How to Setup a Commercial Dairy Farm in India

Indian central government last year launched a scheme called “Dairy Entrepreneurship Development Scheme (DEDS)” through National Bank for Agriculture and Rural Development  (NABARD) with an objective to bring structural changes in the unorganized sector of dairy farming. It also aims to set up of modern dairy farms and providing employment opportunities for individuals.This time government has come up with more financial assistance.

Farmers and individuals can take advantage of this scheme. This scheme also provides opportunities for entrepreneurs interested in dairy farming. Now have a look at the important features and specifications of this scheme:

Who can apply?

  • Farmers, individuals, self-help groups, companies etc. can apply for this scheme.
  • An individual entrepreneur is eligible for one-time assistance on all the components.
  • More than one family member can be assisted under this scheme provided that they set up different dairy unit parted by at least 500 m distance.

Financial Assistance:

Financial assistance will depend upon the type of dairy farming which has been described below.

  1. Establishment of small dairy unit with 2-10 cattle (cows and buffaloes)

Investment

  • Rupees 6 Lakh for 10 animal units – minimum unit size is 2 animals with an upper limit of 10 animals

Subsidy

  • Rupees 1.50 Lakh subsidy for General category and 1.98 Lakh for SC/ST individuals.
  • Maximum amount has been fixed at INR 15,000 (20,000 for SC/ST farmers) in the case of a single(one) animal unit.
  1. Rearing of Heifer Cows up to 20 calves

Investment

  • Rupees 5.50 Lakh for 20 calves

Subsidy

  • Rupees 1.37 Lakh subsidy for General category and INR 1.83 Lakh for SC/ST individuals.
  • Maximum permissible subsidy is INR 33,o00 (44,000 for SC/ST farmers) for 5 calves.
  1. Purchase of milking machines/milk testers/chilling machines

Investment

  • Rupees 20 Lakh

Subsidy

  • Rupees 5 Lakh subsidy for General category and INR 6.67 Lakh for SC/ST individuals.
  1. Purchase of dairy processing equipment producing indigenous milk products

Investment

  • Rupees 13.20 Lakh

Subsidy

  • Rupees 3.30 Lakh for General category and INR 4.40 Lakh for SC/ST farmers
  1. For dairy products transportation facilities and cold chain

Investment

  • Rupees 26.50 Lakh

Subsidy

  • Rupees 6.625 Lakh for General category and INR 8.830 Lakh for SC/St farmers
  1. For cold storage facilities

Investment

  • Rupees 33 Lakh

Subsidy

  • Rupees 8.25 Lakh for General category and Rupees 11 Lakh for SC/ST farmers.

Note: The subsidy has been calculated on the basis of 25% for General category and 33.33% for SC/ST farmers.

Documents required:

  1. Application Form
  2. Detailed Project Report (DPR)
  3. Quotations of machinery, equipments etc.
  4. Plans & Estimates for the shed, godown, warehouse, pack house, store room etc.
  5. Title Deeds of Agril land like 8 An Extract, 7/12 Extracts, 6 D Extract etc
  6. Permissions & Licenses from departments like FDA, BIS, GSDA, Pollution Department etc. as per the project
  7. Details of Guarantor/s with land extracts
  8. Details of indebtedness with other Banks if any.
  9. Search & Valuation reports of the property to be mortgaged
  10. KYC Compliance
  11. In case of existing commercial units, if the loan is demanded expansion, audited financial statements like B/S, P & L A/c etc are demanded by the Banks.
  12. Other documents related to specific schemes.

How does it work?

  • Decide which farm activity you will be establishing.
  • Register your company
  • Make a detailed business/project plan for the dairy farm (include a bank loan request to in the proposal and very much of your loan getting sanctioned depends upon this draft).
  • Submit your request to any bank which is eligible for refinancing from NABARD.