Govt to Combine 2 Mega Dairy Schemes to Help Private Sector

The AHIDF was inaugurated in 2000 with a Rs 15,000 crore budget, whereas the DIDF, which was implemented for five years till the last fiscal year, had its Rs 10,000 crore budget underutilized.

"Because more than half of the funds allotted under the two schemes have yet to be disbursed, we will merge the schemes subject to a composite outlay cap of Rs 25,000 crore. There will be no additional funding requirements," a Department of Animal Husbandry and Dairying official told the media. He also stated that the merger would result in implementation synergy.

The government hopes to increase private sector participation in the development of dairy and meat processing facilities through the merge of AHIDF and DIDF. According to officials, despite India being the world's largest milk producer and one of the greatest poultry meat producers, the unorganized sector continues to dominate the livestock sector.

According to government estimates, only 20-25% of the milk produced in the country is processed; the goal is to boost milk processing to 40% within the next several years.

Both initiatives aim to build dairy and meat processing infrastructure through cooperatives and the commercial sector by giving interest subsidies and a longer payback time.

AHIDF, which is part of the Prime Minister's Atmanirbhar Bharat Abhiyan stimulus package, focuses on developing milk and meat processing infrastructure, as well as cattle feed production and providing access to organized markets for unorganized rural milk and meat producers.

According to official data, banks have approved Rs 4,534 crore in loans for 271 projects worth Rs 6,819 crore sanctioned under AHIDF so far. So far, just Rs 675 crore has been disbursed from the fund.

AHIDF provides private organizations, farmer-producer organizations (FPOs), entrepreneurs, and micro and small businesses with bank loans with a 3% interest subsidy, credit guarantees, and a 10-year payback schedule that includes a two-year moratorium.

DIDF, with a total project outlay of Rs 10,005 crore and a loan component of Rs 8,004 crore from the National Bank for Agriculture and Rural Development (NABARD), National Dairy Development Board (NDDB), and National Cooperative Development Corporation (NCDC), was implemented from 2018-19 to 2022-23 to create additional dairy processing infrastructure by cooperatives.

According to data, DIDF has approved 36 projects across 11 states with a total project budget of Rs 5,429 crore.

So far, the fund has sanctioned loans totaling Rs 3,483 crore to dairy cooperatives, multi-state dairy cooperatives, milk producer businesses, and NDDB subsidiaries, with banks disbursing Rs 1,371 crore as loans.

Milk processing plants have been approved in Karnataka (9), Telangana (3), Gujarat (3), and Tamil Nadu (3). Under DIDF, the Centre granted a 2.5% interest subsidy with a maximum payback period of 10 years, including a two-year moratorium period.

The livestock industry rose at a CAGR of 7.9% from 2014-15 to 2020-21, according to the Economic Survey (2022-23), and its contribution to total agriculture GVA climbed from 24.3% to 30.1% during the same time.