Government to merge two large dairy schemes to aid private sector

April 17, 2023

The government has decided to merge two dairy-sector schemes – Animal Husbandry Infrastructure Development Fund (AHIDF) and Dairy Processing and Infrastructure Development Fund (DIDF), with a view to making available the funds from the balance outlay to the private sector dairy and meat processing units.

The AHIDF was launched in 2000 with an outlay of Rs 15,000 crore while DIDF, which was implemented for five years till the last fiscal, saw under-utilisation of the Rs 10,000 crore outlay.

“With more than half of the allotted fund under the two schemes yet to be disbursed, we will merge the schemes subject to the composite outlay cap of Rs 25,000 crore. There won’t be any additional requirement of funds,” an official with the department of animal husbandry and dairying, told FE. He added the merger would bring in synergy in implementation.

Through the merger of AHIDF and DIDF, the government is aiming to encourage private sector participation in creating dairy and meat processing infrastructure. Officials say that despite India being the world’s biggest milk producer and one of the largest poultry meat producers, the unorganised sector still holds a major share in the livestock sector.

As per official estimates, only 20-25% milk produced in the country is processed, the aim is to increase milk processing to 40% in the next couple of years.

Both the schemes are aimed at creating dairy and meat processing infrastructure by cooperatives as well as private sector by providing interest subvention and longer repayment period.

Part of Prime Minister’s Atmanirbhar Bharat Abhiyan stimulus package, AHIDF focuses on increasing milk and meat processing infrastructure along with cattle feed manufacturing and providing access for unorganised rural milk and meat producers to organised markets.

According to official data, out of the 271 projects worth Rs 6,819 crore sanctioned under AHIDF so far, Rs 4,534 crore worth of loans have been approved by banks. Disbursements so far have been only Rs 675 crore under the fund.

Under AHIDF, private entities, farmer producer organisations (FPOs), entrepreneurs and micro and small enterprises get loans from banks with an interest subvention of 3%, credit guarantees and a repayment period of 10 years including two years of moratorium.

To create additional dairy processing infrastructure by cooperatives, DIDF with a total project outlay of Rs 10,005 crore with a loan component of Rs 8,004 crore from the National Bank for Agriculture and Rural Development (NABARD), National Dairy Development Board (NDDB) and National Cooperative Development Corporation (NCDC) was implemented during 2018-19 to 2022-23.

According to data, 36 projects across 11 states with a total project outlay of Rs 5,429 crore has been approved under DIDF.

So far loans of Rs 3,483 crore have been sanctioned under the fund to dairy cooperatives, multi state dairy cooperatives, milk producer companies and subsidiaries of the NDDB while Rs 1,371 crore have been disbursed by banks as loans.

A major share of projects have been sanctioned in Karnataka (9), Telangana (3), Gujarat (3) and Tamil Nadu (3) for milk processing. Under DIDF, the Centre had provided interest subvention of 2.5% with a maximum repayment period of 10 years, including two years moratorium period

According to the Economic Survey (2022-23), the livestock sector grew at a CAGR of 7.9% during 2014-15 to 2020- 21 and its contribution to total agriculture GVA has increased from 24.3% to 30.1% during the same period.

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