kfng jf cGo 8]/L Joj;fo ug{sf] nflu cj;/x? l;h{gf ug{
;kmn ePsf5g\ < 5g\ eg] s:tf cj;/x? k|fKt ePsf 5g\ < / tL cj;/x?sf] pkof]u u/L tkfO{÷s[ifs jf
pBdLx?sf] cfly{s tyf ;fdflhs ljsf;df s;/L ;'wf/ ePsf] 5 <
=========================================================================================================================================================
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(= s] k|fKt ePsf] cg'bfg÷;xof]un] s[ifs tyf pBfdLx?sf] ljsf;df ;xof]u u/]sf] 5 < h:t} cfly{s ;fdflhs,
b'w pTkfbg, b'wsf] pTkfbsTj, kfl/jf/Ls cfDbfgL, ufO{ e};Lsf] s'n ;+Vof / b'w lbg] ufO{ e};Lsf] ;+Vofsf] cg'kft
j[l4 , b'w pTkfbg Ifdtf clej[l4 cfbL .
=========================================================================================================================================================
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!)= cg'bfg÷;xof]u sfo{qmdn] ;fdflhs ljsf; h:t} :jf:Yo, lzIff, ;/;kmfO{, dlxnfx?sf] e'dLsfdf kl/jt{g
cfbL df s:tf] kl/jt{g cfPsf] 5< tkfO{sf] ljrf/df ;j}eGbf eGg nfossf] kl/jt{g s] xf] <
=========================================================================================================================================================
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!!= cg'bfg÷;xof]u sfo{qmdnfO{ nfeu|fxLx?n] s;/L j'em]sf5g\ < s] pgLx? of] cg'bfg÷;xof]u sfo{qmdnfO{
;sf/fTds ?kn] x]b{5g\ < pgLx?sf] b[li6sf]0fdf cg'bfg÷;xof]usf] ;j}eGbf ;sf/fTds / gsf/fTds kIfx? s] s]
x'g < pgLx? s] eG5g\ <
!@= tkfO{sf] ljrf/df cg'bfg÷;xof]u k|bfg ug]{ ;+:yfx? jLr k|ltkbf{ /x]sf] 5< 5 eg] s] s'/fdf k|lt:kbf{ 5< s]
Tof] k|lt:kbf{n] nfeu|fxLnfO{ kmfO{bf k'U5 < k'U5 jf k'Ub}g eg] s;/L<
=========================================================================================================================================================
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!#= tkfO{sf] cWoogdf s'g ;+:yfn] k|bfg u/]sf] cg'bfg÷;xof]u j9L ;fGble{s, bIftf, k|efjsf/Ltf / bLuf]kgf
ePsf] b]lvPsf] 5< jtfO{lbg'xf]; .
=========================================================================================================================================================
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!$= cg'bfg÷;xof]u k|bfg ug]{ ;+:yfx?sf] sdhf]/Lx? s] s] 5g\ <
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!%= cg'bfg÷;xof]u sfo{qmdsf ;sf/fTds÷;jn kIfx? s] s] x'g\ <
=========================================================================================================================================================
95
=========================================================================================================================================================
=========================================================================================================================================================

!^= b'w / b'Uw kbfy{sf] pTkfbg j[l4 ug{ xfn e} /x]sf cg'bfg÷;xof]u sfo{qmddf s] s] ;'wf/ ug'{ knf{ < tkfO{sf
;'emjx? eGg'xf]; .
s_ gLlt tyf lgb]{lzsf
v_ ;+/rgf lgdf{0f
u_ sfof{Gjog
3_ cg'udg, d'NofÍg .

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5nkmn gf]6stf{sf] gfd==================================================== x:tfIf/ ldltM @)&%÷!÷

ANNEX: 2 LIST OF KEY INFORMANTS INTERVIEWED

96
Project: Impact of Dairy Sector Support and Subsidy in Nepal
SN District Name Office Position
1 Kabre Raghunath Gautam Deurali Sahakari Conveyor
2 Kabre Paban KC Panautti UMP Technician
Asst.
3 Kabre Deepak Dhodari Setidevi MPC Manager
4 Kabre Bala Ram Koirala District Cooperative Union Manager
5 Sindhupalchowk Arjun Khadka DLSO JT
6 Sindhupalchowk Bhim Pd Dulal District Cooperative Union Member
Office
7 Sindhupalchowk Kalyan Kumar Shrestha DLSO Incharge
8 Sindhupalchowk Sanjaya Lama DLSO JT
9 Dolkha Dhan Bdr Tamang Samarparn Cooperative Manager
Milk Production and
10 Dolkha Pradeep Sibakoti Processing Center Manager
Board
11 Dolkha Sushila Tamang Samarpan Dairy Member
12 Dolkha Naba Raj Dahal DLSO JT
Office
13 Kaski Purusottam Tripathi DLSO Incharge
14 Kaski Gyanendra Bajgain NDA Member
15 Kaski Chudamani Adhikari Nagdhunga MPC Chairperson
16 Kaski Shivahari Acharya Himal Dairy Udhyog Propritor
17 Chitwan Kopila Rimal DMPCU Manager
18 Chitwan Harihar Subedi Krishnagopal MPC Chairperson
19 Chitwan Chetnarayan Kharel DLSO Vet Officer
Livestock
20 Chitwan Santosh Ghimire DLSO Dev. Officer
21 Ilam Chandra Bdr. Rai Ilam Lalipup Propritor
22 Ilam Pashupati Dhungana DLSO Officer
23 Ilam Umesh Mahat Mahat Krishi Tatha Gai Farm Propritor
Kanchanjangha Cheese
24 Ilam Angrita Sherpa Udhyog Manager
25 Surkhet Asok Rawal DLSO Na. Su
26 Surkhet Bindeshwor Yadhav DLSO JT
27 Surkhet Saroswoti Thapa Laxmi Dairy Udhyog Manager
28 Surkhet Prem Prasad Rijal Bhagwati Dairy Udhyog Manager
Livestock
29 Sarlahi Sunil Kumar Mahato DLSO Dev. Officer
Livestock
30 Dhanusha Sunil Kumar Yadhav DLSO Dev. Officer
31 Sarlahi Umakanta Jha MPC Chairperson
32 Dang Shreedhar Pandey Pandey Dairy Propritor
33 Dang Khem Raj Ghimire Lamahi Dairy Manager
34 Dang Sharada Sharma Hey Krishi Gai Farm Propritor

97
 35 Dang Sakar Khadka A. Sau. Ga Farm Manager
36 Rupandehi Suraj Bhurtel Annapurna Namuna Gai Farm Member
37 Rupandehi Gunakhar Bhurtel Shiva Kalyan MPC Manager
38 Rupandehi Durga Prasad Neupane Durga Dairy Farm Manager
39 Rupandehi Bijaya Sapkota Sivaganga MPC Manager
Planning
40 Kailali Bhupendra Bdr. Singh DLSO Officer
41 Kailali Bhuban Pathak DMPCU Secretary
42 Kailali Padam Bdr Raule DLSO JT
Shanti Nepal Sana Kisan
43 Kailali Naresh Baral Sahakari Sanstha Chairperson
Planning
44 Bardiya Bharat Lamsal DLSO Officer
Ramesh Narayan
45 Bardiya Lamichhane Aadishakti MPC Secretary
46 Bardiya Nava Raj Dhakal Aarogya Dairy Manager
47 Morang Devi Pd Rimal DMPCU Chairperson
48 Morang Harinarayan Yadhav DLSO Vet Officer
49 Morang Hira Prasad Neupane Batiyama Cooperative Ltd Manager
50 Dhanusha Ramsaran Mahato MPC Chairperson
51 Dhanusha Arjun Ghimire DLSO JT
52 Dhanusha Barun Kumar Mandal DLSO Vet Officer
53 Rasuwa Sonam Nurpu Ghale Fulum Sahakari Chairperson
54 Rasuwa Sangita Tamang Bholmandhu Propritor
55 Rasuwa Chhebang Dorje Sanakisan Sahakari Sanstha Propritor
56 Dadeldhura Kama Singh Airi Masto Gai Bhaisi Palan Farm Chairperson
Planning
57 Dadeldhura Khadga Bdr Saha DLSO Officer
58 Dadeldhura Bishnu Raj Bhatta Ugratara Pasupalan Samuha Secretary

ANNEX: 3 LIST OF FOCUS GROUP DISCUSSION (FGD) PARTICIPANTS

Project: Impact of Dairy Sector Support and Subsidy in Nepal

98
Annex: List of Focus Group Discussion Participants
SN Name Organization Position Remarks
District: Sarlahi
1 Ritesh Choudhary Malangawa MPC Chairperson
2 Shekhar Dash Malangawa MPC Secretary
3 Pashupati Rajat Malangawa MPC Member
4 Pratap Dash Malangawa MPC Member
5 Chetan Madal Malangawa MPC Member
6 Bishnu Kumari Choudhary Malangawa MPC Member
7 Bindeshwor Dash Malangawa MPC Member

SN Name Organization Position Remarks

District: Dhanusha
1 Binod Mahato Nandini Dairy Udhyog Propritor
2 Rameshwor Mahato Nandini Dairy Udhyog Member
3 Ritesh Choudhary Nandini Dairy Udhyog Member
4 Lalit Choudhary FUC Member
5 Bhairab Dash Bachat Rin Sahakari Member
6 Mangalesh Gupta Bachat Rin Sahakari Member

SN Name Organization Position Remarks

District: Surkhet
1 Deepa Poudel (Gautam) Kare Khola MPC Manager
2 Sarala Poudel Kare Khola MPC Staff
3 Thum Lal Sharma Kare Khola MPC Marketing Manager
4 Min Prasad Kandel Kare Khola MPC Marketing Manager
5 Lok Raj Poudel Kare Khola MPC Member
6 Top Lal Lamichhane Kare Khola MPC Member
7 Khagendra Lamichhane Kare Khola MPC Member
8 Chudamani Lamichhane Kare Khola MPC Member
9 Jeevan Khadka Kare Khola MPC Member

SN Name Organization Position Remarks

District: Kabre
1 Narayan Pd. Badaal DMPCU Chairperson
2 Raghunath Gautam DMPCU Member
3 Surendra Sapkota DMPCU Member
4 Shiva Pd Dhakal DMPCU Member
5 Bed Pd. Dhakal DMPCU Member
6 Deepak Pd Timilsina DMPCU Member
7 Kumar Pd Lamichhane DMPCU Member

SN Name Organization Position Remarks

District: Rasuwa
99
 Hamro Multipurpose
1 Rebati Prasad Poudel Cooperative Limited Chairperson
Hamro Multipurpose
2 Gobinda Pd Poudel Cooperative Limited Member
Hamro Multipurpose
3 Rebati Awasti Cooperative Limited Member
Hamro Multipurpose
4 Bidhya Neupane Cooperative Limited Member
Hamro Multipurpose
5 Devi Dutta Ghimire Cooperative Limited Member
Hamro Multipurpose
6 Uddhav Risal Cooperative Limited Member
Hamro Multipurpose
7 Bhabanath Poudel Cooperative Limited Member
Hamro Multipurpose
8 Shanker Neupane Cooperative Limited Member
Hamro Multipurpose
9 Balaram Dhakal Cooperative Limited Member

SN Name Organization Position Remarks

District: Dolkha
Milk Production and
1 Lal Kumar KC Processing Center Chairperson
Milk Production and
2 Ishwori Pd neupane Processing Center Member
Milk Production and
3 Keshab Sharma Nirola Processing Center Member
Milk Production and
4 Subas Pd. Bhattarai Processing Center Member
Milk Production and
5 Dawal Pandey Processing Center Member
Milk Production and
6 Shanta Bdr. Upreti Processing Center Member
Milk Production and
7 Rajib Khanal Processing Center Member

SN Name Organization Position Remarks

District: Sindhupalchowk
1 Lila nath Dahal Baguwa Sahakari Chairperson
2 Bhim Pd. Dulal Baguwa Sahakari Manager
3 Gobinda Basnet Baguwa Sahakari Member
4 Ambika Khadka Baguwa Sahakari Member
5 Chetana Timilsena Baguwa Sahakari Member
6 Pashupati Dahal Baguwa Sahakari Member
7 Prem Chapagain Baguwa Sahakari Member
8 Kedar Ghorasaini Baguwa Sahakari Member

100
SN Name Organization Position Remarks
District: Kailali
1 Chet Raj Bhandari DMPCU Chairperson
2 Harka Bdr Chand DMPCU Vice Chairperson
3 Bhuwan Pathak DMPCU Secretary
4 Ram Bdr BK DMPCU Member
5 Chakra Bdr Mahara DMPCU Member
6 Jaya Bdr Pal DMPCU Member
7 Janaki Bam DMPCU Member
8 Radheshyam Rana DMPCU Member

SN Name Organization Position Remarks

District: Bardiya
1 Paban Kumar Yadhav Aadishakti MPC Chairperson
2 Radha Poudel Aadishakti MPC Vicechairperson
3 Khem Narayan Lamichhane Aadishakti MPC Secretary
4 Jayashwor Risal Aadishakti MPC Tresurer
5 Dilli Ram Bhattarai Aadishakti MPC Member
6 Lal Bdr Rana Aadishakti MPC Member
7 Tej Narayan Poudel Aadishakti MPC Member
8 Krishna Oli Aadishakti MPC Member

SN Name Organization Position Remarks

District: Dedeldhura
Shiva Shakti Pashu Bikash
1 Dhan Bdr. Budha MPC Chairperson
Shiva Shakti Pashu Bikash
2 Sangita Thapa MPC Vice-chairperson
Shiva Shakti Pashu Bikash
3 Janaki Bhattarai MPC Secretary
Shiva Shakti Pashu Bikash
4 Man Bdr Budha MPC Tresurer
Shiva Shakti Pashu Bikash
5 Bishnu Pd Bhatta MPC Member
Shiva Shakti Pashu Bikash
6 Chandra Dev Kunwar MPC Member
Shiva Shakti Pashu Bikash
7 Rambha Budha MPC Member
Shiva Shakti Pashu Bikash
8 Parbati Airi MPC Member
101
SN Name Organization Position Remarks
District: Chitwan
1 Indra Prasad Poudel DMPCU Chairperson
2 Rishi Ram Poudel DMPCU Vice-chairperson
3 Jwrilal Sapkota DMPCU Member
4 Sujan Raj Pokharel DMPCU Member
5 Jeevan Lal Raut DMPCU Member
6 Sita Bhandari DMPCU Member
7 Tulsa Regmi DMPCU Member
8 Sita Khanal DMPCU Manager

SN Name Organization Position Remarks

District: Morang
1 Megh Raj Sangraula Belepur MPC Chairperson
2 Basudev Ghimire Belepur MPC Vice-chairperon
3 Ganga Prasad Khatiwada Belepur MPC Member
4 Hari Pd Regmi Belepur MPC Member
5 Yaga Prasad Poudel Belepur MPC Member
6 Bir Bahadur Neupane Belepur MPC Member
7 Nanda Krishna Shrestha Belepur MPC Member

SN Name Organization Position Remarks

District: Rupandehi
1 Nar Prasad Khanal Annapurna Gai Farm Chairperson
2 Devi Pd Bhusal Annapurna Gai Farm Vice-chairperson
3 Harka Bdr Thapa Annapurna Gai Farm Member
4 Shyam Kharel Annapurna Gai Farm Member
5 Laxman neupane Annapurna Gai Farm Member

SN Name Organization Position Remarks

District: Dang
1 Dinesh Sharma Hey Rishi Gai Farm Chairperson
2 Sharada Sharma Hey Rishi Gai Farm Vice-chairperson
3 Sandesh Sharma Hey Rishi Gai Farm Tresurer
4 Bindesh Sharma Hey Rishi Gai Farm Manager

SN Name Organization Position Remarks

District: Kaski
102
 1 Chuda mani Adhikary Nagdanda MPC Chairperson
2 Indra Prasad Adhikary Nagdanda MPC Member
3 Chiranjibi Poudel Nagdanda MPC Member
4 Moti Lal Poudel Nagdanda MPC Member
5 Chandra Kanta Adhikary Nagdanda MPC Member
6 Mukti Ram Poudel Nagdanda MPC Member
7 Chhabilal Adhikary Nagdanda MPC Member
8 Yam Prasad Adhikary Nagdanda MPC Manager

ANNEX: 4 KEY INFORMANTS' SURVEY INFORMATION

Strength of the subsidy and support

 Release money as per contracted amount

 Diversification in social, technical and financial matters
 Investment in the production sector
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  Teaches and motivate for commercialization
 Emphasis on the innovation
 Encourage the farmers in livestock and dairy sector
 Improvement in production and quality of milk
 Assist in dairy product diversification
 Promote groups and cooperatives in milk production and product diversification
 Increase in lactating cattle and buffaloes
 Add step in self-sufficiency in agriculture
 Increase social awareness, increase income, increase awareness in health and education
 Initiative towards making self-sufficient in dairy products

Weakness of support and subsidy

 Poor information dissemination

 Tedious process (time consuming, sometimes decision done only after appropriate time over)
 No continuity in the activities
 Weak monitoring and evaluation
 Subsidy/support very less and not possible to good performance
 Poor coordination among and between the government agencies
 Cannot accommodate the off-farm activities
 Complicated guideline and difficult to understand (need other consultant to know the provisions)
 Only get by the influential persons/institutions
 Only provided to the institutions not to the individual farmers
 Increased dependency
 Misused of subsidy/support (not properly used, sometimes recipient selection is not done
appropriately). Received by those who have access to decision making authority.
 Poor monitoring
 Tedious process (time consuming, sometimes decision done only after appropriate time over)
 Smell of corruption (financial transaction in sanctioning subsidy/support)

 Approve very less amount compared to required and project not complete
 No action taken who is not following the contract and no work done after signing the contract

Impact of the subsidy and support

Technical Changes
 Increased technical and managerial capacity of dairy farmer
 Increased financial, institutional and marketing capacity of the dairy farmers institutions
 Increased income, no need to for foreign employment
 Commercial orientation towards milk production at rural areas
 Women empowerment and diversification of women role
 Comfortable livelihood as generated employment at local level
 Increased number of high productivity dairy animals, shed improvement
 Expansion of dairy industries, modernization and product diversification

Social changes

 Increased sanitation (personal, domestic and environmental), increased access to health care and
treatment
 Increased awareness, income generation among the women and economic self-reliance
 Utilization of modern materials and equipment
 Increased social status of women
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  Formation of women cooperatives and develop women entrepreneurship
 Increased household income.
 Increased access to quality child education

Suggestions for improvement

Policy and guideline

 Provision of reward and punishment to the subsidy/support receiver

 Accommodate other farmers/ individual and make entrepreneur
 Make policy to provide subsidy based on the production
 Involve the farmers/ entrepreneurs while preparing the policies related to support/ subsidy
 Make policy that will ensure getting subsidy/support to those who really work and discourage
the special class people
 Emphasis on the kind support than the cash
 Make policy to make the farmers entrepreneurs and farming as entrepreneurship
 One door subsidy/support program should be implemented
 Make policy farmer friendly
 Coordinate with local government/ provincial government and central government to increase
road network at dairy farming potential areas
 Buy-buy guarantee of milk produced by the farmers
 Provide block subsidy/support to the dairy processing industries to establish their own milk
pocket area and allocate specific milkshed areas for specific dairy processing industries

Implementation

 Develop strong implementation plan with project control mechanism (activity tracking system)
 Execute effective program continuously with required improvements
 Linkage the production with marketing and market assurance
 Balance in inputs and services i.e. provision of inputs and services to get better result
 Support required for transportation of goods and materials
 Increase access and availability of soft loan/ subsidized loan and insurance by implementing
government policy
 Implement forage mission, soil test, maize mission

Structure development

 Continuous training and skill development compatible with technology development

 Develop the structure incompliance to criterion fixed for support and subsidy
 Pay due attention to new and affordable technology for modernization
 Increase milk collection centers and chilling centers at strategic location
 Mobilize local government to develop local structure for dairy sector development
 Manage skilled, experienced and efficient technical manpower
 Establish structure that increase access and availability of subsidy/support to real beneficiaries
 Provision of exchanged and observation tours
 Establish milk chilling centers at strategic location supported by establishment of MPCs

Monitoring and evaluation

 Develop calendar of monitoring in compliance with the project objectives and calendar of
operation of project activities
 Meaningful field verification should be done to have exact situation of the subsidy/support
applicant and select appropriate applicant
 Develop indicators of the projects and monitoring indicator accordingly
 On site suggestion and consultancy support should be provided for improvement and complete
the activities within time frame and budget

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