Centre announces Rs10,881-cr dairy infrastructure development plan

The centre has approved a Rs10,881-crore outlay for development of dairy processing infrastructure in the country over an 11-year period betwnn 2017-18 and 2028-29.

The Cabinet Committee on Economic Affairs (CCEA)  chaired by Prime Minister Narendra Modi on Tuesday approved a `Dairy Processing & Infrastructure Development Fund' (DIDF) with an outlay of Rs10,881 crore during the period from 2017-18 to 2028-29.

The Union Budget 2017-18 had announced the setting up of a Dairy Processing & Infrastructure Development Fund with a corpus of Rs8,004 crore with the National Bank for Agriculture and Rural Development (Nabard). Subsequently, the Expenditure Finance Committee has given approval for initiation and setting up of Dairy Processing and Infrastructure Development Fund (DIDF) at a total scheme outlay of Rs1,0881 crore.

Out of Rs1,0881 crore of financial outlay for project components of DIDF, Rs8004 crore will come as a loan from Nabard to National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC), Rs2.001 crore will be end-borrowers contribution, Rs12 crore will be NDDB/NCDC's share and Rs864 crore DADF's contribution towards interest subvention.

Nabard will disburse Rs2,004 crore, Rs3,006 crore and Rs2,994 crore during the year 2017-18, 2018-19 and 2019-20, respectively.

The allocation of Rs864 crore for meeting interest subvention will be released to NABARD over a period of 12 years covering the entire loan repayment period from 2017-18 to 2028-29.

The project will focus on building an efficient milk procurement system by setting up of chilling infrastructure and installation of electronic milk adulteration testing equipment, creation/modernisation/expansion of processing infrastructure and manufacturing faculties for value added products for the milk unions/ milk producer companies.

The project will be implemented by the National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC) directly through the end borrowers such as milk unions, state dairy federations, multi-state milk cooperatives, milk producer companies and NDDB subsidiaries meeting the eligibility criteria under the project. An implementation and monitoring cell (IMC) located at NDDB, Anand, will manage the implementation and monitoring of day-to-day project activities.

The end borrowers will get the loan at an annual rate of 6.5 per cent. The period of repayment will be 10 years with initial two years moratorium.

The respective state government will be the guarantor of loan repayment. Also for the project sanctioned if the end user is not able to contribute its share; state government will contribute the same.

The investment is expected to benefit 95,00,000 farmers in about 50,000  villages, generate additional milk processing capacity of 12.6 million litres per day, milk drying capacity of 210 tonnes per day, milk chilling capacity of 14 million litres per day, facilitate installation of 28,000 bulk milk coolers (BMCs) along with electronic milk adulteration testing equipment and create value added products manufacturing capacity of 5.98 million litres per day of milk equivalent.

The department will kick off the project with 39 profit making milk unions in 12 states, while other milk cooperatives, which will become eligible on the basis of their net worth and profit levels, in subsequent years, can apply for loan under DIDF.

The implementation of DIDF scheme will generate direct and indirect employment opportunities for skilled, semi-skilled and unskilled manpower. Direct employment opportunities will be created for about 40,000 people under the scheme through project activities like expansion and modernisation of existing milk processing facilities, setting up of new processing plants, establishment of manufacturing facilities for value added products and setting up of bulk milk coolers (BMCs) at village level.

About 2 lakh indirect employment opportunities will be created on account of expansion of milk and milk product marketing operations from existing Tier I, II & III to Tier IV, V & VI cities/towns etc. This will lead to deployment of more marketing staff by milk cooperatives, appointment of distributors and opening of additional milk booths/retail outlets in urban/rural locations.

The increase in milk procurement operations of the milk cooperatives would generate additional manpower requirement for supervision, transportation of milk from villages to processing units, and increased input delivery services like artificial insemination (AI)  services, veterinary services, etc.