The Small Farmers Agricultural Cooperative Ltd Manharwa in Bara and the government-owned Dairy Development Corporation (DDC) have signed an agreement for the purchase and sale of milk, creating a more structured market for local dairy farmers.

The agreement was signed on Monday as part of a tripartite agreement reached last week between the Central Federation of Small Farmers Agricultural Cooperatives Ltd, Small Farmers Development Bank Ltd and DDC Nepal.

Cooperative chairperson Nayan Kala Khadka and DDC Hetauda chief Rajiv Khanal signed the agreement in the presence of Central Federation chairman Ekrar Upreti.

Under the agreement, DDC will initially purchase milk produced and collected by the cooperative two days a week, with collection expanding to five days a week from Mangsir. The cooperative currently collects between 5 and 3,500 litres of milk daily.

DDC will make payments every 15 days and provide farmers with technical training and other necessary technical support to improve dairy production.

The cooperative will support farmers by providing livestock farming loans at affordable interest rates and arranging insurance coverage. It will also collect milk produced by farmers and coordinate its supply to DDC.

DDC has pledged to prevent milk holidays, provide additional incentives over prevailing milk prices and manage the transportation of collected milk.

The agreement is expected to give farmers a more reliable market for their milk while encouraging them to expand livestock farming. Cooperative chairperson Khadka said members receiving subsidised loans will be required to sell their milk to the cooperative.

The arrangement effectively connects farm financing, milk collection and a guaranteed institutional buyer, giving local farmers greater certainty over where their production will be sold.

If implemented as planned, the expansion from two collection days to five days a week from Mangsir could further increase the volume of milk reaching DDC through the cooperative.