Dairy infrastructure fund for private sector

Union Minister Giriraj Singh launched the implementation guidelines for the Rs 15,000 crore Animal Husbandry Infrastructure Development Fund (AHIDF). This fund seeks to boost processing capacities in dairy and meat segments. The Union Cabinet approved this fund on June 24 under the Aatmanirbhar Bharat Abhiyaan stimulus package.

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It aims to incentivise investment by individual entrepreneurs, private companies, MSMEs, Farmers Producers Organisation (FPOs) and Section 8 companies to establish dairy and meat processing and value addition infrastructure as well as animal feed plants, an official statement said.

As per the guidelines, the project under AHIDF would be eligible for loan up to 90 per cent of estimated cost from scheduled banks. The Centre will provide 3 per cent interest subsidy on these loans.

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The Minister said the government is focusing on breed improvement to increase milk production as well as working towards enhancing processing capacities, the statement said.

India is producing 188 million tonne milk currently. Milk production in India may reach 330 MT by 2024. The government is trying to increase the processing of milk from 20-25 % currently to 40%%.

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An exclusive fund to support private sector in milk processing

He said the Dairy Processing Infrastructure Development Fund (DIDF) is for the cooperative sector . AHIDF is first such scheme for the private sector.

” This will also increase export of dairy products which is presently negligible. India needs to go up to the standards of countries like New Zealand in the dairy sector,” Singh said. The fund will help in icreased milk production and benefit millions of farmers in the country.

He expressed satisfaction that during COVID-19 lockdown, dairy farmers could maintain steady supply of milk to the consumers.

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AHIDF will mainly support MSMEs and private companies. The private sector also need promotion and incentivisation for their involvement in processing and value addition infrastructure.

The eligible beneficiaries under the scheme would be FPOs, MSMEs, Section 8 companies, private companies and individual entrepreneurs with minimum 10 per cent margin money contribution by them. The balance 90 per cent would be the loan component to be made available by scheduled banks.

3% Interest subvention

The Centre will provide 3 per cent interest subvention to eligible beneficiaries. There will be 2-year moratorium for principal loan amount and 6-year repayment period thereafter.

The central government would also set up Credit Guarantee Fund of Rs 750 crore. NABARD will be managing this fund. All sanctioned projects which are covered under MSME defined ceilings would get credit guarantee.

The guarantee coverage would be up to 25 per cent of credit facility of borrower. The beneficiaries intending to invest for establishing dairy and meat processing and value addition infrastructure or strengthening of the existing infrastructure can apply for loan in the scheduled bank through “Udyami Mitra” portal of SIDBI, it added.

The Rs 15,000 crore AHIDF and the interest subvention scheme for private investors will ensure availability of capital to meet upfront investment required for these projects and also help enhance overall returns/ pay back for investors, it said.

Almost 50-60 per cent of final value of dairy output in India flows back to farmers. Therefore growth in this sector can have significant direct impact on the farmer”s income.

Nature of investments

The investment incentivisation in AHIDF would only leverage seven times private investment. It would also motivate farmers to invest more on inputs thereby driving higher productivity leading to increase in farmers” incomes.

AHIDF would also help in direct and indirect livelihood creation for 35 lakh persons, the statement said.The fund will promote investments in building processing capacities for value added milk products. Ice cream units, Cheese plants, Flavored milk, Milk powder and whey proteins are some of these value added products.

Minister of State for Fisheries, Animal Husbandry and Dairying Pratap Chandra Sarangi said the government has decided to vaccinate 53.5 crore animals. Four crores animals have been vaccinated till now. PTI MJH ANU ANU