How to get SUBSIDY, on starting DAIRY BUSINESS

By KRISHI JAGRAN on 14 Dec 2017 | read
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National Bank for Agriculture and Rural Development  (NABARD) has one of the schemes with an objective to bring structural changes in the unorganized sector of dairy farming. It also aims to setting up of modern dairy farms and providing employment opportunities for individuals. Government provides financial assistance to the people who wants to take up diary as business.

Farmers and individuals can take advantage of this scheme. This scheme also provides an opportunities for entrepreneurs interested in dairy farming. Now have a look at the important features and specifications of this scheme:

Who can apply?

  • Farmers, individuals, self-help groups, companies etc. can apply for this scheme.
  • An individual entrepreneur is eligible for one time assistance on all the components.
  • More than one family member can be assisted under this scheme provided that they set up different dairy unit parted by at least 500 m distance.

Objectives of the scheme 

  • To promote setting up of modern dairy farms for production of clean milk 
  • To encourage heifer calf rearing, thereby conserving good breeding stock 
  • To bring structural changes in the unorganised sector so that initial processing of milk can be taken up at the village level itself
  • To upgrade the quality and traditional technology to handle milk on a commercial scale 
  • To generate self-employment and provide infrastructure mainly for unorganised sector

Financial Assistance:

Financial assistance will depend upon the type of dairy farming which has been described below.

  1. For Establishment of small dairy unit with 2-10 cattle (cows and buffaloes)

    Investment :
    INR 6 Lakh for 10 animal units – minimum unit size is 2 animals with an upper limit of 10 animals   Subsidy :·         INR 1.50 Lakh subsidy for General category and 1.98 Lakh for SC/ST individuals.·         Maximum amount has been fixed at INR 15,000 (20,000 for SC/ST farmers) in the case of a single(one) animal unit.

2. Rearing of Heifer Cows up to 20 calves 

Investment :

INR 5.50 Lakh for 20 calves

Subsidy :

·         INR 1.37 Lakh subsidy for General category and INR 1.83 Lakh for SC/ST  individuals.

·         Maximum permissible subsidy is INR 33,o00 (44,000 for SC/ST farmers) for 5 calves.




3. Purchase of milking machines/milk testers/chilling machines

Investment :

INR 20 Lakh


  • INR 5 Lakh subsidy for General category and INR 6.67 Lakh for SC/ST individuals.


  1. Purchase of dairy processing equipment producing indigenous milk products

Investment :

INR 13.20 Lakh

Subsidy :

·         INR 3.30 Lakh for General category and INR 4.40 Lakh for SC/ST farmers.



  1. For dairy products transportation facilities and cold chain

 Investment :

INR 26.50 Lakh

Subsidy :

INR 6.625 Lakh for General category and INR 8.830 Lakh for SC/St farmers.

  1. For cold storage facilities

Investment :

INR 33 Lakh


INR 8.25 Lakh for General category and INR 11 Lakh for SC/ST farmers.

Note: The subsidy has been calculated on the basis of 25% for General category and 33.33% for SC/ST farmers.

Documents required:

  • The individual should not be a bank defaulter.
  • Land paper for mortgage in the case of loan amount exceeding to INR 1 Lakh.
  • Category certificate.

How it works?

  • Decide which farm activity you will be establishing.
  • Register your company
  • Make a detailed business/project plan for the dairy farm (include a bank loan request too in the proposal and very much of your loan getting sanctioned depends upon this draft).
  • Submit your request to any bank which are eligible for refinance from NABARD.