Dairy Entrepreneurship Development Scheme (DEDS) – Features, Objectives

February 04, 2021

9 min read

Dairy Entrepreneurship Development Scheme

DEDS scheme

The government of India, intending to establish small dairy farms and related components in the sector, started Venture Capital Fund Scheme in December 2004. The scheme was launched with ₹25 crore corpus. Since the financial year 2008-09, the programme was fragmented in two separate parts:

Dairy Venture Capital Fund
Poultry Venture Capital Fund

From June 2010 onwards, the Dairy Venture Capital Fund got upgraded with more components added to the scheme and rechristened as Dairy Entrepreneurship Development Scheme (DEDS). Now, the scheme became more effective due to broader coverage, increased component-wise assistance and bringing more components underneath, for support.

Key Features of DEDS

The new DEDS scheme has multiple objectives; the primary aim is to help generate employment opportunities and upgradation of dairy industry infrastructure.
Modern techniques and equipment meant to improve milk production, collection, processing, and improving the quality of milk. Dairy farms should be upgraded with the latest technology tools are the other objectives.
The government initiative is also directed to increase the rearing of the best quality heifer calf with the intention to conserve better breeds for further development of dairy farms in the future.
To introduce structural changes at the village level itself that will allow processing of milk at the initial stage.
To offer better value of milk and milk products.

Objectives of the scheme

The main objectives of the scheme are as follows;

Generating self-employment opportunities and to requisite infrastructure in the dairy sector.
To set up modern dairy farms required for clean milk production.
To encourage rearing of the heifer calf, meant to conserve and develop good breeding stock.
To promote structural changes in the unorganized sector. The idea is to initiate milk processing at the village level itself.
To upgrade traditional technology that will ensure the handling of milk on a commercial scale.
To give value addition to milk utilizing processing and producing milk products.

Assistance pattern

Entrepreneur contribution for loans above ₹1.6 lakh is – 10% of the project (Minimum)
Capital Subsidy – 25% of the total project cost for General category of farmers

– 33.33% of the total project cost for SC/ST category of farmers

Bank loan – Rest of the balance amount of the project cost.

The interest rate on the bank loan is levied according to RBI guidelines. The repayment tenure is generally between 3-7 years; however, it is also dependant on the cash flow generated and the type of activity.

Implementing agencies

National Bank for Agriculture & Rural Development (NABARD) is the nodal agency to implement the DEDS Scheme throughout the country. Regional Rural and Urban Banks, Cooperative Banks, Commercial Banks, State Cooperative Agriculture and Rural Development Bank and similar financial institutions that are eligible for NABARD refinance facility are responsible for the implementation of the scheme.

Beneficiaries of DEDS Scheme

Eligible Farmers
Individual entrepreneurs
Unorganized and organized groups in the sector
Self-Help Groups (SHGs)
Dairy Cooperative Societies
Milk Unions and Milk Federation
Panchayat Raj institutions etc.

Criteria for availing loans

An eligible applicant can only apply once for each component of the scheme to receive financial assistance.
More than one family member can receive financial assistance under the scheme, but with the condition that they should have separate units. Moreover, both these farms should be at different locations and are separated by a distance of at least 500m.
Priority is to be given to projects that are being implemented under the cluster mode. It includes projects established by dairy farmers, women Self-Help groups, cooperatives, and producer companies.
Priority is to be given to SC/ST, women, small and marginal farmers, BPL farmers, landless farmers and farmers in the drought-hit areas.

Financial assistance provided under the scheme

S.NO	Component	Unit Cost	Pattern of Assistance
1	To establish small dairy units having crossbred cows/ indigenous identified milch cows such as Red Sindhi, Gir, Rathi etc. or graded buffaloesup–to ten animals.	₹ 7.00 lakh –10 animal unit. The minimum unit size – 2 animals while the upper limit is – 10 animals.	25% of the total project cost (33.33% – SC / ST farmers), is the back–ended capital subsidy. The subsidy will be restricted on a pro–rata basis with a maximum unit size of 10 animals, which is subject to a ceiling of ₹17,500 per animal, (₹ 23,300 – SC/ST farmers) or the actual price whichever is lower. Beneficiaries can purchase animals of higher costs, but the subsidy shall be restricted on the above ceiling.
2	Rearing of heifer calves, indigenous descript milch breeds, crossbred, andgraded buffaloes — up–to 20 calves.	₹9.70 lakh for a unit of 20 — the upper limit being 20 calves	25% of the total project cost (while 33.33 % – SC/ST farmers) is the back–ended capital subsidy. A subsidy is restricted on a pro-rata basis with a maximum of 20 calf unit. It is subjected to a ceiling of ₹12,100/- per calf (₹16,200– SC/ST farmers) or actual cost whichever is lower
3	Vermicompost along with the milch animal unit	Rs 25,200/-	25% of the total project cost (33.33 % – SC / ST farmers) is the back–ended capital subsidy. It is subjected to a ceiling of ₹ 6,300 (₹ 8400/- SC/ST farmers) or the actual cost whichever is lower.
4	Purchase of different milk machines(up–to 5000 lit capacity)	₹ 20 lakh	25% of the total project cost (33.33 % – SC / ST farmers) is the back–ended capital subsidy. It is subjected to a ceiling of ₹ 5.0 lakh (₹ 6.67 lakh – SC/ ST farmers) or the actual cost whichever is lower
5	Purchase of dairy processing equipment to manufacture indigenous milk products	₹ 13.20 lakh	25% of the total project cost (36.33 %– SC/ST farmers) is the back–ended capital subsidy. It is subjected to a ceiling of ₹3.30 lakh (₹ 4.40 lakh – SC/ST farmers) or the actual cost whichever is lower
6	To establish dairy product transportation facility and cold chain	₹ 26.50 lakh	25% of the total project cost (33.33 % – SC / ST farmers) is the back–ended capital Subsidy. It is subjected to a ceiling of ₹6.625 lakh (₹ 8.830 lakh – SC/ST farmers) or the actual cost whichever is lower
7	Cold storage facility for milk & milk products	₹ 33 lakh	25% of the total project cost (33.33 % – SC / ST farmers) is the back–ended capital subsidy. It is subjected to a ceiling of ₹8.25 lakh (₹11.0 lakh – SC/ST farmers) or the actual cost whichever is lower
8	To establish private veterinary clinics.	₹2.60 lakh – mobile clinic and ₹ 2.0 lakh –stationary clinic	25% of the total project cost (33.33% – SC / ST farmers) is the back–ended capital subsidy. It is subjected to a ceiling of ₹65,000/- and ₹ 50,000/- (₹ 86,600/- and ₹ 66,600/- – SC/ST farmers) or the actual cost whichever is lower
9	Dairy marketing outlet or Dairy parlour	₹ 3.0 lakh/-	25% of the total project cost (33.33% – SC / ST farmers) is the back ended capital subsidy. It is subjected to a ceiling of ₹ 75,000/-(₹ 1,00,000- – SC/ST farmers) or the actual cost whichever is lower.

Government of India to double farmers income has launched various schemes. DEDS under the Department of Animal Husbandry, Dairy and fisheries is one such initiative to provide an alternative source of income in rural areas. This scheme will help in generating employment opportunities by increasing milk production, procurement, processing and marketing of milk and milk-related products.

DEDS scheme FAQs:

1. Is the MUDRA loan covers the DEDS scheme?

MUDRA loan is made available for DEDS under which an entrepreneur can avail three types of loans depending upon the need without collateral; these are: SHISHU loan for an amount up to Rs 50,000 KISHORE loan for an amount up to Rs 5 lakh TARUN loan for an amount up to Rs 10 lakh

2. Who is eligible for NABARD dairy farm subsidy?

The eligible candidates for availing subsidy are: • Farmers • Individual entrepreneurs • NGOs • Companies involved in dairy farming • Different organized and unorganized groups involved in dairy farming. • Self help groups, milk federations, milk unions, dairy cooperatives etc.

3. What is the social objective of the DEDS scheme?

DEDS scheme is an aspirational scheme launched by the government to support dairy farming. The idea being an increase in milk production in the country along with increasing farmer’s income. It is also conceived to generate employment opportunities and lead to the general development of the country.

4. What are the benefits of the scheme for the dairy sector?

The main benefits of the scheme are:  To set up modern dairy farms for clean milk production and distribution  To conserve good quality breeding stock  To financially support the unorganized sector and bring structural changes at the village level.

5. What are the documents required to avail the loan?

1) For loan above ₹1 lakh, collateral is required. 2) Caste certificate 3) Identity card 4) Copy of the business plan

6. What are the other essential things to remember before applying for a loan?

The farmer has to put in a minimum of 10% of the project cost. Moreover, if the project is not executed within nine months of approval, then the farmer will not get the sanctioned loan subsidy.

7. Elaborate on linkages with credit

Financial assistance under the DEDS scheme is credit linked and depends on the approval of the project by the financial institutions. List of financial institutions eligible to sanction finance are:  Commercial Banks  Regional Rural Banks  State Cooperative Banks  State Cooperative Agriculture & Rural Development Banks  Any other financial institution approved by NABARD

8. What is the role of NABARD?

NABARD acts as a refinance agency that provides credit to all the eligible financial institutions. Quantum and interest rates on refinancing are also reviewed and decided by NABARD.

9. What are the activities covered under the DEDS scheme?

The activities covered under the DEDS scheme are:  Establishment of dairy units  Rearing of heifer calves  Vermicompost and milking machines  Milk processing machines  Cold storage facilities and transportation  Private veterinary clinics  Marketing of milk or milk products

10. What is the procedure to avail of subsidy from NABARD?

An animal owner should visit the eligible bank or animal care center to get the subsidy form. After that, a veterinarian will visit the bank with filled form and necessary documents for submission. Once verified, the subsidy amount is sanctioned.