Centre approves Rs 10,881 cr dairy processing and infrastructure development fund

The Union Government on Tuesday approved a Dairy Processing and Infrastructure Development Fund (DIDF) with an outlay of Rs 10,881 crore, during the period from 2017-18 to 2028-29 to boost dairy sector.

Prime Minister Narendra Modi chaired the Cabinet Committee on Economic Affairs.

The new fund to be managed by the National Dairy Development Board (NDDB) and the National Dairy Development Cooperation (NCDC) will be used to provide loan for building an efficient milk procurement system and other processing infrastructure.

Out of Rs 10,881 crore of financial outlay for project components of DIDF - Rs 8,004 crore shall be loan from NABARD to National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC), Rs 2,001 crore shall be end borrowers contribution, Rs 12 crore would be NDDB/NCDC's share and Rs 864 crore shall be contributed by DADF towards interest subvention.

NABARD shall disburse Rs 2,004 cr, Rs 3,006 cr and Rs 2,994 cr during the year 2017-18, 2018-19 and 2019-20 respectively.

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 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.

The end borrowers will get the loan at the rate of 6.5 percent per annum.

The period of repayment will be 10 years with initial two years moratorium.

With this investment, 95,00,000 farmers in about 50,000 villages would be benefited.

With the increase in milk procurement operations of the Milk Cooperatives, there would be generation of additional manpower employment for supervision of increased milk procurement operations, transportation of milk from villages to processing units, and increased input delivery services like Artificial Insemination (AI) services, Veterinary Services, etc.