Dairy/Poultry venture capital funds

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 of traditional technology to handle commercial scale using modern equipment and management skills, the Venture Capital Fund for Dairy and Poultry sector was started in Xth plan and Planning Commission has approved the scheme for continuation during XI plan with an enhanced outlay of Rs 300 crore. However the dairy and poultry components have been separated into two new schemes during 11th Plan and are now termed as Dairy Venture Capital Fund (DVCF) with a separate allocation from 2009-10. Under the scheme, financial assistance is provided as loan to the rural/urban beneficiaries under a schematic proposal through bankable projects.

 This scheme was approved in Dec. 2004 i.e. during 10th Five Year Plan with a total outlay of Rs 25.00 crore against which an amount of Rs 28.00 crore were released. The scheme is being implemented through NABARD and the funds released by GOI to NABARD are kept as revolving fund. Since inception, a sum of Rs 142.99 crore has been released to NABARD for implementation of scheme throughout the country. An amount of Rs 12.00 crore has been released during the year 2010-11 ( 31.08.2010).

 Pattern of Assistance:

1. Entrepreneur’s contribution - 10%
2. Interest free Loan from revolving fund provided by GOI - 50%
3. Bank loan at interest applicable for agricultural activities - 40%

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

 The components funded under the scheme are placed at Annexure I.

 Financial & Physical Progress under the scheme:

 Since inception of the scheme a total of 18184 Dairy Units have been sanctioned with a total interest free loan amount of Rs 174.39 crore till 31st August 2010.

 Year-wise amount of Funds sanctioned by NABARD to participating banks during 2005-06 to 2010-11 ( upto 31.08.2010) for release of Interest Free Loan are as under:-

Year	RE	Release by GOI	Amount sanctioned by NABARD (Rs crore) Dairy	Unit sanctioned  Dairy
2005-06	12.00	15.80	9.81	1014
2006-07	15.00	12.20	15.88	1858
2007-08	49.99	49.99	33.36	2972
2008-09	35.00	35.00	39.71	4805
2009-10	20.00	20.00	48.15	4719
2010-11	32.40	12.00	27.48	2816
Total		144.99	174.39	18184

 *Though the scheme was approved during 2004-05, funds were released for implementation of the scheme for the first time in the year 2005-06.

#DVCF scheme has been modified and renamed as Dairy Entrepreneurship Development Schme (DEDS) in EFC meeting held under the Chairmanship of Secretary (ADF) on 24.06.2010 . The DVCF scheme  come to close on 31.08.2010

Annexure-I

Dairy Sector:

Sr. 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. 

Dairy Venture Capital Fund

 Objectives of the scheme:

1. To promote setting up of small dairy farms for milk production.
2. To bring structural changes in the unorganized sector: processing and marketing of pasteurized milk at village level.
3. To bring about upgradation of quality and traditional technology to handle milk on a commercial scale.

Implementing Agencies: National Bank for Agriculture & Rural Development (NABARD) will be the Nodal Agency for implementation of the scheme. Commercial Banks, Co-operative Banks and Regional Rural Banks will implement the scheme. The scheme is open to organized as well as unorganized sector.

 Target group/beneficiaries: The Department has proposed this scheme for dairy development in the unorganized sector by providing financial assistance through NABARD to the promoter on the basis of bankable project recommended by NABARD. This scheme shall also help in employment generation at village level as well as Dairy Co-operative Society level.

 Pattern of Assistance:

1. Entrepreneur’s contribution - 10%
2. Interest free Loan from revolving fund provided by GOI - 50%
3. Bank loan at interest applicable for agricultural activities - 40%

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

 Year when the scheme started: Dairy/Poultry Venture Capital Fund scheme was started in Dec 2004 with an outlay of Rs 25.00 Crore. The fund was released during 2005-06 for the first time for implementation of the scheme. Planning Commission has approved the scheme for continuation during XI plan with an enhanced outlay of Rs 300 crore. However the dairy and poultry components have been separated into two new schemes during 11th Plan and are now termed as Dairy Venture Capital Fund (DVCF) with a separate allocation from 2008-09

 Annual Outlay/Expenditure (Central Assistance):

Rs in crore

Year	2005-06	2006-07	2007-08	2008-09	2009-10	2010-11#
RE/BE provision	14.00	15.00	49.99	35.00	20.00	32.40
Expenditure	15.80*	12.20*	49.99*	35.00*	20.00*	12.00*

 

*Fund has been released, to be kept as revolving fund by NABARD to provide interest free loan to the beneficiaries.

#DVCF scheme has been modified and renamed as Dairy Entrepreneurship Development Schme (DEDS) in EFC meeting held under the Chairmanship of Secretary (ADF) on 24.06.2010 . The DVCF scheme  come to close on 31.08.2010

 Physical Targets and achievements: No physical targets have been specified, as it is a demand driven scheme. Progress as on 31st August 2010 indicates sanctioning of 18184 Dairy Units with revolving fund assistance of Rs 174.39 crore.

 Click here to view State wise disbursement of Interest Free loan by NABARD since inception of the scheme.

 For further details contact:

Director (Dairy Development), Department of Animal Husbandry, Dairying & Fisheries, Krishi Bhawan, New Delhi-110 001.Tel.fax : 011-23388688.