India, being an agrarian economy, has always relied heavily on agriculture and allied activities. Among these, dairy farming holds a critical role in providing livelihoods to millions, especially in rural areas. To promote and support dairy entrepreneurs, both the Central and State Governments have launched Dairy Farming Loan Schemes with subsidies and low-interest loans.
Whether you’re an existing dairy farmer looking to expand your operations or a new entrepreneur planning to start, these loan schemes can make your journey easier by offering financial support, infrastructure aid, and technical guidance.
This blog explores the Dairy Farming Loan Scheme 2025, including eligibility, interest rates, subsidies, and how to apply.
🐄 What is the Dairy Farming Loan Scheme?
The Dairy Farming Loan Scheme is a government-backed initiative that provides financial assistance to individuals, farmers, SHGs, FPOs, and entrepreneurs interested in setting up or expanding dairy businesses.
The primary objectives are:
- Increase milk production
- Promote self-employment in rural areas
- Improve dairy infrastructure
- Generate sustainable income for small and marginal farmers
This scheme is usually implemented through NABARD, co-operative banks, commercial banks, and regional rural banks with the support of the Department of Animal Husbandry & Dairying (DAHD).
💰 Key Features of the Dairy Farming Loan Scheme 2025
| Particulars | Details |
|---|---|
| Loan Amount | ₹1 lakh to ₹50 lakh (based on project) |
| Interest Rate | 8% to 11% per annum (may vary by bank) |
| Repayment Period | Up to 5–7 years |
| Subsidy | 25% to 33.33% (based on category) |
| Collateral | Required for large loans; may be waived for small loans under ₹1.6 lakh |
| Loan Coverage | Cattle purchase, shed construction, fodder equipment, cooling units |
✅ Eligibility Criteria
To apply for a dairy loan under the 2025 scheme, the applicant must:
- Be an Indian citizen
- Be between 18 to 65 years of age
- Have basic knowledge of animal husbandry/dairy
- Have land or access to leased land for dairy operations
- Maintain a good credit score (in most cases)
- Belong to any of these categories:
- Individual farmer
- Self-Help Group (SHG)
- Dairy cooperative society
- Farmer Producer Organization (FPO)
- Tribal and Scheduled Caste entrepreneurs
Women, SC/ST, and weaker section applicants may receive higher subsidies and priority processing.
🧾 Documents Required
When applying for the Dairy Farming Loan, you will generally need the following documents:
- Aadhaar Card & PAN Card
- Bank passbook
- Photograph
- Land documents or lease proof
- Business/project plan
- Caste certificate (for SC/ST applicants)
- Quotation or invoice for equipment/animals
- Proof of experience or training in dairy farming (optional but helpful)
📋 Popular Government Schemes Supporting Dairy Loans
Several schemes are currently aligned with the Dairy Farming Loan initiative. The most notable are:
1. NABARD Dairy Entrepreneurship Development Scheme (DEDS)
- Offers back-ended capital subsidy of up to 25%–33.33%
- Supports 2–10 milch animals, chilling units, milking machines, etc.
- Available through NABARD-approved banks
2. Animal Husbandry Infrastructure Development Fund (AHIDF)
- Large-scale project loans for dairy infrastructure, chilling, and processing units
- Subsidized interest rate and credit guarantee available
- Applicable to companies, MSMEs, and cooperatives
3. PM Mudra Yojana
- For small-scale dairy setups without collateral
- Loans up to ₹10 lakh under Shishu, Kishor, and Tarun categories
4. Kisan Credit Card (KCC) – Dairy Sector
- Now extended to dairy and animal husbandry farmers
- Offers short-term credit for feed, medicines, and minor capital expenses
🏭 What Expenses Are Covered?
Dairy loans generally cover a wide range of components including:
- Purchase of cows or buffaloes
- Construction of sheds
- Purchase of fodder cutter, milking machine
- Cold storage or chilling units
- Transport vehicles
- Fodder cultivation expenses
- Veterinary care and medicines
🧮 Example: Dairy Loan Calculation
Let’s say you want to start a small dairy farm with 5 cows. Here’s an estimated breakdown:
| Item | Cost (in ₹) |
|---|---|
| 5 Cows (₹60,000 each) | ₹3,00,000 |
| Shed Construction | ₹1,00,000 |
| Fodder Storage | ₹50,000 |
| Milking Machine | ₹40,000 |
| Total Project Cost | ₹4,90,000 |
If you’re eligible for 25% subsidy, you receive ₹1,22,500 as subsidy.
You may need to invest ₹50,000 to ₹1,00,000 from your own funds, while the remaining will be financed by the loan.
📝 How to Apply for Dairy Farming Loan in 2025
Step 1: Prepare Your Project Plan
- Include number of animals, costs, expected income, break-even point
- Clearly mention infrastructure and equipment needed
Step 2: Choose the Right Bank
- Visit any nationalized bank, rural bank, or co-operative bank
- Confirm if they support NABARD-backed dairy loans
Step 3: Fill the Application Form
- Submit the form along with all required documents
- Mention the type of loan: animal purchase, shed, processing, etc.
Step 4: Verification & Sanction
- The bank will verify your documents and may inspect your land/project site
- Once approved, the loan amount is disbursed to your bank account
Step 5: Subsidy Processing
- After successful verification, the subsidy is released to the lending bank and adjusted against your loan
🧠 Tips for First-Time Dairy Entrepreneurs
- Start small and gradually scale operations
- Take basic dairy training (many are available through Krishi Vigyan Kendras)
- Maintain proper animal health records
- Use insurance for livestock (some banks mandate it)
- Keep your bank account active and KYC updated
📌 Conclusion
The Dairy Farming Loan Scheme 2025 is a golden opportunity for those looking to make a mark in animal husbandry and rural enterprise. With low-interest rates, government subsidies, and rising demand for milk and dairy products, the sector is both financially rewarding and socially impactful.
If you have the passion for animal care and the vision to build a small rural enterprise, a dairy farming loan can be your stepping stone to success.
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