HOW TO GET NABARD SUBSIDY FOR DAIRY FARMING
- ARE
- Sep 4, 2019
- 5 min read
Updated: May 19, 2021
Dairy farming is a large unorganized sector in India and a major source for livelihood in rural areas. In an effort to bring in structure into the dairy farming industry and provide assistance for setting up dairy farms, the Department of Animal Husbandry, Dairying and Fisheries launched the “Venture Capital Scheme for Dairy and Poultry” in 2005. The scheme provided for interest free loans for setting up dairy units and as of 31st March, 2010 nearly 15,268 dairy farms enjoyed interest free loans to the tune of INR 146.91 crores in India. Following the success of the Venture Capital Scheme for Dairy and Poultry, the Government in 2010 decided to launch the Dairy Entrepreneurship Development Scheme through NABARD. In this article, we look at how to get NABARD subsidy for dairy farming.
NABARD Subsidy for Dairy Farming Overview
Dairy farming is big business in India and milk production is growing each year. In an effort to further strengthen dairy farming in India, the NABARD subsidy for dairy farming was launched. The objectives of the scheme include:
To promote setting up of modern dairy farms for production of clean milk
To encourage heifer calf rearing thereby conserve 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 itself.
To bring about upgradation of quality and traditional technology to handle milk on a commercial scale
To generate self-employment and provide infrastructure mainly for unorganized sector.
NABARD Dairy Farming Subsidy Eligibility
The following types of persons and association of persons are eligible for receiving the NABARD Dairy Farming Subsidy:
Farmers
Individual Entrepreneurs
NGOs
Companies
Groups of unorganized and organized sector etc.
Groups of organized sector include Self Help Groups, Dairy Cooperative Societies, Milk Unions, Milk Federations, etc.
However, an individual will be eligible to avail the dairy subsidy for all the components under the scheme but only once for each component. Further, if more than one member of a family must avail the dairy farming subsidy, they must setup separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 500m.
NABARD Dairy Farming Subsidy Schemes
The following is the assistance provided under the NABARD subsidy for Dairy Farming scheme:
Type: Establishment of small dairy units with crossbred cows/ indigenous descript milch cows like Sahiwal, Red Sindhi, Gir, Rathi etc / graded buffaloes up to 10 animals.
Investment: INR5L for 10 animal unit – 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 back ended capital subsidy subject to a ceiling of INR1.25L for a unit of 10 animals (INR1.67L for SC/ST farmers,). Maximum permissible capital subsidy is INR25K (INR33.3K for SC/ST farmers) for a 2 animal unit. Subsidy shall be restricted on a prorata basis depending on the unit size.
Type: Rearing of heifer calves – cross bred, indigenous descript milch breeds of cattle and of graded buffaloes – up to 20 calves.
Investment: INR4.8L for 20 calf unit – 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 back ended capital subsidy subject to a ceiling of INR1.2L for a unit of 20 calves (INR1.6L for SC/ST farmers). Maximum permissible capital subsidy is INR30K (INR40K for SC/ST farmers) for a 5 calf unit. Subsidy shall be restricted on a prorata basis depending on the unit size.
Type: Vermicomposting (with milch animal unit. To be considered with milch animals and not separately).
Investment: INR20K
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR5K (INR6.7K for SC/ST farmers,).
Type: Purchase of milking machines /milk testers/bulk milk cooling units (up to 2000 lit capacity).
Investment: INR18L.
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR4.5L (INR6L for SC/ST farmers).
Type: Purchase of dairy processing equipment for manufacture of indigenous milk products.
Investment: INR12L
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR3L (INR4L for SC/ST farmers).
Type: Establishment of dairy product transportation facilities and cold chain.
Investment: INR24L
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR6L (INR8L for SC/ST farmers).
Type: Cold storage facilities for milk and milk products.
Investment: INR30L
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR7.5L (INR10L for SC/ST farmers).
Type: Establishment of private veterinary clinics.
Investment: INR2.4L for mobile clinic and INR1.8L for stationary clinic.
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR60K and INR45K (INR80K and INR60K for SC/ST farmers) respectively for mobile and stationary clinics.
Type: Dairy marketing outlet / Dairy parlor.
Investment: INR56K
Subsidy: 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of INR14K (INR1.86K for SC/ST farmers).
How to get NABARD Subsidy for Dairy Farming
NABARD Dairy Farming Subsidy Process
The following are the steps to be followed for getting the NABARD Subsidy for Dairy Farming:
Step 1: Decide which type of business activity you are going to establish that pertains to dairy farming. The activity to be undertaken or business model can be one of the mentioned types above.
Step 2: Register a company or any other suitable business or NGO entity.
Step 3: Prepare a detailed project report or business plan for the dairy farm including a request for bank loan.
Step 4: Submit request for bank loan to any commercial bank or regional rural bank or state cooperative bank or state cooperative agriculture and rural development bank or other institutions, which are eligible for refinance from NABARD.
Step 5: Once the bank loan is sanctioned, the promoter would have to implement the project using his contribution and bank loan.
Authority for sanction of the loan, interest rate, tenure and collateral requirement is left to the Bank.
Step 6: On disbursement of first installment of the loan, the Bank would have to apply to NABARD for sanction and release of NABARD subsidy for dairy farming.
Step 7: NABARD would release the subsidy to the bank. The would hold the subsidy in an account classified as “Subsidy Reserve Fund Account” with no interest.
Step 8: 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.
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