Starting a dairy farm requires significant capital. A 10-cow setup can easily cost upwards of ₹10 Lakhs. If you are searching for a loan for dairy farm or wondering about a cow farming loan, you have likely come across the term NABARD.
However, there is massive confusion among farmers. People often ask, "Does NABARD give loans directly to farmers?" The short answer is No. In this comprehensive guide, we will decode exactly how the NABARD subsidy for dairy farming works, who is eligible, and how to apply without getting rejected by banks.
Table of Contents
1. What is NABARD? (Busting the Myth)
First, let's clear the air. What is the full form of NABARD? It stands for the National Bank for Agriculture and Rural Development.
Crucial Fact: You cannot walk into a NABARD office and ask for a loan. NABARD is a refinancing agency, not a retail bank. They provide funds and subsidy schemes to commercial banks (like SBI, HDFC), Regional Rural Banks (RRBs), and Cooperative Banks. You must apply for your nabard dairy loan through your local bank, which will then process the subsidy through NABARD.
2. The DEDS Subsidy: How Much Do You Actually Get?
The primary scheme supporting dairy farmers is the Dairy Entrepreneurship Development Scheme (DEDS). The government provides a "back-ended capital subsidy" to promote the establishment of small dairy farms.
| Category of Applicant | Subsidy Percentage | Maximum Subsidy Amount (For 10 Cows) |
|---|---|---|
| General Category | 25% of the project cost | Up to ₹1.75 Lakhs |
| SC / ST Farmers | 33.33% of the project cost | Up to ₹2.33 Lakhs |
*Note: This is a back-ended subsidy. The bank grants the full loan, and NABARD releases the subsidy amount to the bank to hold in a reserve account. Once you repay the non-subsidy portion of the loan successfully, the subsidy is adjusted against the remaining balance.
3. Plan Your Cash Flow: The Farm EMI Calculator
Taking a dairy farming loan is easy; repaying it during dry periods is the hard part. Before applying, you must calculate exactly how much money will leave your bank account every month.
Dairy Farm Loan EMI Calculator
Don't rely on bank executives. Use our precise EMI Calculator to find your monthly repayment amount based on your loan principal, interest rate, and tenure.
4. Eligibility & Step-by-Step Application Process
Who is eligible for a NABARD scheme? Almost anyone with intent and land. Farmers, individual entrepreneurs, NGOs, companies, and Self-Help Groups (SHGs) can apply.
The Step-by-Step Process:
- Create a Project Report: You need a detailed business plan showing the cost of cows, shed construction, feed, and projected milk sales.
- Approach a Bank: Submit your report to a commercial, cooperative, or rural bank. The bank will evaluate your credit history and farm viability.
- Bank Sanctions Loan: The bank approves the loan and releases the first installment to you.
- Subsidy Application: The bank (not you) applies to NABARD for the subsidy under the DEDS scheme.
- NABARD Releases Funds: NABARD verifies the claim and sends the subsidy amount to the bank to hold in a "Subsidy Reserve Fund Account" until your loan nears completion.
5. Will Your Farm Survive the Loan?
Securing the loan is only step one. A common reason dairy farms fail is that farmers miscalculate the daily operational expenses (OpEx) against their new monthly EMIs.
Do you know your exact profit margin?
Before applying for a loan, read our complete financial breakdown and P&L statement for a 10-cow dairy farm in India.
6. Frequently Asked Questions (FAQ)
Does NABARD give loans directly to farmers?
No. NABARD does not lend money directly to individual farmers. It acts as a refinancing agency. You must apply for a dairy farm loan through commercial banks, Regional Rural Banks (RRBs), or cooperative banks, which then claim the subsidy from NABARD.
Is NABARD subsidy available for dairy farming?
Yes, under the Dairy Entrepreneurship Development Scheme (DEDS), NABARD provides a back-ended capital subsidy of 25% for general category farmers and 33.33% for SC/ST farmers to start a dairy farm.
What is the full form of NABARD?
The full form of NABARD is the National Bank for Agriculture and Rural Development. It is India's apex regulatory body for overall regulation of regional rural banks and apex cooperative banks.
Who is eligible for NABARD subsidy?
Farmers, individual entrepreneurs, NGOs, companies, and organized groups (like SHGs and dairy cooperative societies) are eligible to apply for a NABARD dairy farm loan and subsidy.