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How to get SUBSIDY, on starting DAIRY BUSINESS

KJ Staff
KJ Staff
Dairy Business

Planning to start a profitable dairy business but don't know how to get financial help or subsidy for it....

National Bank for Agriculture and Rural Development (NABARD) had launched one scheme with an objective to bring structural changes in the unorganized sector of dairy farming. It also aims to set up modern dairy farms and provide employment opportunities to the individuals. The government provides financial assistance to the people who want to take up dairy as a business.

Farmers and individuals can take advantage of this scheme. This scheme also provides an opportunity 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 the production of clean milk 

  • To encourage heifer calf rearing, thereby conserving good breeding stock 

  • To bring structural changes in the unorganized 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 unorganized sector

Financial Assistance:

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

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

Investment :

1. INR 6 Lakh for 10 animal units – minimum unit size is 2 animals with an upper limit of 10 animals

 Subsidy :

1. INR 1.50 Lakh subsidy for General category and 1.98 Lakh for SC/ST individuals.
2. The Maximum amount has been fixed at INR 15,000 (20,000 for SC/ST farmers) in the case of a single(one) animal unit.

Dairy farm

2. Rearing of Heifer Cows up to 20 calves 

Investment :

INR 5.50 Lakh for 20 calves

Subsidy :

1. INR 1.37 Lakh subsidy for General category and INR 1.83 Lakh for SC/ST  individuals.
2. The 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


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

4. Purchase of dairy processing equipment producing indigenous milk products

Investment :

INR 13.20 Lakh

Subsidy :

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

Dairy farmer

5. 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.

6. 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 the 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 is eligible for refinance from NABARD.


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