DDC Faces Financial and Staffing Crisis Despite Balen Shah's Promotion of Yak Cheese

Kathmandu. A few days ago, a picture went viral on social media in which Prime Minister Balendra Shah (Balen) was seen sitting at a table eating 'Yak Cheese'.

This picture, released by him with the objective of promoting domestic products, has suddenly brought the government-owned Dairy Development Corporation (DDC) and its specific product 'Yak Cheese' to the peak of discussion.

However, the other side of this flashy 'promotion' is quite bleak. The DDC, which produces the cheese Balen is tasting, is itself in trouble. On one hand, DDC has to pay Rs 50 crore to farmers, and on the other hand, more than 500 positions for skilled manpower to run the corporation are vacant.

• The allure of domestic brands and Balen's 'trend'

For today's generation, Balen Shah is a 'trendsetter'. When he uses a product, its market demand suddenly increases. The photo he released on Saturday shows Yak Cheese produced by DDC. This cheese, made from the milk of yaks in the high mountain regions, is considered a unique and high-quality product of Nepal.

DDC produces about 36,000 kg of yak cheese annually. It is especially in high demand among foreign tourists, star hotels, and the international market (Singapore, Hong Kong). Balen's promotion has also spread awareness about yak cheese in the domestic market. However, the production mechanism is rusting as demand increases.

DDC's greatest strength lies in the millions of milk-producing farmers in villages. But these very farmers are now disgruntled with the corporation. At one point, the outstanding amount to be paid to farmers had reached Rs 1.25 billion. After reminders and protests, that amount has now come down to around Rs 50 crore.

According to Sanjeev Jha, Head of Market Management, the payment cycle is improving. Daily collection of 80 to 85 thousand liters of milk is happening, a large portion of which is sold as liquid milk. However, the pressure of payment remains a headache for the corporation.

• 500 Vacancies

Looking at DDC's internal situation, it is no less than a 'museum'. The corporation has a total sanctioned staff of 1,063, but only 523 permanent employees are working.

'New employees have not been recruited for a long time. As a result, the corporation has been surviving on the strength of more than 300 employees working on daily wages for the past 15 years,' says Jha, 'Their future is uncertain, which leads to a lack of enthusiasm in work.'

Corporation officials say, 'We have people to do routine work, but there is an extreme shortage of 'sound manpower' who understand marketing, operate modern technology, and can compete with the private sector.'

Even in today's digital age, DDC's marketing style is like that of the Panchayat era. Due to the lack of skilled manpower, the corporation has not been able to launch new products or package existing ones attractively.

• The challenge of 'Dekchi Dairy'

Another major challenge for DDC is the informal market. Small dairies that have opened in every alley of the city (which DDC employees call 'Dekchi Dairy') pay no tax to the government, nor do they adhere to any quality standards. By evading VAT and revenue, they sell milk at lower prices, making DDC's costs appear high.

'As a government institution, DDC must collect milk from farmers in remote areas, where transportation costs are extremely high. Paying all taxes and bearing the responsibility of remote areas increases DDC's costs, but it has to compete with those evading taxes in the market,' says Jha. He argues that due to the state's weak regulation, the government institution that champions the slogan of 'pure milk' is collapsing.

• Behind in Technology

The machinery in most of DDC's milk processing centers is very old. There is a lack of investment to bring in modern technology. While the private sector brings milk and milk products to the market in attractive packets using state-of-the-art machines, DDC is still stuck in the old blue packet format.

The corporation currently has 460 tons of milk powder and 380 tons of butter in stock. Although this stock is said to be kept for the 'dry season', its accumulation also signifies a lack of aggressive market presence. Without new technology and 'investment projects', it is almost impossible for DDC to match the pace of the private sector.

According to DDC, Yak Cheese is a product of Nepal that has carved a unique identity in the world market. Especially, this cheese, aged for 7 to 9 months, has a unique taste and quality. DDC has the capacity to increase its production to 60 tons annually.

Prime Minister Balen's promotion has captured people's attention for some time, but agricultural economist Aarogya Silwal says this alone is not enough. If the government truly wants to revive DDC, it needs to globally brand premium products like Yak Cheese, he says.

'It is a positive aspect that domestic products are being promoted by the Prime Minister or influential individuals like Balen. It instills in citizens an allure for 'Made in Nepal'. DDC needs not just promotion but major 'surgery' right now,' says a high-ranking official who has worked for a long time in the Ministry of Agriculture.

• 12 General Managers in 11 Years

The main reason for DDC's decline is the lack of capable leadership and the appointment of general managers for short periods due to intense political competition. DDC has been a hotbed of extreme instability and political interference for the past decade.

The change of 12 general managers in a short span of 11 years highlights the immense crisis in the corporation's leadership. This glorious institution, built on the sweat of farmers, has reached its weakest state in history due to the dominance of political 'blessings' and appeasing ministers over professional competence.

• The foundation of instability: A game started by violating rules

The foundation of mismanagement in the corporation seems to have been laid 11 years ago. After the retirement of then General Manager Siyaramprasad Singh on October 10, 2013, Ramtapeswor Chaudhary was given the acting responsibility based on seniority. However, less than 6 months later, he was removed and Ganga Timilsina, two levels junior, was handed over the leadership, which became the starting point of instability.

Then Minister Hariprasad Parajuli and Secretary Jayamukunda Khanal had pulled Chaudhary to the ministry without basis and brought in Timilsina. Although DDC's regulations stipulate a two-year term for the General Manager, he was given a three-year appointment due to the intervention of power centers. The practice of running the corporation at the minister's discretion, without specific criteria and procedures, became institutionalized from then on.

After Timilsina's departure, DDC became a laboratory for 'acting' appointments. Senior employee Dr. Ishwariprasad Adhikari ran the corporation for 6 months, and Ishwariraj Neupane for two years. But after Neupane's retirement, disputes started again. While the institution should be led by someone from a technical background, handing over the leadership for 7 months to Shailendrakumar Ghimire from the accounting sector further increased internal conflict within the corporation. Vaikuṇṭha Adhikari, deputed from the ministry for a short period, worked for four months, but no concrete effort was made to improve the corporation's reputation.

• 'Collusion' in the name of open competition

The slogan to improve the corporation by selecting leadership through 'open competition' was raised, but it remained merely a formality. Rudraprasad Poudel, a retired undersecretary from the Ministry of Agriculture, was appointed for two years in 2019 through collusion. The tenure of Sanjeev Jha, who was appointed thereafter, was spent amidst allegations of corruption and court battles.

Jha, appointed with the blessing of then Agriculture Minister Mahendra Ray Yadav, even faced suspension on charges of embezzling Rs 17 crore. However, he used the court's interim order as a shield to complete his term. A person who served as General Manager is now working in the eighth level of the corporation after his term ended.

The ministry sent Joint Secretary Suryaprasad Poudel as General Manager to strengthen the corporation. However, Rajendraprasad Adhikari, Senior Deputy General Manager of the corporation, filed a writ in court demanding that he should be the acting head. Although the court initially issued an interim order in his favor, it later ruled that the person appointed by the ministry would be the General Manager. Suryaprasad Poudel then worked for some time.

Currently, the ministry has given the responsibility of General Manager to Joint Secretary Dr. Sharan Pande.