NABARD Dairy Farming Subsidy Scheme Guide

Dairy is one of the largest livestock farming industries in India. The country is the world’s largest milk producer, accounting for more than 13% of the world’s total milk production. It is the world’s largest consumer of dairy products, consuming almost 100% of its own milk production. The NABARD dairy farming subsidy was launched in an effort to further strengthen the dairy farming industry in India,

It is an extremely attractive market, both because of its size and its potential. Over the next few years, the dairy market will see the mother of all market battles as the newcomers try to take away share from Amul, Mother Dairy, and the other cooperatives, which have largely ruled the roost so far.

What are the Objectives of  NABARD Dairy Farming Subsidy?

In addition to milk, the manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gobar gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from the well.

The surplus fodder and agricultural by-products are gainfully utilized for feeding the animals. Objectives of NABARD dairy farming subsidy include:

• First of all, to generate self-employment and provide infrastructure for the dairy sector
• To set up modern dairy farms and infrastructure for the production of clean milk
• In addition, to encourage heifer calf rearing for conservation and development of good breeding stock.
• To bring structural changes in the unorganized sector, so that initial processing of milk can be taken up at the village level.
• To upgrade traditional technology to handle milk on a commercial scale. Additionally, it provides value addition to milk through the processing and production of milk products.

Who can Apply for Nabard Dairy Farm Subsidy Scheme?

Farmers, Individual Entrepreneurs, and Groups of Unorganized and Organized Sector. A group of organized sectors, including Self-Help Groups on behalf of their members, Dairy Cooperative Societies, Milk unions on behalf of their members, Milk federation, Panchayati Raj Institutions (PRls), etc are eligible under the scheme.

• An applicant will be eligible to avail assistance for all components under the scheme but only once for each component.
• More than one member of a family can assist under the scheme provided they set up separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 5OO m.

List of Various NABARD Dairy Farming Subsidy Schemes

1. Establishment Of Dairy

Establishment of small dairy units with crossbred cows/ indigenous description milch cows like Sahiwal, Red Sindhi, Gir, Rathi, etc / graded buffaloes up to 10 animals.

Investment: Rs 5.00 lakh for 10 animal units – minimum unit size is 2 animals with an upper limit of 10 animals.

Subsidy: 25% of the outlay (33 .33 % for SC / ST farmers, ) as a back-ended capital subsidy subject to a ceiling of Rs 1.25 lakh for a unit of 10 animals ( Rs 1.67 lakh for SC/ST farmers,). The maximum permissible capital subsidy is Rs 25000 ( Rs 33,300 for SC/ST farmers )for a 2 animal unit. The subsidy shall be restricted on a pro-rata basis depending on the unit size.

2. Rearing Of Calves

Rearing of heifer calves – cross bred, indigenous description milch breeds of cattle and of graded buffaloes – up to 20 calves.

Investment: Rs 4.80 lakh for 20 calf units – the minimum unit size of 5 calves with an upper limit of 20 calves.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 1.20 lakh for a unit of 20 calves ( Rs 1.60 lakh for SC/ST farmers). The maximum permissible capital subsidy is Rs 30,000 ( Rs 40,000 for SC/ST farmers) for a 5-calf unit. The subsidy shall be restricted on a pro-rata basis depending on the unit size.

3. Organic Manure

Vermicompost (with a milch animal unit . To be considered with milch animals and not separately ).

Investment: Rs. 20,000/-

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers)as back-ended capital subsidy subject to a ceiling of Rs 5,000/- ( Rs 6700/- for SC/ST farmers,).

4. Milking Machine

Purchase of milking machines /milk testers/bulk milk cooling units (up to 2000 lit capacity).

Investment: Rs 18 lakh.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 4.50 lakh ( Rs 6.00 lakh for SC/ST farmers).

5. Dairy Equipment

Purchase of dairy processing equipment for the manufacture of indigenous milk products.

Investment: Rs 12 lakh.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 3.00 lakh ( Rs 4.00 lakh for SC/ST farmers).

6. Transportation & Cold Chain

Establishment of dairy product transportation facilities and cold chain.

Investment: Rs 24 lakh.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 6.00 lakh ( Rs 8.00 lakh for SC/ST farmers).

7. Cold Storage

Cold storage facilities for milk and milk products.

Investment: Rs 30 lakh.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 7.50 lakh ( Rs 10.00 lakh for SC/ST farmers).

8. Veterinary Clinic

Establishment of private veterinary clinics.

Investment: Rs 2.40 lakh for the mobile clinic and Rs 1.80 lakh for the stationary clinic.

Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back-ended capital subsidy subject to a ceiling of Rs 60,000/- and Rs 45,000/- ( Rs 80,000/- and Rs 60,000/- for SC/ST farmers) respectively for mobile and stationary clinics.

9. Dairy Parlour

Dairy marketing outlet / Dairy parlour.
Investment: Rs 56,000/-
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as a back-ended capital subsidy subject to a ceiling of Rs 14,000/-( Rs 18600/- for SC/ST farmers).

How To Get NABARD Dairy Farming Subsidy?

In obtaining the NABARD dairy farming subsidy, the following steps are involved:

• Decide what type of business activity you are going to initiate. To get the NABARD dairy farming subsidy, you will need to select the business from the above-mentioned list.
• Register your business with ROC. Else you can also form NGO.
• Prepare a detailed bankable project report or business plan.
• Submit your bank loan request to any nationalized or commercial bank or regional rural bank which are eligible for refinancing from NABARD.
• After getting the bank loan sanctioned, you can implement and establish your dairy farm project.
• On disbursement of the first installment of the loan, the Bank would have to apply to NABARD for sanction and release of NABARD subsidy for dairy farming.
• After getting the subsidy amount released from NABARD bank would hold the subsidy in an account classified as a “Subsidy Reserve Fund Account” with no interest.
• On satisfactory servicing of the loan obligation by the promoter, the subsidy amount in the Subsidy Reserve Fund Account would be adjusted against the last few repayments of the bank loan.

Financial Institutions Eligible For NABARD Dairy Farming Subsidy

• Commercial Banks
• Regional, Rural, and Urban Banks
• State Cooperative Banks
• State Cooperative Agriculture and Rural Development Banks and such other institutions, which are eligible for refinancing from NABARD

Source: National Bank For Agriculture And Rural Development (NABARD)