Dairy Entrepreneurship Development Scheme

Dairy Entrepreneurship Development Scheme (DEDS) has been in existence in 2009 to provide a boost to the dairy sector by providing capital subsidy for purchasing of farm animals or milking machines or other dairy-related activities. The scheme has been continued in the year 2015-16 with a budget provision of Rs.127 crores. In this article, we look at the Dairy Entrepreneurship Development Scheme in detail.

Objective of DEDS

The objective of the Dairy Entrepreneurship Development Scheme is to generate self-employment and develop infrastructure for the dairy sector in India. The scheme also aims to help entrepreneurs to set up a modern dairy farm, infrastructure for the production of clean milk and encourage heifer calf rearing for conservation and development of good breeding stock.

In addition to helping farmers and Entrepreneurs with a subsidy, the scheme also plans to bring about structural changes in the unorganised dairy sector, so that initial processing of milk can be taken up at the village level. Further, the scheme aims to provide up-gradation of technology for handling milk on a commercial scale and provide value addition to milk through processing and production of milk products.

Implementation of the DEDS

The dairy entrepreneurship development scheme is being continued in the year 2015-16, across India. The scheme is implemented by the National Bank for Agriculture and Rural Development (NABARD). In the year 2015-16, Rs.127 crores have been set aside for the dairy entrepreneurship development scheme with Rs.99 crores for general components, Rs.11 crores for SC component and Rs.17 crores for North Eastern Regions.

Eligibility Criteria

Farmers, individual Entrepreneurs and Groups of the unorganised and organised sector. Groups of the organised sector including self-help groups, dairy cooperative societies, Producer Companies, milk unions, milk federations, Panchayat Raj Institutions are eligible for the scheme.

Further, only one member of a family will be eligible for the scheme, unless the other member establishes a separate unit with separate infrastructure, at least 500 metres away from the other unit.

Subsidy Provided under DEDS

Subsidy under Dairy Entrepreneurship Development Scheme is provided only for those able to obtain bank loan sanction for the project. Financial institutions eligible to finance the scheme include:

Commercial Banks
Regional, Rural and Urban Banks
State Cooperative banks
State Cooperative Agriculture and Rural Development Banks
Other institutions are eligible for refinancing from NABARD

For those dairy projects which are bank loan funded, NABARD provides a back-ended capital subsidy of 25% of the project cost for General Category and 33.33% for SC/ST farmers. The entrepreneurs must contribute 10% of the total project cost for loans over Rs.1 lakh and a bank loan will be used to fund the balance portion.

Funding Pattern

The entrepreneur has to contribute 10% of the total amount initially as margin money. When the project gets completed, the remaining amount will be provided and the entire sanctioned amount will be charged at 5.1% interest rate. NABARD has collaborated with the many nationalised banks which will release the funds after due diligence and the eligibility is approved by the exclusive committee formed by the banks. The repayment of the loan can be done in 3 to 7 years with the grace period of 3 to 6 months based on the loan which will be solely decided by the banks. The guidelines to the DEDS along with the application forms can be accessed below:

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Know more about the NABARD subsidy for dairy farms.