India is the largest producer and consumer of milk and milk products in the world, thanks to the Operation Flood Program launched by India in the 1970s. In a recent study done by IMARC Group on the effect of COVID-19 on the dairy industry, the dairy market in India reached a value of INR 10,540 Billion in 2019. For all this money, more than 50% of the dairy sector is unorganized and is controlled by farmers or small family businesses.
While large co-operative operations like Amul and Mother Dairy have been operational for decades, the recent past has seen a trend of new-age entrepreneurs entering the dairy market with innovative methods to improve the yield from the business without any compromise on the quality of the product. These new-age farms built on the concepts of circular economy try to utilize every part of the business for reuse and monetization.
Even for the Government, the wellbeing of the dairy sector is of prime importance. To maintain competition, improve the production, and for the sustained benefit of farmers, the Government of India had announced the creation of Dairy Processing and Infrastructure Development Fund (DIDF) under NABARD with a total corpus of INR 8000 crore over 3 years (i.e. 2017-18 to 2019-20), in the Union Budget of 2017-18.
Officially, these are the prime objectives of the scheme
- To modernize the milk processing plants and machinery and to create additional infrastructure for processing more milk.
- To create additional milk processing capacity for increased value addition by producing more dairy products.
- To bring efficiency in dairy processing plants/producer owned and controlled dairy institutions, thereby enabling optimum value of milk to milk producer farmers and supply of quality milk to consumers.
- To help the producer owned and controlled institutions to increase their share of milk, thereby providing greater opportunities of ownership, management and market access to rural milk producers in the organized milk market.
- To help the producer owned and controlled institutions to consolidate their position as dominant player in the organised liquid milk market and to make increased price realisation to milk producers.
Since the overall supply chain of milk or milk-related operation is large, the components of the scheme are
- Modernization & creation of new milk processing facilities
- Manufacturing facilities for Value added Products
- Milk Chilling infrastructure
- Setting up electronic milk testing equipment
- Project Management and Learning
Any other activity related to the dairy sector targeted to contribute to the objectives of DIDF and decided by Government of India in consultation with the stakeholders.
The eligible set of borrowers from this scheme are
- Cooperative Milk Unions
- State Cooperative Dairy Federations
- Multi-State Milk Cooperatives
- Milk Producer Companies
- NDDB Subsidiaries
Once the business has identified the scope of their enterprise, they can avail of a loan from the Government under the DIDF scheme. There are various technical and financial criteria requirements to secure the loan, primarily concerning the project clearances, long-term feasibility, and an inspiring financial plan and record. Once the criteria are met, the loan is disbursed on an 80-20 basis where the business owners are to contribute 20% towards the project.
This is an amazing opportunity for aspirants who can take up the local supply chain through active partnerships with other milk farmers and distributors to create a company that can actively meet the needs of the consumer as well as improves the overall profitability of the sector through innovative design.
For more information about each of these, you could visit the government website at https://www.nddb.coop/didf
What do you think? If you have other interesting ideas that you wish to share, please add them to the comments section.