Court orders government to ensure dairy farmers are paid on time

The Supreme Court has mandated the government to create a system that guarantees dairy farmers receive timely payments, aligning with a June 2024 agreement. This order comes after advocates filed a case against the government and private dairy companies concerning substantial unpaid dues.

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it was also the government's responsibility to ensure that dairy farmers receive their payments on time.

When the petition was lodged in March 2024, dairy farmers were owed an estimated Rs7 billion. Private dairy companies accounted for Rs6 billion of this debt, with the state-owned Dairy Development Corporation owing the remaining Rs900 million. The court stressed that ensuring regular payments is a government responsibility and cautioned that agreements should not be used to suppress farmers' concerns.

Despite previous agreements in March and June 2024 aimed at regularizing payment cycles and mitigating production fluctuations, the court noted a lack of evidence that payments had become consistent or that all arrears were settled. These agreements also included provisions for government support in processing excess milk into powder and butter, promoting exports, and facilitating loans for dairy entrepreneurs.

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agreements reached between the government and stakeholders should not become merely a means of diverting or suppressing the concerns of farmers who have limited access to authorities.

The court further directed the government to conduct public awareness campaigns covering legal provisions, access to finance, subsidized loans, veterinary services, and quality feed for livestock. The issue of delayed payments intensified in late 2023, with companies citing an economic slowdown that reduced demand and disrupted cash flow, leading to unsold products and mounting liabilities to farmers.

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Despite the agreements, the court said it had not received evidence that the payment cycle had become regular or that all outstanding dues had been cleared.