Dairy Farm Project Report For Bank Loan, Project Proposal
Dairy Farm Project Report for Bank Loan
Today, let us go through Dairy Farm Project Report For Bank Loan, and Project Proposal.
Dairy farming is one of the agricultural practices which involves rearing of animals like cows, goat, sheep, etc. for milk. The processing of milk can be carried out at the farm or the milk can be moved to the milk collection centers, which are nearer to the locality so that it can be sold. Male cows which are born are sold by the farmers for breeding purposes as milk won’t be available from them. The dairy farms prefer to produce the feed on their own and this will be given to the cows as food.
What are the benefits of starting a dairy farm?
Dairy farming is the one which is the income to the farmers, which do dairy farming on a small scale.
Even the manures which are provided by the animals will act as a source of organic matter. This will improve the fertility of the soil, which thereby increases the production of crops.
The cow dung gives gobar gas, which is basically used as a fuel for engines which are generally used in wells for drawing water.
The fodder and the by-products of the dairy farm are used as feed for animals. In the farms, most of the operations are carried by bullock including the farm works and transport.
Employment is available for the people throughout the year.
The investment for starting up a dairy farm will be less when compared to other types of commercial businesses.
Milk is the most useful product in the world and its demand is never-ending.
Hence the per capita income from milk products is also improving every year.
There would also be insurance available to the animals on the dairy farm.
If there is any danger or an emergency on the dairy farm, then it would be easy to shift the animals to a new location or site.
Bank loans to start a dairy farming business:
The schemes for the large-scale dairies or commercial dairy farms will need project reports which are detailed. This project report needs to be prepared with care. The things which are included in the finance will have the details regarding the capital investment which is required to buy the equipment, milch animals and also for the construction of required sheds and buildings. The cost of feeding for the starting 30 days to 60 days is taken as a capital investment and is given to the dairy farmer as a term loan. Even the cost which occurred for the development of land, to complete the fencing, digging the wells for water, to set the pumps and the engine with diesel, to get the electricity and set it, to buy a vehicle for transport of the products to the market, etc. For the dairy projects which have high value, the people who are taking the loan will be using the services of NABARD Consultancy Services. The NABARD Consultancy services are the one which has a very good experience in the preparation of the project reports.
Objectives of NABARD dairy farming subsidy:
The main objective of NABARD is to encourage self-employment among the people. For this reason, NABARD provides an infrastructure to the farmers who are willing to set a dairy farm.
To encourage the setting up of dairy farms which are modern in terms of equipment and infrastructure for the production of pure milk.
For encouraging the rearing of the heifer calf for the purpose of conservation and also to develop a breeding stock that is healthy.
As this sector is not organized, NABARD tries to bring a few changes in terms of structure in order to take the processing of milk to be done starting from the rural level.
In order to encourage the handling of milk using the technology, which is upgraded so that a lot of time and energy would be saved.
To give milk an additional value by processing it and producing the products of milk, which can also be a part of commercial dairy farming.
Read this: Poultry Farming Business Plan.
Who are eligible to apply for the NABARD Dairy farming subsidy and Loan?
All the farmers, persons who are coming into entrepreneurship for the first time are eligible for the scheme.
The group of sectors that are organized like self-help groups that come forward in the name of their members, the milk unions, Institutions of Panchayat raj, etc. will be eligible for the NABARD scheme.
A person who is applying for the NABARD scheme can get help for all the components of the scheme, but he can get assistance only one time for each of the components.
This scheme can be provided for more than one person in a family and they need to set the dairy farm in different locations and they have to be registered as separate businesses. The distance between the two farms should be more than 600 meters
Preparation of dairy project report for a bank loan:
The project report should be prepared by consulting a technical person available in your locality. This technical person you select to help you out or guide you in the project report should be a person who works in state animal husbandry, DRDA, Union member of dairy farmers, etc. It is also beneficial to visit the local dairy farms which are working out well so that you can get to know about the risk factors and also the profits which are a part of the dairy farm. It is always good to have a training session on dairy farming to come to know about the handling of dairy farms. The executive bodies which represent the dairies will be providing the facilities of milk marketing. So it is better if you have your dairy farm somewhere near to such bodies. The project report, which you provide to get the NABARD subsidy should include all the details regarding the technical aspects, financial aspects, and also the aspects which include the details of the management.
Technical information supplied as part of dairy project proposal:
Technical Information for Dairy Farm Loan.
The location of the land, the area required for the land should be included.
The details regarding the nearby market to the farm along with the distance should be mentioned.
The site map of the farm also should be provided.
The capacity of the farm with the number of animals in it should also be mentioned.
The buildings which are required which include offices, sheds, etc. should be mentioned.
The machinery and the equipment required for dairy farming such as a silo pit, a machine for milking, a biogas plant, a vehicle for transport, etc. should be included.
The area required for housing the animals.
The animals which are present on the farm along with their age should be mentioned.
The breed of the animals which are to be raised along with their purchase details such as place, price, and the source of purchase should also be included in the technical details of the project report.
The parameters of the production in the farm such as lactation, the yield of milk, which occurs in liters per day, mortality percentage of the animals should also be included.
The details about the feeding of the animals in the dairy farm such as the amount of green fodder required dry fodder required and also the concentrates should also be mentioned.
The expenses which are required for the cultivation of fodder in the farm itself and for their crop rotations should also be included.
The source and the location of breeding, the staff, which is available to take care of breeding and the expenditure which occurs solely for breeding for every annum should be mentioned.
Details regarding the veterinary staff, which is available at the dairy farm or near to the farm should be given. If the staff has to come from the nearby hospital, then the details regarding the distance of the hospital from the dairy farm should be mentioned. The visits of the veterinary officer and the periodicity of their visits should be mentioned. The expenditure which occurs in terms of veterinary should also be a part of the project report.
The source of electricity should be mentioned along with the source from where the electricity came from, the load which is connected, the chances of problems which are about to occur in terms of electricity, the expenditure that occurred for the generator and its installment.
The source of water and its quality along with the availability of the water along with its quantity should be mentioned. The water used for drinking, cleaning, and for the production of fodder crops should be differentiated and mentioned. If any arrangement regarding the water facility has to make, the expenses which occur for that should be mentioned. The expenses would usually occur in terms of structure type used and its design.
As marketing is the very important aspect of any kind of business, the milk marketing sources should also be mentioned, which included the source of sales in the market, the price at which it is sold, distance of the market from the dairy farm, payment type and the period of payment.
The details of marketing the animals should also be mentioned if any, such as the expected selling price of the animal and its age.
The rate of returns of the farm, the cost and profit ratios, and the current worth of the farm should be mentioned.
The financial condition of the person who is applying for the loan along with the information of the previous debts and the income tax details should be mentioned. These details will be used to check the audit details of the borrower whether it is up to date.
The terms of the loan, such as the interest rate, period of repayment of loan, security, nature, and the grace period for the loan should be mentioned.
Managerial information:
Information regarding the borrower such as if he is trying to start the farm as an individual, company, corporation, or partnership.
The capability of the borrower in managing the business.
The experience which the borrower has in terms of handling a dairy business.
The financial background of the borrower along with his assets.
The qualifications of the borrower technically and also academically.
The management staff, which is present on the dairy farm along with the borrower and their details.
Name of the bank in which the borrower is applying for the loan, the training facilities provided by the bank should be provided.
Assistance or help if anything available from the state or central governments.
All the regulations cleared in terms of land or business.
Appraisal of dairy farm project:
The project report which is prepared with all the above-mentioned details should be submitted to the nearest bank. Then the officer present in the bank will come forward and help you in filling the application form. Then the bank will check the report which you have submitted and comes to a conclusion depending on the feasibility of the project and also the financial reliability.
A sanction, and disbursement of dairy farm loan:
After checking all the details mentioned in the project report and ensuring all the feasible factors, the loan will be sanctioned. The sanctioned loan amount will be disbursed in three stages to the borrower. The first disbursement will occur during the construction of sheds, machinery, and buying of animals. The feeds and the expenses required by the farmer for raising the fodder crops will also be given by the bank for the first 60 days. An officer from the bank would frequently visit the farm and check if all the things are going well.
General terms of dairy project loan:
An outlay of the dairy farming project will be depending on the local conditions, the size of the farm, and the type of components that are added to the dairy project. The prices which are currently prevailing in the market will decide the outlay.
The margin is completely dependent on the borrower’s category and would generally be between 8% to 24%.
The rate of interest will be decided by the banks and that is in no way related to NABARD. The minimum interest rate which is set up depending on the financial viability would be 11.49%.
The security will be dependent on the guidelines issued by NABARD or Reserve Bank of India. These would be changing.
The period of repayment of the loan is dependent on the gross mentioned in the project report. The repayment would be planned on a monthly basis or quarterly basis and should be repaid in a minimum of eight years.
The insurance of the animals present in the dairy farm can be done annually.
In case if you are interested in this: Quail Farming Business Plan.
