Loan for Dairy Farm and Schemes: Empowering the Dairy Sector in India

Introduction

Dairy farming remains a vital pillar of India’s agrarian economy, empowering millions of farmers with livelihoods, nutrition, and stability. Yet, the journey from a small-scale dairy unit to a thriving enterprise often hinges on timely access to credit. Whether you're just starting or looking to scale up, loan schemes tailored for dairy farms can be a game-changer.

In this post, we’ll dive into the latest loan for dairy farm and schemes, spotlighting financial support from banks and government programs, plus how to navigate them strategically.

1. Why Special Dairy Farm Loans Matter

Launching or expanding a dairy farm demands investment—purchasing cattle, building sheds, installing milking machines, and handling day-to-day working capital. Typical farm loans generally aren’t fit for purpose. Dairy-specific loan schemes offer tailored advantages like affordable interest rates, moratoriums, collateral-free options, and tailored tenors, enabling smoother growth for farmers.

2. Lending Options: Bank & NBFC-Dairy Farm Loans

• SBI’s “YONO Krishi Safal Dairy Loan”

• Interest rate: From 10% per annum.
• Loan purposes: Infrastructure—milk houses, chilling units, collection equipment, vehicles.
• Amount ranges: ₹1 lakh (automatic milk collection system) to ₹4 lakh (chilling unit).
• Repayment: Up to 5 years with a 6-month grace period.
• Security: Land mortgage or cooperative guarantees.

• Bank of Baroda – Mini Dairy Units Scheme

• Loan range: ₹60,000 to ₹6 lakh for units of 2–10 milch animals.
• Up to 5 years repayment + 3 months moratorium; margin 10%.
• Eligible applicants include individuals, SHGs, JLGs, NGOs.

• Central Bank of India – Cent Dairy Scheme

• Rates from ~8.05% to ~9.55%, depending on loan size.
• Flexible terms: 3–7 years, processing fees minimal, collateral required only for loans above ₹2 lakh.

• J&K Grameen Bank

• Tailored for local communities with loan tenure up to 6 years, margin ~10%.
• Applicants must have knowledge of dairy farming, within age 18–70.

• Lendingkart Finance (NBFC)

• Monthly interest 2%–6%, funding up to 85% of the project cost, repayment up to 7 years.
• Zero pre-closure charges; requires prior dairy experience.

• HDFC Bank – Dairy Power Loan

• For maintenance of existing cattle: eligible only if you already own two cattle, 18–60 years of age, with 0.5 acres land or capped at ₹2 lakh for landless farmers.

• Federal Bank

• Offers both term loans and cash credits for setting up or expanding dairy farms.

3. Government Schemes That Complement Dairy Loans

• Dairy Entrepreneurship Development Scheme (DEDS)

Although the official DEDS ended by FY 2020–21, its essence persists—offering 25% subsidy (33% for SC/ST) to support small dairy units.

• National Livestock Mission & Rural Infrastructure Funds

Both schemes support assets like fodder systems, breeding infrastructure, and cold storage facilities.

• Animal Husbandry Infrastructure Development Fund (AHIDF)

Offers 3% interest subvention to establish value-add and processing infrastructure (e.g., chillers, powder units). Beneficiaries include FPOs, entrepreneurs, cooperatives.

• Agricultural Infrastructure Fund (AIF)

Provides 3% interest subsidy up to ₹2 crore for infrastructure development—cold storage, logistics, value chains for dairy included.

• Kisan Credit Card (KCC)

A flexible credit line for short- and medium-term needs. Covers cattle purchase, infrastructure, with insurance benefits and extended validity.

• Supporting Dairy Cooperatives & FPOs under Infrastructure Development Fund

A recently approved central-sector scheme running until 2025–26. Provides working capital loans with 2% interest subvention to cooperatives and FPOs via NDDB.https://startupflora.com/

• Kamdhenu Yojna (UP-specific)

Provides interest-free loans and subsidies to set up high-yield dairy farms for entrepreneurs in Uttar Pradesh.

4. Recent Developments & Broader Context

• India’s 2025–26 agri-budget: Upped agri-allied allocations (~₹1.75 trillion), including focus on dairy infrastructure and raising subsidized loan limits from ₹3 lakh to ₹5 lakh per farmer.
• Political & regional initiatives:
  • Bihar govt approved ₹316 crore for dairy infrastructure via Comfed under SIDBI support.
  • In Arunachal Pradesh, SBI’s outreach disbursed agri loans and encouraged farmers to leverage schemes like KCC and FPOs.

5. Navigating the Right Path for Your Dairy Loan

1. Clarify your needs
   • Are you buying cattle, building sheds, upgrading equipment, or expanding production?
2. Assess your eligibility
   • Have dairy experience? Land holding? Cattle present? Cooperative affiliation? SC/ST? Women entrepreneur?
3. Pick the right lender and loan
   • Small-scale individual? Explore SBI, Baroda, Cent Dairy.
   • Need flexibility and higher credit? Try Lendingkart NBFC.
   • Want subsidized infrastructure loans? Consider AHIDF, AIF, or state-level schemes.
4. Stack benefits
   • Apply for both bank loans and subsidy programs like DEDS or AHIDF to lower your effective cost of borrowing.
5. Prepare documentation
   • Bank statements, project plans, financials, KYC, land/collateral details, experience certificates, and subsidy application forms.
6. Build cooperative strength
   • Loans via SHGs, JLGs, or dairy coops often come with better terms and collateral flexibility.

Conclusion

We are at StartupFlora helps to you in your growth. From national banks to NBFCs, government subventions to regional schemes, a range of loan for dairy farm and schemes exists to support every stage of dairy expansion. Whether you’re starting small with two cows or setting up a processing unit, these avenues—especially when combined intelligently—can propel growth sustainably.