Dairy/Poultry Venture Capital Fund

To bring about structural changes in the unorganized sector, the measures like milk processing at village level, marketing of pasteurized milk in a cost effective manner, quality up-gradation and up-gradation of traditional technology to handle commercial scale using modern equipment and management skills and to encourage new species of birds and low input technology for poultry farming among rural farmers, a new scheme, the Venture Capital Fund for Dairy and Poultry sector is being introduced. The assistance under the scheme shall be provided to the rural beneficiaries under a schematic proposal through bankable projects. 

It is a new central sector scheme approved by the EFC with an outlay of Rs.25.00 crores for implementation in the 10th Five Year Plan. The scheme will be implemented through NABARD. The budget provision of Rs.7.2 crores has been provided for implementation of the scheme during the year 2004-05.The administrative approval of the scheme has been issued on 14th December 2004. 

Pattern of Assistance 

· Entrepreneur’s contribution 10%
· Loan from revolving fund at ‘Zero’ interest 50%
· Bank loan at interest applicable for agricultural activities 40%

Government of India will subsidize the interest component applicable for agricultural activities to the extent of 50 % only in case of regular/timely repayment by the beneficiary. 

Objectives and aim of the scheme

Dairy sector

 Establishment of small dairy farms.
 Establishment of private veterinary clinics.
 Purchase of milking machines, milkotester, bulk coolers, bactotesters, etc.
 Dairy processing equipment for manufacturing indigenous milk products.
 Dairy product transportation facilities including cold chain.
 Storage facilities for milk and milk products.

Poultry sector

 Establishing of poultry breeding farm with low input technology birds and also for ducks/Quails/ Turkeys/ Guinea Fowl/Ostrich etc.
 Setting up of a poultry feed plant along with a laboratory.
 Setting up of egg grading, packing and storing unit for export of eggs.
 Marketing of Poultry products (specialized transport vehicle, cold room storage facilities and retention sheds for birds).
 Establishing retail poultry dressing unit (300-500 birds/day).
 Purchase of egg/broiler carts for sale of poultry products
 Incentive on export of poultry products (freight charges).
 Purchase of reading material and A.V. equipment for training and extensions activities.

Implementing Agencies

It is a new Central Sector Plan Scheme. Department of Animal Husbandry, Dairying & Fisheries, Government of India would be implementing the scheme through NCDC/NABARD.

Target group/beneficiaries

The Department has proposed this scheme for overall poultry & dairy development in the unorganized sector by providing financial assistance through NABARD/NCDC to the promoter on the basis of bankable project recommended by NABARD/NCDC. This scheme shall also help in employment generation at village level as well as Dairy Cooperative Society level.

Year when the scheme stated

This is a new scheme yet to be approved by the Expenditure Finance Committee; however an outlay of Rs. 25.00 Crore has been made for its implementation during the Tenth Five year plan.

Annual Outlay (Central assistance)
 

Year

Outlay(Rs. in Lakhs)

2002-03

50.00

2003-04

300.00

2004-05

450.00.

2005-06

850.00

2006-07

850.00

 

 

Physical Targets  There is no physical target fixed under the scheme.

Achievement The scheme is under consideration of Expenditure Finance Committee.

F.N0.1-2/02-DP
Government of India
Ministry of Agriculture
Department of Animal Husbandry and Dairying

Krishi Bhawan, New Delhi-110001
Dated the 14th December, 2004.


OFFICE MEMORANDUM


Subject: Central Sector Plan Scheme – “DAIRY/POULTRY VENTURE CAPITAL 
FUND” implementation during 10th Plan period – administrative approval 
for.

Milk production in India is characterized by small rural producers scattered all over the country accounting for about 70% of production. In India, a far larger proportion of milk continuous to be handled by the unorganized sector i.e. 85% comprising enumerable small processors and manufacturers of indigenous milk products. But the main contention in the unorganized sector is the quality, which creates a serious threat to human health. Similar is the case with poultry, where considerable segment is still unorganized. In the absence of organized marketing, the poultry development programme under the cooperative sector is not able to make a dent. 

2. The Government of India has been considering a proposal to provide financial assistance for setting up/modernization of dairy and poultry sector. The interventions through the scheme involve the generation of self employment and providing infrastructure to the unorganized sector for making improvement in the quality resulting in food safety. It will help in bringing a significant portion of unorganized sector in the ambit of organized sector and will result in increasing the commercial viability of the activities.

3. The scheme considered and approved by the competent authority, will be implemented through National Bank for Agriculture and Rural Development (NABARD), which will be the nodal agency for the scheme. Now, the undersigned is directed to convey the administrative approval for implementation of the said Central Sector Plan scheme “DAIRY/POULTRY VENTURE CAPITAL FUND” during the 10th Plan period. The scheme has been approved with the guidelines given in the para 4. The total central outlay for the scheme for the 10th Plan period would be Rs.25.00 crores with a budget provision of Rs.7.2 crores in the year 2004-05.

4. The guidelines for the approval of the project under the scheme shall be as below:

i) The financial assistance of 50% of the project cost will be provided by Government of India as interest free loan while 40% of the project cost shall be provided by the financing bank at the rate of interest as applicable for agricultural activities and 10% share of the project cost shall be borne by the beneficiary. Besides this, Government of India will also subsidize the interest component applicable for agricultural activities to the extent of 50% in case of regular/timely repayment by the beneficiary.

ii) The Government of India will release its share to NABARD, which will be maintained by them as revolving fund.

iii) The scheme will be extended to agricultural farmers/individual entrepreneurs and groups of all sections of unorganized as well as organized sector.

iv) The components, which can be funded under the scheme, are given below. However, they may be funded individually or in combination.

Poultry Sector:

Sl.No.

Component

Maximum total project cost*

(Rs. in lakhs)

1.

Establishing poultry breeding farm with low input technology birds and also for ducks/turkey/Guinea Fowl/Quail/Emu/Ostrich etc.

 

30.00

2.

Establishment of feed go-down, feed mill, feed analytical laboratory

16.00

3.

Marketing of poultry products (Specialized transport vehicles, cool room storage facilities and retention sheds for birds etc.)

25.00

4.

Egg grading, packing and storage for export capacity

80.00

5

Retail poultry dressing unit (300 birds per day).

  5.00

6.

Egg/broiler carts for sale of poultry products.

  0.10

7.

Central grower unit (12,500 birds per batch and 4 batches per year)

20.00

 Dairy Sector:

Sl.No.

Component

Maximum total project cost*

            (Rs. in lakhs)

1.

Establishment of small dairy farms-Ten animal unit (buffaloes/cross breed cows) for milk production

Rs.3.00 lakhs per unit (upto ten animals)

-Any Non Operation Flood areas.

-The total cost depends on the infrastructural facilities required.

2.

Purchase of milking machines / milkotester / bulk milk cooling unit etc.

Rs.15.00 lakhs

Milking Machine, Milk-o-tester

Bulk Milk Cooling units (upto 2000 lts capacity)

3.

Purchase of dairy processing equipment for manufacturing indigenous milk products.

Rs.10 lakhs per unit

-Unit cost depends upon the quantum of milk to be handled and the type of products to be manufactured

-The total cost depends upon the investment on civil structures, type and source of machinery.

 

4.

Establishment of dairy product transportation facilities including cold chain.

Rs.20 lakhs per unit

-Unit cost depends upon the quantum of milk/milk products to be transported / handled and the type of products to be transported

-The total cost depends upon the investment on type and source of transport vehicle and machinery

5.

Cold storage facilities for milk and milk products.

Rs. 25 lakhs per unit

- Unit cost depends upon the quantum of milk/milk products to be stored and the type of products to be stored

-While the cost depends upon the investment on type and source of machinery used.

6.

Establishment of private veterinary clinics.

Rs.2.00 lakhs per unit for Mobile clinics and Rs.1.5 lakhs for Stationary clinic

-  Area of operation from 8 to 10 villages having 5000 to 6000 cattle units.

* The Government of India will provide 50% of the total approved project cost as interest free loan. 


v) NABARD shall work out the modalities in consultation with the commercial banks and Department of A.H. & Dairying for implementation of the scheme.

vi) The proposals will be sanctioned by the commercial banks as per the guidelines of RBI, NABARD and Government of India.

vii) The recovery of loan, when made, will be divided between the GOI’s share and the Bank’s share of loan on pro-rata basis. Similarly, the loan will be disbursed simultaneously from the revcolving fund as well as banker’s share on pro-rata basis.

viii) NABARD will submit quarterly report to DAH&D giving information on number of proposals received, sanctioned, farmers/ entrepreneurs benefited, release of funds, funds sanctioned, recovery of loan etc.

ix) A Joint Monitoring Committee consisting of representatives of NABARD and the concerned Banks under the Chairmanship of Joint Secretary(DD&P) will oversee the implementation of the scheme.

x) The scheme will be reviewed towards the end of the tenth plan and suitably amended based on the feedback of implementing agency and the constraints/difficulties encountered in the implementation of the scheme.

(Amarjeet Kaur)
Director (Dairy Development)


Distribution:

1. Principal Accounts Officer, Ministry of Agriculture, Department of Animal Husbandry and Dairying, 16, Akbar Road Hutments, New Delhi-110011.

2. The Accountant General, Commerce, Works and Miscellaneous, AGCR Building, Near ITO, New Delhi-110002.

3. Chief Controller of Accounts, Department of Agriculture and Cooperation, Krishi Bhavan, New Delhi.

4. Advisor (Agriculture), Planning Commission, Yojana Bhavan, New Delhi.

5. Additional Secretary & Financial Advisor, Deptt. of Animal Husbandry & Dairying, Krishi Bhavan, New Delhi

6. Dr. C.O. Reddy, Deputy General Manager, NABARD, C-24 ‘6’ Block, Bandra-Kurla Complex Bandra (East), Mumbai - 400051

7. Joint Secretary (Admn.), Room No.199, Ministry of Rural Development, Krishi Bhawan, New Delhi.

8. Joint Secretary (PF-II), Ministry of Finance, Department of Expenditure, North Block, New Delhi.

9. Joint Secretary, Ministry of Finance, Department of Economic Affairs, Banking Operation and Administration Division, Room No.6, 3rd Floor, Jeevan Deep Building, Parliament Street, New Delhi.

10. Managing Directror, NDDB, P.B.No.40, Anand 388001.

11. AC(P) and DC(LH)

Copy for information to: PPS to Secretary (AH&D)/ PPS to JS(DD&P)/ PA to Director (DD).

(Amarjeet Kaur)
Director (Dairy Development)