NABARD Subsidy Schemes, Eligibility For Dairy Farm

Introduction to NABARD subsidy schemes for Dairy Farming Business

The following information is about NABARD Subsidy Schemes, farmer eligibility and dairy subsidy applying procedure.

Financial support is given to the dairy farmers in the form of subsidy. These subsidy schemes are defined by the central government and are managed through an organisation called NABARD. Dairy is considered to be the largest livestock farming industry in India. So as to strengthen the dairy farming industry in India, the Government has promoted subsidy schemes. These schemes help the new individuals or farmers to establish their own dairy farms and successfully run the business. Subsidies are also provided by the state governments in the form of subsidized seeds, medicines, equipment, veterinary services etc. direct financial support is not available from the state government for the dairy farming business.

What is NABARD?

The National bank for Agriculture and Rural Development is basically a bank, but doesn’t directly deliver finances to the individuals, rather it coordinates with other banks to provide financial assistance to the farmers. NABARD’s dairy farming subsidy scheme has the following objectives and is generally referred to as Dairy Entrepreneurship Development Scheme (DEDS):

• To assist in building a proper infrastructure for the dairy industry and generate self- employment.
• Help individuals to set up new dairy farms for the production of clean milk.
• Aims to develop and conserve good breeding stocks like the heifer calf.
• Bring in structural changes so that the industry becomes organised and initial milk processing could be carried out at the production level (village).
• Provide assistance so as to develop modern technology for commercial scale of milk production.
• Help farmers to provide value addition to the produce by developing by products of milk.

Requirements / Eligibility for getting a NABARD subsidy

The individual or farmer interested in setting a dairy farming business should probably satisfy the following conditions which are outlined under the eligibility section of the NABARD scheme.

• The dairy farming business is eligible for a subsidy if it is being set up by farmers, individual entrepreneurs, unorganised and organised groups. The subsidy is also made available to self help groups on behalf of their members, dairy cooperative societies, milk federations, panchayati raj institutions and to milk unions on behalf of their members.
• Any applicant belonging to the above mentioned categories is eligible under the subsidy scheme, but can avail subsidy only once for each component of the scheme.
• Members belonging to the same family can avail the benefits of the scheme separately provided they set up separate dairy units having separate infrastructure. The distance between the two dairy farms should be at least 500 m for availing the NABARD subsidy.

What are the NABARD schemes for Setting up a Dairy Farm?

Category Investment Type of subsidy Establishing a dairy (procuring graded, good milk producing dairy cattle like Sahiwal, Gir, Rathi or buffaloes) For 10 dairy animals – Rs 5 lakhs.

The minimum size of the unit should be around 2 to 10 animals.

25% outlay for normal people and 33.33% outlay for SC/ST farmers/individuals are provided as back ended capital subsidy.

The maximum subsidy limit for a unit of 10 animals is (Rs 1.25 lakhs for normal people and Rs 1.67 for SC/ST people).

2 animals unit: maximum of Rs 25000 for normal people and Rs 33000 for SC/ST people.

 

Rearing of high quality calves (heifer) of cows and graded buffaloes The size of the unit should range in between 5-20 calves.

The cost of 20 calves should be around Rs 4.80 lakhs (maximum).

Maximum Back ended capital subsidy for 20 calf unit (25%, i.e. Rs 1.20 lakh for general category and 33.33%, i.e. Rs 1.60 for SC/ST category people)

Maximum subsidy for a 5 calf unit (Rs 30,000 for general category and Rs 40,000 for SC/ST category).

Procurement of vermicompost (considered with dairy cattle and not separately) Maximum Investment Rs 20,000. Maximum Back ended capital subsidy for general category is 25%, i.e. Rs 5000 and for SC/ST category is 33.33% i.e. Rs 6700). Purchase of milking machines and other required units of maximum 2000 litres capacity Rs 18 lakhs (maximum). Outlay of 25% and 33.33% for general and SC/ST Category respectively as back ended capital subsidy.

The Maximum limit of the subsidy is Rs 4.5 lakhs and Rs 6 lakhs for general and SC/ST respectively.

Purchase of dairy processing equipment Maximum of Rs 12 lakhs. The same percentage of outlay as back ended capital subsidy as mentioned for the above components, but the maximum limit is Rs 3 lakhs (general) and Rs 4 lakhs (SC/ST). Transportation facilities and cold chain management Rs 24 lakhs (max). The percentage of the back ended subsidy remains same as another component mentioned above, but with a variation in the maximum limit, i.e. Rs 6 lakhs and Rs 8 Lakhs for general and SC/ST respectively. Cold storage facilities Maximum investment of Rs 30 lakhs. Back ended capital subsidy – 25% and 33.33% of the outlay for general and SC/ST categories.

Maximum limit of Rs 7.50 lakhs for general and Rs 10 lakhs for SC/ST people.

Establishing private veterinary clinics Mobile clinic – Rs 2.40 lakhs.

Stationary clinics – 1.80 lakhs

Back ended capital subsidy of 25% and 33.33% for general and SC/ST categories.

The maximum limit of the subsidy is Rs 60,000 and Rs 45,000 for general category mobile and stationary units respectively.

Similarly, Rs 80,000 and Rs 60,000 to the SC/ST category for mobile and stationary units respectively.

Setting up a dairy parlour or outlet Maximum – Rs 56,000. Back ended capital subsidy – 25% and 33.33% of outlay with a maximum limit of Rs 14,000 and Rs 18,600 for general and SC/ST category respectively.

Note: the subsidy provided by the NABARD is restricted on a pro-rata basis depending on the size of the entire dairy unit.

Back end Subsidy: NABARD releases subsidy to the bank, but not against the loan given to the individual. For example, if the loan is 10 lakhs and the subsidy amount is 2 lakhs, then the subsidy amount would be added only after the repayment of 8 lakhs towards the loan.

Read: Dairy Farming FAQ.

Read: Dairy Processing Plant Project Report.

Institutions working under the NABARD subsidy scheme

The list of banking institutions working under the NABARD subsidy scheme for dairy farming business are:

• Commercial banks
• Urban, rural and regional banks
• Cooperative banks of the state
• State Cooperative Agriculture and Rural Development Banks.

How to Apply for NABARD Subsidy?

One has to follow the following steps to avail the subsidy schemes for setting up a dairy farm business. These are as follows:

• Initially the farmer or individual has to choose from the above mentioned list about the type of business one would want to set up.
• The business has to be registered with the Registrar of Companies (ROC).
• The individual or farmer should prepare a detailed bankable project report for the planned business.
• The report has to be submitted to any nationalized bank, which refinances from the NABARD.
• Once the bank loan is approved, one can start deploying the project.
• After the disbursement of the first loan instalment, the bank would apply to the NABARD for the release of the subsidy amount for that particular project.
• The bank maintains the NABARD subsidy amount under the account classifies as ‘Subsidy Reserve Fund Account’ that has no interest rates.
• Once the farmer or business holder serves the loan obligation, the subsidy amount in the bank account is adjusted against the last few repayments of the bank loan.

Read: Goat Farming Cost and Profit Guide.