Dairy Entrepreneurship Development Scheme (DEDS) - 2014

Centrally Sponsored Scheme
By   GOI, MOA, DAHD. New Delhi.
F.No.1-1/2009-DP dated 8th. May, 2014.

Budget provision Rs. 229.99 crores for the Year 2014-15
 Through: NABARD

Govt. of India has announced continuation of a scheme named as “Dairy Entrepreneurship Development Scheme” (DEDS). The scheme has come in to operation with effect from 1 September 2010. The planning commission GOI has approved the continuation of DEDS with an outlay of Rs.1400.00 crores during, 12th. Five Year plan. Budget provision for the scheme during the year 2014-15 is Rs.229.99 crores (Rs.135.99 crores for Gen. Comp., Rs.44.00 crores for SC comp. & Rs.50.00 crores for NER plan) has been approved as per letter No.1-1/2009-DP, GOI, MOA, DAHD, New Delhi dated 8th. May, 2014. The department of Animal Husbandry, Dairying & Fisheries (DAHD&F), Ministry of Agriculture, GOI, is the focal department for operating the scheme. The sanction & release of subsidy will be managed by NABARD & is subject to availability of funds & adherence of the instructions issued by DAHD&F, GoI and NABARD from time to time.
Objectives of the scheme
  • To promote setting up of modern dairy farms for production of clean milk
  • To encourage heifer calf rearing thereby conserve 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 bring about up gradation of quality and traditional technology to handle milk on a commercial scale
  • To generate self employment and provide infrastructure mainly for unorganized sector.


“Dairy Entrepreneurship Development Scheme” (DEDS) Guidelines in short:-

A. Implementing period and Area of operation
The scheme will be implemented through out the country for financing of milch animals etc. The scheme has received overwhelming response from dairy entrepreneurs across the country. The planning commission GOI has approved the continuation of DEDS with an outlay of Rs.1400.00 crores during, 12th. Five Year plan.

B. Eligibility
  1. Farmers, individual entrepreneurs, NGOs, companies, groups of unorganized and organized sector etc. Groups of organized sector include self help groups, dairy cooperative societies, milk unions, milk federations etc.
  2. An individual will be eligible to avail assistance for all the components under the scheme but only once for each component
  3. More than one member of a family can be assisted under the scheme provided they set up separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 500m.

C. Subsidy.
The capital subsidy will be back ended with minimum lock-in period of 3 years.

D. Components that can be financed:

Indicative unit cost and pattern of assistance are given below:
E. Funding pattern
  1. Entrepreneur contribution (margin) - 10 % of the outlay (minimum)
  2. Back ended capital subsidy - as indicated above at 5.1.
  3. Effective Bank Loan - Balance portion, Minimum of 40% of the outlay

F. Linkage with credit
Assistance under the scheme would be purely credit linked and subject to sanction of the project by eligible financial institutions. After the disbursement of first installment of the loan, the bank shall apply to the concerned Regional Office of NABARD for sanction and release of subsidy in the format given in Annexure.

G. Eligible financial institutions
  • Commercial Banks
  • Regional Rural Banks
  • State Cooperative Banks
  • State Cooperative Agriculture and Rural Development Banks: and
  • Such other institutions, which are eligible for refinance from NABARD.
The entrepreneurs shall apply to their banks for sanction of the project. The subsidy shall be released on first come first serve basis subject to availability of funds.

E. Repayment
  1. Repayment Period will depend on the nature of activity and cash flow and will vary between 3- 7 years. Grace period may range from 3 to 6 months in case of dairy farms to 3 years for calf rearing units (to be decided by the financing bank as per needs of individual projects).
  2. The recovery of loan will be based on net loan amount only. i.e. not including subsidy, which will be adjusted by the concerned bank after effective bank loan and interest thereon has been repaid. i.e. the repayment schedules will be drawn on the total amount of the loan (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy).

F. Rate of Interest
Rate of interest on the loans shall be as per RBI guidelines and declared policy of the concern bank.

G. Security
The security for availing the loan will be as per guidelines issued by RBI from time to time.

H. Time limit for Completion of the project.
  • Time limit for completion of the project (except for calf rearing units where disbursements are expected to continue till two years) would be as envisaged under the project, subject to maximum of 9 months period from the date of disbursement of the first installment of loan which may be extended by a further period of 3 months, if reasons for delay are considered justified by the financial institution concerned.
  • If the project is not completed within the stipulated period, benefit of subsidy shall not be available and advance subsidy placed with the participating bank, if any, will have to be refunded forthwith to NABARD.
Note: For detail circular on the scheme pl. log on: www.nabard.org, www.dahd.nic.in

To help you to understand the economics of dairy farming, I have prepared a summary of the project cost including essential items of investment to maximize the income from the dairy farm with the latest information to my knowledge. The costs indicated below are just a sample cost.
 The breeds of the milch animal considered in this cost estimate are Graded Murrah/ Murrah buffaloes/ Cross breed cows with an average yield of 10 litres milk per day per animal (LMPDA) for 300 days of lactation cycle & 100 days of dry period.
Financial Analysis Results
Based on the lactation chart, the cash flow has to be prepared and the financial analysis of the project has to be done which should reveal –
  1. BCR at 15% D.F= should be more than 1
  2. IRR = should be more than 15%
For detail bankable project report pl. Contact : 09422355411

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