Dairy Finance Nabard

Dairy finance schemes supported by the National Bank for Agriculture and Rural Development (NABARD) play a crucial role in bolstering India’s dairy sector, which is a significant contributor to the nation’s agricultural economy and rural livelihoods. NABARD acts as an apex development bank, providing refinance and other support to banks and financial institutions that lend to dairy farmers, entrepreneurs, and cooperatives.

NABARD’s involvement stems from the understanding that access to adequate and timely finance is essential for enhancing milk production, improving animal management practices, and establishing efficient dairy processing and marketing infrastructure. These schemes aim to address the financial needs of the entire dairy value chain, from procuring high-yielding cattle to setting up chilling plants and processing units.

Several specific schemes are implemented with NABARD’s backing. One prominent example is the Dairy Entrepreneurship Development Scheme (DEDS). This scheme provides capital subsidies for establishing small-scale dairy units, purchasing milch animals, and constructing sheds. The objective is to encourage self-employment opportunities in rural areas and promote the adoption of modern dairy farming techniques. The subsidy component reduces the financial burden on beneficiaries, making it easier for them to invest in their dairy operations.

NABARD also supports the creation of infrastructure for milk collection and processing. This includes financial assistance for establishing milk chilling plants, processing units (for products like cheese, butter, and milk powder), and packaging facilities. Improving infrastructure helps reduce milk spoilage, add value to dairy products, and increase the overall profitability of the dairy sector. The emphasis is on promoting both organized and unorganized segments of the dairy industry.

Furthermore, NABARD facilitates the strengthening of dairy cooperatives. Cooperatives play a vital role in aggregating milk from smallholder farmers, providing them with access to markets, and ensuring fair prices. NABARD provides financial assistance to cooperatives for infrastructure development, technology upgradation, and capacity building. This support enables cooperatives to operate efficiently and serve as a conduit for improving the economic well-being of dairy farmers.

NABARD’s dairy finance schemes are typically implemented through commercial banks, regional rural banks, and cooperative banks. NABARD provides refinance to these institutions, reducing their cost of funds and encouraging them to lend to the dairy sector. The impact of these schemes is reflected in increased milk production, improved animal productivity, enhanced rural incomes, and the creation of employment opportunities in the dairy sector.

In addition to financial assistance, NABARD also focuses on capacity building and training programs for dairy farmers and entrepreneurs. These programs cover various aspects of dairy farming, including animal nutrition, disease management, breeding techniques, and dairy processing. Enhancing the skills and knowledge of dairy farmers is crucial for improving productivity and ensuring the sustainability of dairy operations.

Despite the significant progress made, challenges remain. Access to finance can still be a barrier for small and marginal farmers. There is also a need to improve the efficiency of milk procurement and processing systems. Continued efforts are needed to strengthen the dairy value chain, promote innovation, and ensure that dairy farming remains a viable and sustainable livelihood option for rural communities. NABARD is committed to addressing these challenges and further developing the dairy sector through its various financial and developmental initiatives.