Author:
Roshan Dhakal, Mahesh Chhetri, Suprina Neupane, Ram Sharan Timalsina, Bibas Bahadur Tiwari, Hari Prasad Ghimire, Dinesh Chhetri

Doi: 10.26480/fabm.02.2025.64.71

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Milk production plays a vital role in rural economy of Nepal, supporting around 500,000 farm households, alongside contributing around 9% to the national GDP and 33% to the agricultural GDP. This study examines the structure, dynamics, and efficiency of the milk value chain in Kathmandu valley comprising three districts: Kathmandu, Bhaktapur and Lalitpur which are Nepal’s largest urban milk market. The study focuses on value chain actors, marketing channels, production economics, and consumer prefereces. This research was conducted with the objective to map the milk value chain, analyze the roles and interactions of stakeholders, and assess the strengths, weakness, opportunities and threast (SWOT) within the sector. The survey was done with 120 respondents (40 producers, 40 traders and 40 consumers) selected through snowball sampling across Kathmandu valley using semi- structured questionnaires and key informant interviews. The study showed that buffalo milk is preferred by urban consumers for its richness which accounted for 53.55% of national milk output despite higher production costs (NRs. 74.4/liter), whereas cattle milk, with lower costs (NRs. 65.1/ liter), showed higher yield (7.98liters). Three milk marketing channels were identified, with direct sales from producers to consumers offering the highest profit margins (66.4%) but limited scalability due to infrastructure constraints. Retailers served as the key dominant outlet, while cooperatives remained marginal, involved with only 4% of producers. Major challenges seen were high feed costs, poor cold storage, market fragmentation, and concerns over milk adulteration and hygiene. The SWOT analysis underscored traditional knowledge and rising demand as sector strengths, but highlighted weaknesses such as outdated technologies, limited investment and inadequate quality control. The study concludes that targeted interventions including strengthening cooperatives, improving cold chain infrastructure, and enhancing regulatory oversight are necessary to improve productivity, ensure food safety and promote a sustainable and equitable dairy sector in Nepal.