India has emerged as the largest milk producer in the world, contributing a staggering 24.64% of global milk production in the year 2021-22. This remarkable feat was only possible with the government's unwavering support and the successful implementation of initiatives like the Dairy Entrepreneurship Development Scheme (DEDS).
The Government of India introduced the DEDS dairy loan scheme in September 2010. Its aim was to generate self-employment opportunities in the country's dairy sector and improve milk production by providing financial support to dairy entrepreneurs.
If you're interested, you can apply for a dairy loan under this scheme. Read on to learn in detail about the DEDS scheme's key objectives, components, and eligibility criteria.
Overview of theDairy Entrepreneurship Development Scheme
The Dairy Entrepreneurship Development Scheme was implemented by the Department of Animal Husbandry, Dairying and Fisheries in September 2010. Under this scheme, the National Bank for Agriculture and Rural Development (NABARD) provides business loans to aspiring entrepreneurs looking to start milk production and processing ventures.
The primary objective of the DEDS scheme was to encourage investment and entrepreneurship in the country's dairy sector. Due to its special focus on bringing milk processing to the village level, the scheme has been a key contributor to socio-economic development in rural areas.
Objectives of theDairy Entrepreneurship Development Scheme
DEDS dairy loan scheme aims to achieve these five goals:
1. Promote the establishment of modern dairy farms to produce clean milk.
2. Encourage the rearing of heifer calves to conserve good breeding stock.
3. Bring structural changes in the unorganised sector so that initial milk processing can be done at the village level.
4. Replace the traditional technology with the latest innovations to handle milk on a commercial scale.
5. Generate self-employment and provide infrastructure mainly for the unorganised sector.
Components of theDairy Entrepreneurship Development Scheme
Here’s the detailed breakdown of components of the DEDS scheme and capital subsidies:
Component
Unit Cost
Capital Subsidy
Establishment of small dairy units with cross-breed or indigenous cows like Red Sindhi, Sahiwal, Rathi, Gir, etc., or graded buffaloes up to 10 animals.
Rs. 5 lakhs for 10 animal unit – minimum unit size is 2 animals with an upper limit of 10 animals.
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 10 animals subject to a ceiling of Rs.17,500 (Rs.23,300 for ST/SC farmers) or actual, whichever is lower.
Rearing of heifer calves (indigenous breeds of cattle, cross-bred and graded buffaloes up to 20 calves)
Rs. 4.80 lakhs for 20 calf unit – the minimum unit size of 5 calves with an upper limit of 20 calves.
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 20 calf units subject to a ceiling of Rs.12,100 per calf (Rs.16,200 for ST/SC farmers) or actual, whichever is lower.
Vermicompost with a milch animal unit (to be considered with small dairy farm/milch animals and not separately)
Rs. 20,000
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.6,300 (Rs.8,400 for ST/SC farmers) or actual, whichever is lower.
Purchase of milking machines, milkotesters or bulk milk cooling units up to 5,000 litre capacity
Rs. 18 lakhs
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.5 lakh (Rs.6.67 lakh for ST/SC farmers) or actual, whichever is lower.
Purchase of dairy processing equipment to manufacture indigenous milk products
Rs. 12 lakhs
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.3.3 lakh (Rs.4.4 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of cold chain and dairy product transportation facilities
Rs. 24 lakhs
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.6.625 lakh (Rs.8.830 lakh for ST/SC farmers) or actual, whichever is lower.
Cold storage facilities for milk and milk products
Rs. 30 lakhs
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.8.25 lakh (Rs.11 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of private veterinary clinics
Rs. 2.40 lakhs for a mobile clinic and Rs 1.80 lakhs for stationary clinic.
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.65,000 and Rs.50,000 (Rs.86,600 and Rs 66,600 for ST/SC farmers), respectively, for mobile clinics and stationary clinics or actual, whichever is lower.
Dairy marketing outlet or dairy parlour
Rs. 56,000
25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. 25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.75,000 (Rs.1 lakh for ST/SC farmers) or actual, whichever is lower.
Eligibility Criteria for theDairy Entrepreneurship Development Scheme
Under the DEDS scheme, the following entities are eligible for the NABARD loan for dairy farming:
1. Farmers
2. Single entrepreneurs
3. NGOs
4. Panchayati Raj institutions
5. Groups from unorganised sectors
6. Organised sector groups, such as self-help groups (SHGs), dairy cooperative societies, milk unions, and milk federations.
Furthermore, the government has also set the following terms and conditions for availing of the benefits under the DEDS scheme:
1. An entity can apply for assistance only once for each component of the scheme.
2. More than one family member can receive assistance if they set up separate units with separate infrastructure at locations at least 500 meters apart.
DEDS Dairy Loan Scheme's Interest Rates and Repayment Tenure
Under the DEDS scheme, NABARD offers dairy farm loans aligned with the Reserve Bank of India's guidelines. Banks charge interest on the loan amounts until subsidies are disbursed to the beneficiaries. Once the beneficiary receives the subsidy, banks levy the interest on the remaining loan amount (after subtracting the subsidy).
The loan repayment period usually ranges from 3 to 7 years, depending on business activity and cash flow. Moreover, beneficiaries get a grace period of 3 to 6 months for dairy farm loans, and calf-rearing unit owners receive a grace period of up to 3 years.
Final Word
Dairy farm loans by NABARD under the Dairy Entrepreneurship Development Scheme have played a key role in transforming India into a milk production powerhouse. The scheme has also helped around 1.86 lakh entrepreneurs who had set up mini dairy units create employment for 2 people per unit.
Easy access to small business loans is vital for the growth of agricultural businesses. That's why Tata Capital offers MSME loans of up to Rs. 90 lakhs at attractive interest rates. Furthermore, the flexible tenure ensures you can repay your loan conveniently.
29 May 2024
6 mins read
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