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Dairy Entrepreneurship Development Scheme – Launch Year, Eligibility and Benefits

Updated on :  

08 min read.

The Department of Animal Husbandry, Dairying and Fisheries introduced the Venture Capital Scheme for Dairy and Poultry in 2004. It aimed to boost self-employment and promote the development of small dairy farms and other components in the Indian dairy industry.

The government revamped the Venture Capital Scheme for Dairy and Poultry in 2010 to the Dairy Entrepreneurship Development Scheme (DEDS). The DEDS came into effect in September 2010. The Department of Animal Husbandry, Dairying and Fisheries and the National Bank for Agriculture and Rural Development (NABARD) is implementing the DEDS.

The DEDS aims to generate self-employment opportunities in the dairy sector, covering activities such as procurement, enhancement of milk production, transportation, preservation, marketing and processing of milk by providing back-ended capital subsidies for bankable projects. This scheme is open to organised and unorganised sectors. 

Objectives of DEDS

  • To promote establishing modern dairy farms for milk production.
  • To upgrade traditional and quality technology to handle milk commercially.
  • To encourage the development of modern dairy farms and produce pure milk.
  • To encourage heifer calf rearing, thus, conserving good breeding stock.
  • To provide infrastructure and generate self-employment for the unorganised sector.
  • To promote milk products’ processing and milk production for providing quality milk products.
  • To bring structural changes in the unorganised sector to start initial milk processing at the village level.

Eligibility of DEDS

  • The following entities can apply for assistance under the DEDS:
    • Individual entrepreneurs.
    • Farmers.
    • Companies.
    • NGOs.
    • Groups of unorganised sectors.
    • Groups of organised sectors, including milk unions, Self-Help Groups (SHGs), milk federations, cooperative dairy societies, etc.
  • An entity is eligible to avail assistance under all components of the scheme, but it can apply only once for each component. 
  • More than one family member can avail assistance under the scheme, provided they establish separate units with separate infrastructure at various locations. The distance between the two units should be at least 500 metres.

Components and Assistance Provided Under DEDS

The components and pattern of assistance provided under the DEDS scheme are as follows:

ComponentUnit CostPattern of Assistance
Establishment of small dairy units with cross-breed or indigenous cows like Red Sindhi, Sahiwal, Rathi, Gir, etc., or graded buffaloes up to 10 animals.Rs.7 lakh for 10 animal units (Minimum unit size is 2 animals with a maximum of 10 animals)25% of the project cost (33.33% for ST/SC farmers), as back-ended capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 10 animals subject to a ceiling of Rs.17,500 (Rs.23,300  for ST/SC farmers) or actual, whichever is lower.
Rearing of heifer calves (indigenous breeds of cattle, cross-bred and graded buffaloes up to 20 calves)Rs.9.7 lakh for 20 calf units (Maximum of 20 calves)25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 20 calf units subject to a ceiling of Rs.12,100 per calf (Rs.16,200 for ST/SC farmers) or actual, whichever is lower.
Vermicompost with a milch animal unit (to be considered with small dairy farm/milch animals and not separately)Rs.25,20025% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.6,300 (Rs.8,400 for ST/SC farmers) or actual, whichever is lower.
Purchase of milking machines, milkotesters or bulk milk cooling units up to 5,000 litre capacityRs.20 lakh25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.5 lakh (Rs.6.67 lakh for ST/SC farmers) or actual, whichever is lower.
Purchase of dairy processing equipment to manufacture indigenous milk productsRs.13.2 lakh25% of the project cost (36.33%for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.3.3 lakh (Rs.4.4 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of cold chain and dairy product transportation facilities Rs.26.5 lakh25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.6.625 lakh (Rs.8.830 lakh for ST/SC farmers) or actual, whichever is lower.
Cold storage facilities for milk and milk productsRs.33 lakh25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.8.25 lakh (Rs.11 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of private veterinary clinicsRs.2.6 lakh for a mobile clinic and Rs.2 lakh for a stationary clinic.25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.65,000 and Rs.50,000 (Rs.86,600 and Rs 66,600 for ST/SC farmers), respectively, for mobile clinics and stationary clinics or actual, whichever is lower.
Dairy marketing outlet or dairy parlourRs.3 lakh25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.75,000 (Rs.1 lakh for ST/SC farmers) or actual, whichever is lower.

Funding Pattern Under DEDS

The funding patterns are as follows:

ContributionPercentage of contribution
Entrepreneur contribution (margin)Minimum 10% of the outlay
Back ended capital subsidy25% of the project cost for the general category and 33.33% for ST/SC farmers
Bank loanBalance portion of the total project cost

Interest Rate Under DEDS

The DEDS offers loans at interest rates according to the RBI guidelines. The banks can charge interest rates on the loan amounts till the beneficiaries receive subsidies. The interest rate is applicable from the receipt of the subsidy on the bank loan portion (subsidy subtracted from the bank loan).

The repayment tenure of loans varies between 3-7 years. The grace period to repay the loan is 3-6 months for dairy farms. Beneficiaries with the ownership of calf-rearing units are eligible for up to 3 years of a grace period. However, it entirely depends on the bank’s decision.

Implementation of DEDS

The National Bank for Agriculture and Rural Development (NABARD) is the nodal agency for implementing this scheme. The following financial institutions qualify for refinancing under the DEDS scheme:

  • Commercial banks.
  • State cooperative banks.
  • Regional rural banks.
  • State cooperative agriculture and rural development banks. 
  • Such other institutions are eligible for refinancing from NABARD.

The entrepreneurs can apply to the bank, where they have an account for sanctioning the project amount. The bank will appraise the project according to their norms and, if eligible, will sanction the total outlay as the bank loan, excluding the margin. The loan amount is disbursed in instalments depending on the unit’s progress. 

The bank will apply to the NABARD concerned regional office for the release and sanction of the subsidy after the disbursement of the first instalment of the loan. However, the government discontinued the DEDS from the financial year 2020-21.

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