Budget 2026 : Livestock Farmer Producers Organisations (LFPOs)

The Union Budget 2026 has accorded significant priority to the Animal Husbandry and Dairying sector, reaffirming the Government’s commitment to strengthening rural livelihoods, enhancing farmers’ income, and ensuring sustainable growth of the livestock economy. Key provisions in the Budget focus on improving productivity, animal health, and infrastructure across the livestock value chain. Enhanced support has been extended for breed improvement programmes, expansion of veterinary services, and disease prevention initiatives to safeguard farmers’ assets and ensure quality livestock output.

The Budget also emphasizes strengthening the dairy sector through improved milk collection, processing, and value-addition infrastructure. Special focus has been placed on supporting cooperatives and Livestock farmer Producer organization (LFPOs) engaged in dairying and allied activities. In line with the vision of “Atmanirbhar Bharat”, the Budget promotes innovation, use of technology, and private sector participation in animal husbandry. Initiatives aimed at fodder development, feed security, and climate-resilient livestock practices will help ensure long-term sustainability of the sector.

The increased thrust on Animal Husbandry and Dairying in Budget 2026 is expected to generate employment, enhance nutritional security, and contribute significantly to rural economic growth. The Department remains committed to effective implementation of these initiatives in collaboration with States and stakeholders.

Key Budget Announcements:

To increase the availability of Veterinary professionals by raising their number to over 20,000, it has been proposed to launch a credit-linked capital subsidy assistance scheme for the establishment of private-sector veterinary and para-veterinary colleges, animal hospitals, diagnostic laboratories and breeding facilities. Collaboration between Indian and foreign institutions will also be facilitated.

1. Credit-linked Subsidy Programme for Animal Husbandry Entrepreneurship:

The Union Budget 2026-27 proposes a credit-linked subsidy scheme aimed at boosting entrepreneurship and modernization in animal husbandry — benefiting livestock, dairy, and poultry enterprises. This measure is intended to help farmers adopt modern equipment, improve productivity, and create value chains across rural sectors.

2. Broader Rural & Allied Agriculture Focus:

Modernization and scaling up of livestock, dairy, and poultry value chains, enhancing productivity and rural employment. AI-driven agricultural tools, such as the “Bharat Vistar” platform, aimed at improving decision-making for farmers, including dairy and livestock producers. Emphasis on credit and entrepreneurship support for dairy and livestock farmers as part of rural income diversification efforts.

3. Deduction Extended for Primary Cooperatives:

Supply of cattle feed and cotton seed by primary cooperative societies will now be eligible for tax deduction - ensuring better support and lower costs for dairy farmers and livestock rearers.

4. Relief on Inter-Cooperative Dividends:

Dividend income earned from one cooperative by another will be allowed as a deduction under the New Tax Regime, strengthening financial flows within dairy and livestock cooperatives. Exemption for a period of 3 years allowed to dividend income received by a notified national cooperative federation, on their investments made in companies up to 31.1.2026, for dividends further distributed to its member co-operatives.

These measures will enhance financial strength of cooperatives, support dairy farmers and boost livestock-based rural livelihoods.

5. Other Initiatives to boost Livestock Sector :

When calculating the Central Excise Duty payable on Biogas-Blended CNG, the entire value of the biogas will be excluded. This will promote sustainable development in the dairy sector and encourage the setting up of new biogas plants in the country.

Source : Dairynews7x7 Feb 2nd 2026 PIB