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Dairy Farming: The Easiest way to Avail Govt Loans up to Rs 20 Lakh & NABARD Subsidy to Start your own Dairy Farm

Are you thinking to start your own Dairy farm but don't have enough funds? Don't worry as in this article, we will look at how to get a Govt Loans & NABARD subsidy for dairy farming.

Sugandh Bhatnagar
Dairy Farm
Dairy Farm

Dairy farming is a largely unorganized sector in India and a major source of livelihood in rural areas. In an effort to bring structure into the dairy farming industry and provide assistance for setting up dairy farms, the Government in 2010 decided to launch the Dairy Entrepreneurship Development Scheme through NABARD. In this article, we look at how to get a NABARD subsidy for dairy farming.

NABARD Subsidy for Dairy Farming Overview

Dairy farming is a big enterprise in India and milk production is growing each year. In this situation, if you start your own Dairy Farm Enterprise with the help of Government Loans & NABARD subsidy, it is going to be very profitable for you!

NABARD Dairy Farming Subsidy Eligibility

The following types of persons and associations of persons are eligible for receiving the NABARD Dairy Farming Subsidy:

  • Farmers

  • Individual Entrepreneurs

  • NGOs

  • Companies

  • Groups of unorganized and organized sectors etc.

  • Groups of the organized sector include Self Help Groups, Dairy Cooperative Societies, Milk Unions, Milk Federations, etc.

Note: If a family wants to take advantage of the dairy farming subsidy, they must set up distinct units with separate infrastructure in different areas. The distance between two such farms' boundaries should be at least 500 meters.

NABARD Dairy Farming Subsidy Schemes

The following is the assistance provided under the NABARD subsidy for the Dairy Farming scheme:

For the 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, young entrepreneurs can apply for a loan up to Rs 5.00 lakh for 10 animal units (minimum unit size is 2 animals with an upper limit of 10 animals).

For purchasing milking machines/milk testers/bulk milk cooling units (up to 5000 lit capacity) - Rs 20 lakh

For purchasing of dairy processing equipment for the manufacture of indigenous milk products - Rs 13.20 lakh

NABARD Subsidy: You can avail additional 25% of the outlay (33 .33 % for SC / ST farmers) as 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,). A 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.

How to get Nabard Subsidy for Dairy Farming

The following are the steps to be followed for getting the NABARD Subsidy for Dairy Farming:

Step 1: Determine whatever type of dairy farming-related business you will start.

Step 2: Get your company registered or any other suitable corporate or non-profit organization.

Step 3: For the dairy farm, prepare a detailed project report or business strategy, and request for a bank loan.

Step 4: Submit a bank loan request to any commercial bank, regional rural bank, state cooperative bank, state cooperative agriculture and rural development bank, or other qualified institutions for NABARD refinancing.

Step 5: Once the bank loan is approved, the promoter must put the concept into action with his own money and the bank loan.

Step 6: The Bank has final say on loan approval, interest rate, term, and collateral requirements.

Following the disbursement of the first installment of the loan, the Bank must apply to NABARD for approval and release of the NABARD dairy farming subsidy.

Step 7: The subsidy would be released to the bank by NABARD. They would deposit the subsidy in a "Subsidy Reserve" account.

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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