The secret of Life is this : The cow does not give milk

Last fortnight the whole nation celebrated Holi. The colours are back in life. The corona cases in some parts of the country have again surged to match the last year growth rate. By the grace of god Corona is not registering its presence in the states undergoing elections. Probably corona also believes in the power of democracy.

The government is fulfilling all their promises made in the Atma Nirbhar package for the dairy sector. Last week Production linked Incentive scheme amounting Rs 10800 Crores also got cabinet nod for food processing sector. Buffalo Mozzarella cheese and desi ghee are the two major dairy products which have been considered under this scheme.

Animal husbandry infrastructure development fund

The Rs 15000 Crores, Animal husbandry infrastructure development fund has already cleared Rs 870 crores of projects in this year. The salient features of this scheme as against other schemes implemented earlier are as follows :

1. This scheme covers MSME in private sector, FPOs and cooperatives through FPOs.
2. It is available for new projects as well as for strengthening and expansion of existing dairy projects also.
3. This covers products like Ice cream, Cheese, UHT milk, Milk powder, Whey powder, flavoured milk. It covers other Value added dairy products also.
4. It covers all kinds of feed and fodder making set ups like Animal feed plants, Total mixed ration block units . Mineral mixture. By pass protein, Enriched silage making units with feed testing laboratories are also covered under this scheme.
5. Now even breeding farms can be established under this scheme making a 360 degree coverage of the sector.

The scheme offers a 3% interest subvention on the complete project cost . Land cost, working capital , old machineries and personal vehicles are not covered under the scheme. The policy makers have capped the lending rates also at 2% above the EBLR or external Bench mark lending rate. Department of animal husbandry will provide credit guaranty to the tune of 25% to all MSME having viable projects for their total credit facility available.

Shifting consumer behaviour

The real time for growth of the dairy sector has arrived. A major shift in consumer behaviour from loose to packed dairy and food products will anchor newer demand points. In dairy sector this new demand could be anywhere from 10-20 million litres per day per year for next 5-7 years. This way the organised dairy sector foot print will increase from 35-40% in 2021 to 60-65 % by 2027-28.

This reminds me of an old story which says that “The secret of Life is this : The cow does not give milk”. You have to milk the cow. There is this generation that thinks that cows give milk. The reality is that one has to get up at 4 AM in the morning, go to the field,walk through the corral full of manure,tie the tail, hobble the legs of the cow, sit on the stool,place the bucket and milk the cow.

Same is true for the industry. The cow ( government schemes) in this case does not give milk. You have to do the hard work to get the milk (benefits like grants, interest subvention, credit guaranty etc). The hard work includes the following actions.

1. Market assessment and future projections of demand for complete dairy product mix
2. Setting target for market share in a plausible manner
3. Drawing out an action plan for modernisation/expansion of your existing set up or a greenfield project.
4. Identification of Location and Land for acquisition
5. Project designing and estimating project cost
6. Aligning the same with the most appropriate scheme
7. Getting all necessary approvals from other departments like Pollution, NGT , Land use , etc.
8. Applying for the scheme at “Udyami Mitra “portal of SIDBI.
9. Choosing a bank of your choice
10. Wait for the appraisal and clearance of the project
11. Begin your journey after getting the approval

Current environment is very conducive for investments in dairy sector. Soon we shall be sharing the details of PLI scheme after getting the guidelines. A few more schemes on dairy entrepreneurship are also on the anvil and will be available soon for dairy start ups also.

A blog by Kuldeep Sharma