Government-Run Cheese Factory Shut Down in Ilam, Nepal

In Nepal, two government-run cheese factories in the eastern district of Ilam have shut down after the state-owned Dairy Development Corporation faced mounting financial pressures.

The Pashupatinagar and Rakse factories—once key suppliers of hard cheese made from Himalayan highland milk—were unable to recover from declining sales during the COVID-19 pandemic.

Their closure now threatens the livelihoods of local dairy farmers who depended on these facilities as a reliable market for their milk.

Although a few government cheese plants in nearby areas remain operational, they are struggling to compete with faster-growing private producers, leading to unsold stock and delayed payments to farmers. The disruption reflects a broader global trend: traditional dairy industries, especially in developing countries, are grappling with shifting consumer demand, supply-chain pressures, and competition from private and international brands.

Nepal’s experience underscores how vulnerable small agricultural economies can be as the global dairy sector undergoes rapid change.##