Dairy Farming Subsidy in India – A Complete Guide

Dairy Farming Subsidy in India – A Step by Step Guide

Let us find out who is eligible to avail dairy farm subsidy in India. We also explain different types of dairy schemes in India.

dairy farming subsidy
dairy farming subsidy.

Introduction to Dairy in India:

In India, one of the biggest commercial business in rural areas is dairy farming. Setting up a dairy farm even on a small scale requires a more initial investment. So People always look for Government Subsidies /Schemes and other Financial assistance from banks especially from “NABARD” (National Bank for Agriculture and Rural Development). To support and encourage the farmers and to bring better qualitative production in Milk, NABARD launched a scheme. The main objectives of NABARD to introduce the scheme are :

Dairy Farm Setup.
Dairy Farm Setup.
  1. To achieve the best production in milk by modernizing the dairy farm.
  2. To achieve the best breeding by rearing good quality calf.
  3. To support and creating rural jobs in dairy farming.
  4. To establish cold storages and improve the quality of milk.
  5. To market and reach the milk distribution even interiors of villages.
  6. To support and introduce modern technology to doing dairy business in a commercial way.

Who is eligible for NABARD subsidy in Dairy Farming? Let us find out;

  1. Individual Entrepreneurs or Starters.
  2. Agriculture Farmers.
  3. Companies or Firms.
  4. NGOs.
  5. Companies, Firms, Milk Federations, Milk Unions and Dairy Cooperative Societies.

You may be interested in reading the Dairy Setup Information.

NABARD subsidy assistance:

Nabard Subsidy For Dairy Cow.
Nabard Subsidy For Dairy Cow.

Type1: Small dairy establishments units with crossbred cows/indigenous descript milch cows like Sahiwal, Red Sindhi, Gir, Rathi, etc/graded buffaloes up to 10 animals.

  • Investment: Rupees 5.00 lakhs 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 Rupees 1.25 lakhs for a unit of 10 animals( Rupees 1.67 lakhs for SC/ST farmers). The maximum permissible capital subsidy is Rupees 25000 ( Rupees 33,300 for SC/ST farmers ) for a 2 animal unit. The subsidy shall be restricted on a prorated basis depending on the unit size.

Type2: Rearing of heifer calves – crossbred, indigenous descripts milch breeds of cattle and of graded buffaloes – up to 20 calves.

  • Investment: Rupees 4.80 lakhs for 20 calf unit – 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 back ended capital subsidy subject to a ceiling of Rupees 1.20 lakh for a unit of 20 calves ( Rupees 1.60 lakh for SC/ST farmers). The maximum permissible capital subsidy is Rupees 30,000 ( Rupees 40,000 for SC/ST farmers) for a unit of 5 calves. The subsidy shall be restricted on a prorated basis depending on the unit size.

Type3: Vermicompost (with a milch animal unit .To be considered with milch animals and not separately).

  • Investment: Rupees. 20,000.
  • Subsidy: 25% of the outlay (33.33 % for SC/ST farmers) as back ended capital subsidy subject to a ceiling of Rupees 5,000/- ( Rupees 6700 for SC/ST farmers).

Type4: Purchase of milking machines/bulk milk cooling units (up to 2000 liter capacity).

  • Investment: 18 lakh rupees.
  • Subsidy: 25% of the outlay (33.33 % for SC/ST farmers) as back ended capital subsidy subject to a ceiling of Rupees 4.50 lakh ( Rupees 6.00 lakh for SC/ST  farmers).

Type5: Dairy processing equipment purchase for the manufacture of indigenous milk products.

  • Investment: Rupees 12 lakhs.
  • Subsidy: 25% of the outlay (33.33 % for SC/ST farmers) as back ended capital subsidy subject to a ceiling of Rupees 3.00 lakhs ( Rupees 4.00 lakhs for SC/ST farmers).

Type6: Dairy product transportation establishment facilities and cold chain.

  • Investment: Rupees 24 lakhs.
  • Subsidy: 25% of the outlay (33.33 % for SC/ST farmers) as back ended capital subsidy subject to a ceiling of Rupees 6.00 lakh ( Rupees 8.00 lakh for SC/ST farmers).

Type7: Facilities for milk and milk products cold storage.

  • Investment: Rupees 30 lakh rupees.
  • Subsidy: 25% of the outlay (33.33 % for SC/ST farmers) as back ended capital subsidy subject to a ceiling of Rs 7.50 lakh ( Rs 10.00 lakh for SC/ST farmers).

Type8: Private veterinary clinics establishments.

  • Investment: Rupees 2.40 lakh for the mobile clinic and Rupees 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 Rupees 60,000/- and Rupees 45,000/- ( Rupees 80,000/- and Rupees 60,000/- for SC/ST farmers) respectively for mobile and stationary clinics.

Type9: Marketing of Dairy outlet/Dairy parlor.

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

NABARD Subsidy assistance for Dairy Farming in India:

NABARD Assitance.
NABARD Assitance.

Step 1: First and Foremost decide which type of business activity you are going to establish that relates to dairy farming. The business activity to be undertaken should be one of the types mentioned above.

Step 2: Registering a company or any other suitable business or NGO entity will be required.

Step 3: Preparing a detailed project report or business plan for establishing the dairy farm including a request for the bank loan is mandatory.

Step 4: Submit proposal request for a bank loan to any commercial bank or regional rural bank or state cooperative bank or state cooperative agriculture and rural development bank or other financial institutions, which are eligible for refinancing from NABARD.

Step 5: Once the bank loan is approved and sanctioned, the promoter should implement the project using his contribution along with a bank loan.

  • Note: Authority for loan sanction, interest rate, time frame, and the collateral requirement is left to the Bank or any financial institute.

Step 6: On handing over the first installment of the loan, the Bank should apply to NABARD for sanctioning and release of NABARD subsidy for dairy farming establishment.

Step 7: NABARD would release the subsidy to the bank or any approved institute. They would hold the subsidy in an account described as “Subsidy Reserve Fund Account” with no interest.

Step 8: On promoter loan obligation satisfactory, the subsidy amount in the Subsidy Reserve Fund Account will be adjusted against the last few repayments of the bank loan.

You may also check the Organic Composting for Urban Gardening.

31 COMMENTS

  1. Can please provide some other details like how to start a new dairy farm
    how much capital is required and other
    Thanks

  2. Hello Sir, I want to start a small diary firm at the initial stage which is 2 cows at rural area, can I start it?.

  3. Sir I have applied for NABARD dairy farming subsidy in September 2017, when should I expect?. I am going to start a dairy farm with 8 cows .

    • You should check the status of your application with the NABARD office. You should meet some technical requirements for approving and granting subsidy. NABARD technical officer is your best point of contact.

  4. I am from Coimbatore having dairy cows of 15 and I have started by getting a bank loan, how to get subsidy for it, can’t find numbered in Coimbatore, help me by providing details thanking

  5. Hello sir,
    Is there any specific period or notification for applying NABARD loan. Or any time we can apply. And after applied how much time take to get loan.

    • You can walk in to NABARD office and apply anytime. However, you should meet certain technical requirements to qualify for subsidies or loans. Your local NABARD is the right point of contact.

  6. I want to set up Small dairy, but in Kolkata here it is not allowed due crowded city and market is very low. I heard, govt is purchasing milk like metro dairy, mother dairy etc. Could you share the information who collects the raw milk, contact no and location.

  7. Please suggest me for my plan

    To start dairy farm how much subsidy I can get for a business of 10 cows and 40 buffalo

    Can I get a loan for animals, processing plant and shed for animals?

    If subsidy permitted on animals or the complete project

    Please inform me as I wish to start a pure milk production while arranging employment in the rural area around our plant

    Thanks

  8. Hi! sir. I want to start a dairy form business. I don’t know how to start dairy farm no idea about it. Can u please suggest me Which way is better? An How can i start it?

  9. sir i want start the busniess of dairy farming. can you please help me to know that what is the average cost of feeding of one bafflow.

  10. Hello Sir. I want to start a dairy farm in Jharkhand. Can you please guide me how to proceed further on this??

  11. Hello sir …
    Am interested in dairy forming. And How will we get a subsidy on Buy a new cattle . Could you please help me .And if yiu dont mind Can you explain about Subsidy and loan for dairy forming
    please send a details to our mail id …

  12. Sir I wants to start a milk vending machines how much investment and what percentage of subsidy i can get on Milk vending or ATM machines ..

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