India is endowed with the largest livestock population in the world. It accounts for about 57.3 per cent of the world’s buffalo population and 14.7 per cent of the cattle population. Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming.
For dairy schemes with large outlays, detailed project reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipment etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Cost towards land development, fencing, digging of well, commissioning of diesel engine/pump set, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. For high value projects, the borrowers can utilise the services of NABARD Consultancy Services (NABCONS) who are having wide experience in preparation of Detailed Project Reports.
Project can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Co-operative Society / Union / Federation / commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies, if existing in the villages would provide all supporting facilities particularly for marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured.
The project should include the following information on technical, financial and managerial aspects in detail based on type of unit and capacity.
The scheme so formulated should be submitted to the nearest branch of the bank. The bank's officer can assist in preparation of the scheme or filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability
After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipment and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the funds is verified and constant follow-up is done by the bank.
Outlay of the project depends on the local conditions, unit size and the components included in the project. Prevailing market prices may be considered to arrive at the outlay.
Margin depends on the category of the borrowers and range from 10 to 25%.
Banks are free to decide the rates of interest within the overall guidelines. However, for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p.a.
Security will be as per NABARD/RBI guidelines issued from time to time.
Repayment period depends upon the gross surplus in the scheme. The loan will be repaid in suitable monthly/quarterly instalments usually within a period of five to seven years.
The animals and capital assets may be insured annually or on long term master policy, where ever it is applicable.
A model project with 10 buffaloes is given below. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.
|Cost of animals||500000|
|Construction of animal shed||60000|
|Construction of calf shed||24000|
|Cost of Chaff cutter and equipment||60000|
|Type of Animal||Graded Murrah Buffalo|
|Cost of Animal (Rs/.animal)||50000|
|Cost of culled animal||5000|
|Average Milk Yield (litre/day)||10|
|Floor space (sqft) per adult animal||50|
|Floor space (sqft) per calf||20|
|Cost of construction per sqft (Rs.)||120|
|Cost of chaff cutter (power operated) (Rs.)||50000|
|Cost of equipment per animal (Rs.)||1000|
|Insurance premium (% per annum)||5|
|Veterinary aid/animal/ year (Rs.)||1000|
|Quantity of Concentrate feed in one bag(kgs.)||50|
|Cost of concentrate feed (Rs./kg)||12|
|Cost of dry fodder (Rs./kg)||2|
|Cost of green fodder (Rs./kg)||1|
|No. of labourers||1|
|Salary of labourer per month (Rs.)||4500|
|Cost of electricity and water/animal/year (Rs.)||150|
|Rate of interest (%)||12|
|Repayment period (years)||5|
|Selling price of milk/litre (Rs./litre)||26|
|Sale price of gunny bags (Rs.per bag)||10|
|Type of feed||Lactation||Dry|
|Price (Rs.)||Qty. (kg)||Cost Per Day (Rs.)||Qty. (kg)||Cost Per Day (Rs.)|
Total Concentrate Feed Consumed (Kgs.)
|Year||Lactation||Dry||Total||No.of Gunny Bags|
Lactation Chart Per animal
|Year||I Batch||II Batch|
|Lactation days||Dry days||Lactation days||Dry days|
|Sale of Milk||429000||585000||585000||585000||624000|
|Sale of Gunny bags||1710||2790||2790||2880||2880|
|Cost of feeding during lactation||153450||209250||209250||223200||223200|
|Cost of feeding during dry period||8100||72900||72900||64800||64800|
|Veterinary aid and breeding charges||10000||10000||10000||10000||10000|
|Electricity and misc. charges||1500||54000||54000||54000||54000|
PW Costs @ 15% = 1719259.92, PW Benefits @ 15% = 1853258.04, NPW = 133998.11, B.C.Ratio = 1.08, I.R.R. (%) = 30%
|Year||Loan Outstanding||Gross Surplus||Interest||Principal||Total Repayment||Surplus|
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