India is the world’s largest producer of milk, pulses, spices, cashew, tea, etc. Agriculture accounts for 26% of the gross domestic product of India. One of the most important parts of agriculture in India is Animal husbandry. It is the process of breeding animals for meat, milk, eggs, fiber, etc. Animal care is also an important part of Animal husbandry.

There is a department of Animal Husbandry, dairying, and fisheries (DAHD&F) in India. In 2005-06, the department initiated a scheme called “Venture Capital Scheme for Dairy & Poultry”.The objective of the scheme was to promote the setting up of small dairy farms for milk production. It also aimed to bring changes in an unorganized sector: processing and marketing of pasteurized milk at village level.

Later DAHD&F changed its name to ‘Dairy Entrepreneurship Development Scheme’ (DEDS). This revised scheme came into operation on September 1, 2010. DEDS was a huge success in part years and so the government is continuing it till date.

What are the objectives of the Dairy Entrepreneurship Development Scheme (DEDS)?

  • To help farmers with the infrastructure of dairy farms for clean milk production
  • To generate self-employment and to help promote setting up the dairy farms
  • To encourage rearing of heifer calf for development of good breeding
  • To help farmers for restructuring unorganized sectors so that the process can be taken to the village level
  • To upgrade the traditional milk breeding to a commercial scale
  • To provide value addition to milk by helping farmers through processing and production of milk products

Who are the eligible beneficiaries for the Dairy Entrepreneurship Development Scheme?

  • Farmers, Individual Entrepreneurs, and groups of organized and unorganized sectors are eligible. The organized sector includes Self-Help groups, Milk unions, Dairy Cooperative Societies, Milk federation, Panchayati Raj Institutions (PRIs), etc.
  • The applicant will be able to avail assistance for all the components under the scheme however only one for each component. Different members of families can avail the scheme provided they have separate units and infrastructures at different locations. The distance between farms of 2 family members should be a minimum of 500 m.
  • Priorities may be given to the project being implemented in clusters covering dairy farmers/Women in SHGs, producer companies, and cooperatives.
  • Priorities may be given to the beneficiaries belonging to scheduled caste, scheduled tribes, small, landless, BPL, and marginal category farmers along with the farmers living in drought-affected areas.
  •  Block Development officers can recommend the potential beneficiaries’ proposals to the bank for funds under the DEDS scheme.
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What is the pattern of assistance to the eligible beneficiaries?

  • The scheme provides a capital subsidy at 25% of the project cost of the general category, 33.33% for ST/SC farmers. The component wise subsidy will arrive from time to time at NABARD
  • Entrepreneurs contribution for the loans above Rs. 1 Lakh should be a minimum of 10% of the project cost
  • Bank loan – Subject to any revision in RBI Guidelines

Components that can be financed, indicative unit cost, and pattern of assistance, in brief, are given below:

No.ComponentIndicative unit costPattern of assistance
1.Establishment of small dairy with units of cross-breed cows, graded buffaloes, descript milch cows, etc up to 10 animals. For SHGs, cooperative societies, producer companies unit size will be 2-10 animals per memberRs. 7 Lakh for 10 animal units. The size of the unit is 2- 10 animals (maximum)  25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The subsidy will be restricted to a maximum of 10 animals (Upper limit). The ceiling will be Rs. 17,500 per animal for the general category and Rs. 23,50 for SC/ST category or actual price (whichever is lower). Also if any of the categories buy an animal worth more, the subsidy will still be restricted to the above ceilings.
2.Establishment of dairy with the rearing of heifer calves – cross bred, indigenous cattle and graded buffaloes – up to 20Rs. 9.70 Lakh for 20 calves unit (upper limit is 20)25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The subsidy will be restricted to a maximum of 20 animals (Upper limit). The ceiling will be Rs. 12,100 per animal for the general category and Rs. 16,200 for SC/ST category or actual price (whichever is lower).
3.Vermicompost with mich animal unitRs. 25,20025% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 6300 for the general category and Rs. 8400 for SC/ST category or actual price (whichever is lower).
4.Purchase of bulk milk cooling units (up to 5000 liters capacity), milking machines, and milk-o-testers (Biomass cow dung based power run is also permissible)Rs. 20 Lakh25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 5 Lakh for the general category and Rs. 6.67 Lakh for SC/ST category or actual price (whichever is lower).
5.Purchasing of equipment that can process milk for the manufacture of milk productsRs. 13.20 Lakh25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 3.30 Lakh for the general category and Rs. 4.40 Lakh for SC/ST category or actual price (whichever is lower).
6.Establishment of dairy product transportation facilitiesRs. 26.50 Lakh25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 6.625 Lakh for the general category and Rs. 8.830 Lakh for SC/ST category or actual price (whichever is lower).  
7.Facilities of cold storage for milk and milk productsRs. 33 Lakh25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 8.25 Lakh for the general category and Rs. 11 Lakh for SC/ST category or actual price (whichever is lower).
8.Establishments of clinics for animalsRs. 2 Lakh (stationary) and Rs. 2.60 Lakh (mobile)25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 65,000 and Rs. 50,000 for the general category and Rs. 86,600 and Rs. 66,600 for SC/ST category respectively for mobile and stationary or actual price (whichever is lower).
9.Dairy parlor or any dairy marketing outletsRs. 3 Lakh25% of the project cost will be provided to general category farmers and 33.33% to SC/ST category farmers. The ceiling will be Rs. 75,000 for the general category and Rs. 1,00,000 for SC/ST category or actual price (whichever is lower).

Linkage With Credit

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Assistance under the scheme will be dependent completely on the credit-linked and sanctions of the project by all the financial institutions eligible as per the guidelines.

For the areas of operation, the National Bank of Agriculture and Rural Development (NABARD) is the nodal agency in the implementation of DEDS covering all the States and UTs throughout the country.

What are the financial institutions eligible for the refinance under the Dairy Entrepreneurship Development Scheme?

  • Regional Rural and Urban Banks
  • Commercial Banks
  • State Cooperative Banks
  • State Cooperative Agriculture Banks
  • Rural Development Banks
  • Such other institutions which are eligible from NABARD

Important things about the Dairy Entrepreneurship Development Scheme (DEDS) that you should know:

  • The rate of interest will be based on the RBI guidelines and the policies of the concerned bank from where you are taking the loan.
  • Bank will charge interest on the entire amount of the loan until the subsidy portion is received. And once the subsidy is approved the bank will charge only on the bank loan portion.
  • Time for the completion of the project (other than the calf rearing units as it can go till 2 years) would go till a maximum of 9 months periods from the date of dismemberment of the first installation.
  • The period can be extended 3 more months in the cases where justification given by the beneficiary is found adequate.

Benefits of the DEDS scheme:

  • This scheme helps you increase the income resources and establishment of the farm
  • Availing this scheme will generate employment opportunities by manufacturing milk products
  • This scheme helps farmers with the finances of animals
  • This scheme can be availed by more than one member of the family if the requirements are met
  • The subsidy provided by this scheme will be kept under “Subsidy reserve fund account” and no interest shall be payable on this amount
  • The subsidy will be adjusted against the last few installments of the bank loan with lock periods of 3 years (minimum) and shall be refunded if the account becomes a Non-Performing Account

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