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1. HI - TECH COMMERCIAL DAIRY
 
 
       Hi-Tech commercial Dairy as a new plan scheme is proposed to be implemented in the State starting from the year 2008-09. The scheme in principle stands approved by the Govt. It will be the part of the existing scheme of self employment and will be implemented with additional funds to be provided under the head and the detail of the scheme is as under:-
       It needs no emphasis that India happens to be the goldmine of farm livestock resources. It possesses more than half of the buffalo population of the world with a majority of the recognized breeds. The Indian Dairy Industry with a large number of Dairy Entrepreneurs in rural areas has made a tremendous impact on the agrarian economy of the country. With present production level of 98 million tons milk per annum, India ranks first in t he world and 55% of the total milk produced comes from buffaloes. (The world trade in milk and milk products is about US$ 10 billion.) India's present export earnings from milk and milk products are mere 0.06 percent of global trade. The Agriculture and processed food products have a large scope in the global market. It is expected that through optimal utilization of resource base and the induction of advance technology Indian Dairy Production can scale new heights.
      Haryana holds a special place in the field of milk production and it is truly known as the 'Milk Pail' of the country 80% of the State milk comes from buffaloes alone. The State is proud to be the home-tract of one of the best buffalo breeds of the world i.e. 'Murrah'. Buffalo has also been recognized to be the animal of the 21st Century and thus, systematic improvement of buffaloes for milk production of the country is a goregone conclusion. There is a great demand of this high yielding elite breed not only from within but outside the country as well. Most5 of the States procure breeding stock from Haryana for upgradation of their low producing buffaloes. The State is quite conscious of conserving, improving and fast multiplying this unique genetic stock of buffaloes by promoting breeding activities in the State.
      Milk production in the State is 54.72 lac M.T. out of which 80% is contributed by buffaloes. The per head milk availability in the state is 660 gm per day which is 2nd highest next to Punjab. According to livestock census-2007, the buffalo population in the state is 60.00 lacs and that of cattle population 15.00 lacs.
      The State has a vast potential of self employment generation in the sector of Animal Husbandry & Dairying. Establishment of dairy units of 3,5,10,20 milch animals can alone generate substantial employment (Direct or Indirect) wherein loan is provided by the banks & subsidy by Govt. Normally, one person gains full time employment by keeping 2-3 milch animals. Similarly, for unit of 5,10,20 milch animals the other members of the family also again employment. The State is having a well developed infrastructure of veterinary institutions catering to the needs of the livestock owners providing veterinary services round-the-clock at their doorsteps. The State is also self-sufficient in fodder production and rich in human resource for providing training to the farmers as well as the field functionaries.
      The Department holds at every Sub Division in the State the regular 11 days dairy trainings for the persons interested in setting up of dairy units. Animal Husbandry is an integral part of Agriculture and next to Agriculture, is the major sector of employment. According to 18th Livestock Census-2007, about 22.27 lac families (Households) are engaged in livestock rearing alongwith agriculture. Though of these about 10.00 lacs families are drawing household income from tersary sector as major occupation even than are rearing milch animals or other livestock.
      To boost up the milk production, fodder production and generation of more & more employments in the qairy sector, it is proposed to establish bigger dairies with minimum of 20 or more milch animals.
      Commercial banks under Agriculture Finance w2ould finance the commercial dairy units. The marketing facility of milk is provided by HDDCF and other plant in the State. The model scheme for 20 milch animals would require the following amount or need based as demanded by the unit holder:-
Term loan Rs.8.5 lac
Working Capital Rs.2.5 lac
This amount is to be repaid in 7 years in 78 monthly installments with a moratorium period of 6 months.
The scheme is flexible and would be modified as per suitability of the farmer. Regarding rate of interest, the individual bank or banks would provide loan on preferential reduce rate as per guideline issued by RBI. Chiefly, the interest rate would be 2% less than the prevailing P.L.R., further 1% less for regular payees and further by 0.5% for women loanees. Further clarified that the financing banks would not charge any processing & other fees from farmers while sanctioning the loan.
The department would assist these dairy units in the following wayhs:-
i
Providing free trainings to the suitable dairy entrepreneurs.
ii
Sponsoring of loan applications to banks.
iii
50% sharing of cost of insurance of dairy animals.
iv
The subsidy @ 15% of the term loan to a maximum of Rs.1.50 lac to a commercial dairy unit would be provided.
v
Veterinary services at door step of farmers.
vi
Arrangement of marketing of milk through HDDCP etc.
The subsidy on sanction of loan will be released in advance to the financing bank to be adjusted as back ended. The farmer will be asked to set up the unit in a period of three months and the health certificate of the milch animals would be produced by the concerned Vety. Surgeon. 50% cost of insurance premium will be born by the Govt. under the scheme for an initial period of 3 years. In case the loanees do not set up the commercial unit, the bank will refund the advance subsidy to the department. The department proposes to set up 200 such dairy units during the year 2009-10 in the State for which a sum of Rs.3.00 crores will be required under plan budget.
Annexure – I
MODEL SCHEME FOR FINANCING HI-TECH COMMERCIAL DIARY
ELIGIBILITY:
Farmers having two or more milch animals. New farmers trained in dairy farming by the Department of Animal Husbandry & Dairying / Agriculture Universities / Other Agencies. Agriculture / Vety graduates may also avail loan.
PURPOSE:
To set up new Hi-Tech commercial dairy units & also for extension of the existing dairy units.
QUANTUM OF LOAN:
For a unit of 20 Milch Animals( preferably Murrah buffaloes & Crossbred Cows)
(Details Annexure -II)
Term Loan - Rs. 8.50 lac per unit
Working Capital - Rs. 2.50 lac per unit
(However the amount of loan shall depend on the actual cost of the project)
MARGIN:
Both for Working Capital & Term Loan @2% below PLR i.e 11% p.a.
A further concession of 1% p.a. on regular repayments shall be granted on yearly basis at the end of the financial year on loans of those farmers who’s repayment is regular during the year. In case of any default during currency of the loan, the concession for that period shall not be granted.
SUBSIDY BY Department of Animal Husbandry & Dairying:
i
15% of the term loan to a maximum of 1.50 lac per unit
ii
50% cost of insurance premium of milch animals for initial period of 3 yrs.
DISBURSEMENT OF LOAN:
FOR THE CONSTRUCTION OF SHED:
a
50% of cost of shed will be disbursed at the beginning by transferring into saving bank.
b
Remaining 50% of cost of shed will be disbursed after verifying the end use of the first 50% amount.
FOR THE PURCHASE OF ANIMALS:
 
After completion of shed, loan will be given initially for 10 animals. As soon as the farmer completes the purchase of first lot of 10 animals, the loan for the remaining 10 animals will be released. In order to help the farmers to purchase the animals of his choice the loan amount for animals will be released by transferring the amount to his saving bank account. However, the purchase of animals shall be actually verified by the Branch Staff and the local Vety Surgeon to ensure end use of loan.
 
REPAYMENT PERIOD:
 
TERM LOAN:
 
Loan shall be repaid in 7 years in 78 monthly installments with a moratorium period of 6 months.
 
WORKING CAPITAL:
 
To be sanctioned for one year & renewed thereafter
 
SECURITY:
 
PRIMARY:
 
Hypothecation of shed, livestock & other moveable assets financed by the bank.
 
COLLATERAL:
 
Registered mortgage of agriculture land or equitable mortgage of property having value at least 150% of total loan amount. In case the borrower does not own land in his name, then the land standing in the name of his father shall be mortgaged and he shall be made a guarantor also.
 
INSURANCE:
i
As per agreement of bank with identified insurance company or on the rate decided by the State Govt. whichever is minimum.
ii
Optional :- Personal Accidental Insurance of farmer for Rs. 1 Lac for a premium of Rs. 30 per year. Similarly the labourers engaged in the dairy farm and other family members of the farmer can be covered under the scheme at the same rate of premium.
 
PROCESSING FEE: NIL
 
UPFRONT FEE: NIL
 
INSPECTION CHARGES: NIL
 
CLASSIFICATION: Under Direct Agriculture Finance
Annexure-II
COST ESTIMATE FOR ESTABLISHING A MODEL DAIRY OF 20 MILCH ANIMALS
A. CAPITAL COST
1.
Cost of 20 Cross Breed Cows / Murrah Buffaloes @ Rs. 35,000/- per animal including transport charges
Rs. 700000.00
2.
Cost of animals shed & store cum office
Rs. 236000.00
3.
Milking equipment with site
Rs. 50000.00
4.
Cost of animal cooling unit
Rs. 14000.00
TOTAL FIXED EXPENDITURE
Rs. 1000000.00
1.
Less Margin @ 15% i.e. borrowers contribution
Rs. 150000.00
2.
Bank’s Finance (Term Loan)
Rs. 850000.00
B. RECURRING EXPENDITURE
1.
COST OF GREEN FODDER
30kg/Day/animal @100/- per quintal on average basis
Rs. 1,53,300.00
2.
COST OF DRY FODDER
10 Kg/day/animal @ Rs. 250/- per quintal
Rs. 1,82,500.00
3.
COST OF FEED/CONCENTRATES
5 kg/day/animal @ Rs. 900/- per quintal
Rs. 1,34,685.00
4.
LABOUR CHARGES
@Rs. 3,000/- p.m. for 2 labourers
Rs. 72,000.00
5.
MISCELLANEOUS EXPENSES
@ Rs. 1,500/- / animal p.a. (as veterinary expenses, electricity & water supply expenses)
Rs. 30,000.00
  TOTAL
Rs. 5,72,485.00
  COST OF FEED FOR CALVES
1.
COST OF GREEN FODDER
1.5 kg/ day/ calf/ @ 100/- per quintal
Rs. 76,650.00
2.
COST OF DRY FODDER
1 kg/ day/ calf @ Rs. 250/- per quintal
Rs. 18,250.00
  Total
Rs. 94,900.00
  TOTAL RECURRING EXPENDITURE
Rs. 6,67,385.00
  Less Margin @ 25% i.e. borrowers contribution
Rs. 1,66,846.00
 
Working Capital (as cash credit limit) Maximum Rs. 250000/- (working capital provided for 6 months recurring expenditures)
Rs. 2,50,270.00
  INCOME
 
Sale of Milk
(Average milk in lts. Per annum X No. of animals X Appx. Cost of milk/lts.) i.e. 3500 X 20 X 13
Rs. 9,10,000.00
  Value of Manure
Rs. 10,000.00
  Total Income
Rs. 9,20,000.00
  INCOME/EXPENDITURE ANALYSIS
  Total Income
Rs. 9,20,000.00
  Total Expenditure
Rs. 6,67,385.00
  Income after Expenditure p.a.
Rs. 2,52,615.00
  Monthly Income
Rs. 21,051.00
  Less Loan Installment
Rs. 15,000.00
  Net Monthly Income
Rs. 6,051.00
Note: 1. This is a model Scheme keeping in view the prevailing market rates. However, Branch Manager is authorized to sanction variations ± to the extent of 15%.
        2. Working Capital is calculated assuming that the farmer will keep stock of feed etc. for 6 months. However, the branches can consider the stock period for a minimum period of one month to maximum period for 6 months and accordingly working capital can be calculated and limit fixed in consultation with the farmer.
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