A Scheme named “Supporting Dairy Cooperatives and Farmer Producer Organizations engaged in dairy activities” was approved to provide working capital loan to State Cooperatives and Federations. An amount of Rs. 303 crore has been released to National Dairy Development Board till December 2021 for implementation of the scheme.
- To assist the State Dairy Cooperative Federations by providing soft working capital loan to tide over the crisis on account severely adverse market conditions or natural calamities.
- To provide stable market access to the dairy farmers.
- To enable State Cooperative Dairy Federations to continue to make timely payments of dues to the farmers.
- To enable the cooperatives to procure milk at a remunerative price from the farmers, even during the flush season.
On account of economic difficulties faced by the dairy cooperatives and Producer Owned Institutions due to Covid-19 lockdown, it was decided to incorporate the component of “Interest Subvention on working capital loans” with an outlay of Rs. 100 crore during the year 2020-21 under the above scheme. Meanwhile, the component of working capital loans under the scheme has been kept in suspension during 2020-21. Based on the demand, the Standing Finance Committee (SFC) under the Chairmanship of Secretary (AHD) has increased the outlay to Rs. 203 Crore for “interest subvention on working capital loan”. The “working capital loan component” was kept in suspension for 2021-22 also in order to provide interest subvention on working capital loan.
The interest subvention component is being implemented by the Department through NDDB. The scheme provides for interest subvention of 2% p.a. on working capital loans availed by the eligible Participating Agencies (PAs) from banks and financial institutions. For prompt and timely repayment, additional interest subvention of 2% p.a will be payable at the end of the loan repayment period. The products covered under the scheme for availing working capital loans are Skimmed Milk Powder (SMP), Whole Milk Powder (WMP), White Butter and Ghee.
Union Cabinet approved implementation of Supporting Dairy Cooperatives and Farmer Producer Organizations engaged in dairy activities (SDCFPO) as a part of Umbrella Scheme “ Infrastructure Development Fund “ from 2021-22 to 2025-26 with an outlay of Rs 500 Cr.
Progress( as on 04.08.2022):-
NDDB have conveyed sanction of Interest Subvention amount of Rs 151.02 crore against working capital loan amount of Rs 10588.64 Cr @ 2% p.a for 55 milk unions and released Rs 155.78 Cr (Rs 78.50 Cr as regular interest subvention and Rs 77.28 Cr as additional interest subvention amount)for the year 2020-21.
For the year 2021-22, NDDB have conveyed sanction of Interest Subvention amount of Rs 208.88crore against working capital loan amount of Rs 13748.85 Cr @ 2% p.a for 60 milk unions and released Rs 107.11 Cr ( Rs 79.51 Cr as regular interest subvention and Rs 27.60 Cr as additional interest subvention amount).
For the year 2022-23, NDDB have conveyed sanction of Interest Subvention amount of Rs 50.63 crore against working capital loan amount of Rs 3567.11 Cr @ 2% p.a for 13 milk unions. No releases were made so far.