Dairy Farming Loan Subsidy, Schemes In Tamil Nadu

Dairy Farming Loan, Subsidy, Schemesin Tamil Nadu:

Today, let us discuss Dairy Farming Loan Subsidy, Schemes in the state of Tamil Nadu.

The growth of milk production is shaped by socio-economic, technological, and institutional factors, which act both on the demand and the supply sides. The demand-related economic factors which influence milk production include per capita income, population growth, urbanization, the price of milk and its substitutes, the income and expenditure elasticity, and consumption pattern. Technological and institutional factors are related more to the supply side than the demand side. For instance, for augmenting milk production, farmers would take efforts to increase the productivity of milch animals, besides altering the composition of the milch animal stock. For increasing productivity, technological improvement in breeding, feeding, and management practices would be resorted to. Institutional factors such as in marketing (cooperatives), veterinary support (Animal Husbandry Department and AA YIN), and dairy schemes of the State may also be adopted.

This article focuses on the analysis of the trends, sources of growth, and factors of growth of milk production in Tamil Nadu.

Factors that influence Dairy Farming in Tamil Nadu:

Dairy Farming Factors.
Dairy Farming Factors.
  • The growth in milk production must have been due either to an increase in the milch animal population or by an increase in their productivity or to changes in both. The dominant factor contributing to the growth in milk production is the productivity (yield) of the milch animals. The dominance of the yield effect is true in the growth of both cow milk and buffalo milk.
  • Technology has an important role in determining the pace and pattern of milk production and the performance of the dairy economy.
  • Accordingly, high-yielding bovines were introduced, and the existing stocks were improved by crossbreeding using artificial insemination technology. Along with efforts for improvement in the breed quality, attempts were also made in bringing about technological changes in feeding practices with a view to realizing to the maximum extent possible the production potential of the animals.
  • The productivity of milch animals is highly influenced by their breed character. Hence, efforts were initiated to popularize high-yielding (cross-bred cows and Murrah-graded buffaloes) animals. The crossbreeding of cattle and upgrading of buffaloes were the main thrusts of the breeding technology used for raising milk production. The rationale for this strategy was that the new breeds are more productive, and their unit cost of milk production is lower than that of the local non-descript breeds. The yield rate of the exotic and crossbred cows was found to be almost double the amount of the milk yield of the non-descript cows. Official agencies and individual researchers advocated crossbreeding in cows and upgrading buffaloes for increasing milk production.
  • Though cross-breeding of the indigenous breeds of cows with exotic breeds and of local buffaloes with Murrah buffaloes could be affected both by natural service and artificial insemination, the latter approach was emphasized in all the dairy development projects in Tamil Nadu. This strategy aimed at improving the genetic quality of the milch animals at large and orienting the developmental programs increasingly towards dairying.
  • Owing to the advantages of artificial insemination, efforts were initiated to adopt this technique for genetic improvement and breed development of milch animals. Increasing the coverage of animals by artificial insemination and improving the efficiency of artificial insemination were the two major aspects on which due attention was given. The importance of the spread and development of artificial insemination in Tamil Nadu could be understood from the data available from the National Sample survey of the 30th round (1975-76). The diffusion of artificial insemination in Tamil Nadu was relatively higher than in all-India during the mid-‘ seventies. As the implementation of artificial insemination was mooted as a major plank of the breed improvement efforts during the subsequent periods also, one would expect a drastic improvement in the breeding practices over time.
  • Along with changes in the breeding practices, structural changes in feeding practices, particularly in the feeding of milch animals also took place. Only if both go together, would the fruits of genetic improvement become available. We examine below the changes in the feeding practices in general and feeding of milch animals in particular in the state.

Read this: Government Schemes for Goat Farming.

Feeding Practices in Tamil Nadu:

The technology adopted in feeding could be understood by examining the feeding practices, are followed and the composition of feed inputs fed to the animals. The importance of feeding the animals systematically had been realized right from the beginning of this century. Efforts were made to quantify the nutrient requirement of animals of various types and categories, to assess the nutrients of feeds and fodders, to recommend ‘feeding standards’ for animals of different categories, and to suggest optimum balanced rations.

Dairy Feeding.
Dairy Feeding.
  • Feeding practices are of three types: grazing, stall-feeding, and a combination of both. Feeding practices vary according to seasons, regions, and the breed and type of animals maintained. When dairying develops with high-yielding animals, feeding practices also shift from grazing first to grazing and stall-feeding and later to stall-feeding alone. Such shifts in feeding practices are also conditioned by population growth and its pressure on land and changes in land use and cropping patterns and agrarian relations.
  • Feed cost is the major item of cost of milk production and the prices of feeds and fodders are closely associated with their nutrient contents.
  • The nutrient requirements of animals vary significantly across sex, age, breed, species, and functional category.
  • The nutritional requirement of milch animals is influenced by their body weight (maintenance and growth), reproduction status, and lactation levels.
  • The nutrition values of feeds and fodder vary significantly across dry, green, and concentrate feedstuffs.
  • It is difficult to recommend a balanced ration (optimal combination of inputs which provides the required nutrients at a low cost) particularly in the unorganized dairy sector, as the nutrient values and prices of feed inputs vary significantly across regions, seasons, and individuals.
  • Concentrate feeds and mixtures that are generally of high value in terms of their nutrient content are fed so as to augment milk yield. There exists a positive association between the quantity of concentrate fed and average milk yield. Hence, the quantity of concentrate feed inputs fed is considered an important quantitative indicator of feeding improvement. 

Therefore, there is a need to examine changes in the feeding practices followed and, in the quantities, and qualities of feed and fodder inputs fed to the animals over time.

The milch animals, which were exclusively stall-fed or were both stall-fed and grazed, are provided, different combinations of feed inputs. Though the feed inputs are of several varieties, forms, and nutrient content, they may be broadly divided into two categories: roughages and concentrates. Milch animals are fed with green fodder, dry fodder, and concentrates, but their inter proportions vary significantly. Such variations are due to the breed and type of milch animal, milk yield, the price of feeds, the season of the year, and the availability of feeds and fodder. The various compositions of feeding may be grouped into six categories as shown here below:

  • Green fodder only
  • Dry fodder only
  • Green fodder+ Dry fodder
  • Green fodder + Concentrates
  • Dry fodder + Concentrates
  • Green fodder + Dry fodder + Concentrates

For ideal feeding of milch animals, a combination of dry+ green+ concentrates is recommended. In addition to improvements in breeding and feeding practices, there is a need to adopt efficient dairy herd management practices for maintaining the quality of stock and augmenting milk yields, and economic utilization of scarce resources. Some such practices are the maintenance of high milk-yielding animals belonging to lower parity orders.

Constraints to Expanding Milk Production In Tamil Nadu:

The major limiting factors to increasing State milk production are:

  • Crop residual/byproduct ration: Opportunities to expand milk yields by improving the quality of crop residuals and byproducts are limited. Moreover, the demand for food grains to feed India’s large and growing population restricts the availability of grain for dairy animals and largely precludesdisplacing grain crops with green forage crops.
  • Building dairy management skills: A major challenge to expanding Indian milk production is improving cow/buffalo management expertise for the vast number of dairy farmers in Tamil Nadu. Many of these farmers are women who suffer a lower literacy rate than the male population, making training difficult.
  • Adherence to the smallholder model: It is recommended that the smallholder model must be maintained to alleviate rural poverty. While larger, more productive dairy operations are tolerated by government officials, they are viewed with some skepticism because of their perceived effect on rural employment and income distribution. But larger farms are also needed if demand grows rapidly and India wishes to remain self-sufficient in milk production.

Read this: Poultry Farming Business Plan.

Distribution of Native Breeds of Tamil Nadu:

Kangayam Cattle: this is a draught breed, distributed in Erode District, parts of Coimbatore, Dindigul, Karur, Kancheepuram, Pudukkottai, Salem, Tiruchirappalli andNamakkal districts of Tamil Nadu.

Bargur Cattle Breed: Bargur breeds reared mostly in the forest areas of Bargur hills Generally, these indigenous breeds are in brown color with white marking These Animals are in Medium Size but well-built As like most of the indigenous cows, Bargur cow also poor milker But it (bullocks) well known for its speed and endurance.

Umblachery – cattle breed (Cow/Bull): Umblachery cattle breeds reared mostly the coastal plains of Thanjavur, Nagapattinam and Tiruvarur districts, Tamil Nadu These Cow/Bull Calves mostly red or brown color at birth with all unique marking on the face, tail and limbs Generally, hocks have white marking (near the toe) Dehorning of bullocks is the peculiar practice in the Umblachery.

Dairy Development Schemes in Tamil Nadu:

Dairy farming is the best source of income for millions of poor households across the country, and it is not only as a source of income but also as a major source of protein, supplementary nutrition, fertilizer, fuel and store of wealth. In the early days, farmers reared indigenous or native breeds of cattle that have low production capacity. To improve the milk production and productivity of dairy animals, Central and State Government made their steps forward through the implementation of various dairy development programs over the years. Which resulted in, increased milk production in the country and as the state had shown a tremendous increase.

Agencies that implement Dairy Development Schemes in Tamil Nadu:

  • Department of Animal Husbandry (DAH), Tamil Nadu.
  • Dairy Development Department (DDD), Tamil Nadu.
  • Tamil Nadu Veterinary and Animal Sciences University (TANUVAS) and
  • Tamil Nadu Livestock Development Agency (TNLDA)

Funding Agencies for Dairy Development Schemes in Tamil Nadu:

  • Central Government and State Governments.
  • International agencies like World bank and other private funding agencies

Dairy Development Programs in Tamil Nadu: 

For Improvement in Breeding:

  • Door step Artificial Insemination (AI)
  • Buffalo calf management
  • Distribution and management of heifer calves
  • Oestrus synchronization and artificial insemination
  • Production, storage and distribution of frozen semen

For Feed and Fodder Development:

  • Fodder seed / seedling development (fodder seed bank) and distribution
  • Enhancing fodder cultivation by farmers in their field
  • Efficient utilization of fodder through chaff cutter, silage making, etc.
  • Efficient utilization of feed like by-pass protein supplementation
  • Mineral mixture production and distribution

For Animal health care:

  • Infrastructure and manpower for providing dairy animal health care
  • Conduct of mass contact programs through “KalnadaiPadukappuThittam”
  • Livestock insurance schemes
  • Vaccine and diagnostics, production, efficient vaccination and deworming

Marketing and infrastructure development in milk collection and processing:

  • Strengthening of co-operatives for efficient milk collection
  • Clean milk production and efficient milking through milking machines
  • Efficient milk storage through bulk coolers
  • Efficient milk transportation through cold chain network
  • Quality laboratory for maintaining milk quality
  • Value added milk products manufacture

For Technological empowerment:

  • Empowerment of technical staff
  • Training to dairy farmers for skill creation and improvement
  • Exposure visits to farmers

Oestrus Synchronization Techniques:

About 30 per cent of milch animals suffer from reproductive failure, resulting in very long calving interval of more than two years as against the desired one year. Hence, the adoption ofOestrus synchronization technique in cows and buffaloes leads to improved fertility, reduced inter calving period, improved milk production and enhanced economic returns to the farmer. Oestrussynchronization technology involves the use of certain drugs to bring a group of cows and buffaloesinto oestrus at a predetermined time and breeding them.

Read this: Fish Hatchery Business.

Supply of mineral mixtures

Majority of cows and buffaloes in Tamil Nadu are suffering from mineral deficiency leading to infertility problems, lesser conception rate, increase in inter-calving period, decrease in production and productivity of milch animals. To eliminate such problems caused by mineral deficiency under field conditions, a mineral mapping scheme was implemented through the funding of NADP and implemented by TANUVAS. Mineral deficiency map was drawn based on the mineral status of soil, grass and blood / serum of dairy animals in all the districts of Tamil Nadu. Based on the results of the study, cost effective “TANUVAS SMART” mineral mixture was introduced for the benefit of dairy farmers of Tamil Nadu. Supply of one kg or two kilograms of mineral mixtures to dairy cattle and buffalo farmers in Tamil Nadu through various development schemes helped the farmers in the rectification of mineral mixture deficiency and improvement in conception rate, animal productivity and milk production.

Fodder Development Schemes in Tamil Nadu: 

Availability of fodder for dairy animals is a major constraint experienced by the dairy farmers of Tamil Nadu due to urbanization, shrinkage in grazing land, competition for land with agricultural crops. Fodder Development Programs are funded by the Central (NADP) and State Governments (TNIAMWARM) and implemented by the Department of Animal Husbandry, Dairy Development Department and TANUVAS. The fodder development is achieved through the production of fodder seeds/seedlings / slips in Government farms, Establishment of fodder seed banks in Government farms /farmers’ field, supply of fodder seeds / seedlings / slips, etc.

Loans for Dairy Farming in Tamil Nadu: 

SBI is offering two bank loan schemes for Dairy related agricultural projects. The first one is -SBI Scheme For Dairy Societies- that provides finance for creating infrastructure like Construction of Milk house or Society office, Purchase of Automatic milk collection system, transport vehicles, Bulk chilling unit; and the second one is SBI Dairy Plus Agriculture loan scheme that provides finance for milk producing societies recognized private milk dairies posting profits in the past two years.

SBI DAIRY PLUS AGRICULTURE LOAN SCHEME: gives loans from 50000 to 5 Lakhs.

SBI DAIRY SCHEME FOR Dairy Societies: LIMIT OF LOAN FOR DAIRY SOCIETIES: Milk house or society office Rs. 2 lakh, Automatic milk collection system Rs. 1 lakh, Milk transportation Rs. 3 lakh, Chilling Unit Rs. 4 lakhs. 

Subsidies for Diary Farming by Tamil Nadu Government: 

Scheme for subsidy on interest for starting a Commercial Dairy Farm with 1 to 20 milch animals.

  • Dairy farming is an important source of constant subsidiary income. The small and poor farmers can purchase 1 to 20 animals as per their need and capacity to maintain. If any bank recognized by Indian Reserve Bank sanction loan for any dairy animal cow & buffalo, the beneficiary can get interest subsidy @ 12 % interest on the bank loan amount (as per unit cost of NABARD guideline). It also provides a good quality organic manure for improving. Crop fertility & crop yields. Dung is also used as fuel for domestic purposes. The surplus fodder agricultural by products is utilized by animals & converted into value-add products viz. Milk, Meat etc.

NABARD Dairy Farming Subsidy Schemes:

The following is the details of assistance provided under the NABARD subsidy for the Dairy Farming scheme in Tamil Nadu:

Type1: For establishment of small dairy units with crossbred cows/ indigenous descript milch cows like Sahiwal, Red Sindhi, Gir, Rathietc / graded buffaloes up to 10 to 15 animals.

  • Investment: the investment will be Rs 5.00 lakh for 10 animal units – minimum unit size is 2 animals with an upper limit of 10 animals.
  • Subsidy: 25% of the investment (33 .33 % for SC / ST farmers,). The Subsidy shall be restricted depending on the unit size.

Type2: Rearing of heifer calves – cross bred, indigenous descript milch breeds of cattle and of graded buffaloes – up to 20 calves.

  • Investment: Rs 5 lakh for 20 calf units – minimum unit size of 5 calves with an upper limit of 20 calves.
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers. The Subsidy shall be restricted depending on the unit size.

Type3: Vericompost (with milch animal unit.To be considered with milch animals and not separately).

  • Investment: Rs. 20,000/-
  • Subsidy: 25% of the investment  (33.33 % for SC / ST farmers).

Type4: Purchase of milking machines /milkotesters/bulk milk cooling units (up to 2000 lit capacity).

  • Investment: Rs 18 lakh.
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers).

Type5: Purchase of dairy processing equipment for manufacture of indigenous milk products.

  • Investment: Rs 12 lakh.
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers).

Type6: Establishment of dairy product transportation facilities and cold chain.

  • Investment: Rs 24 lakh.
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers).

Type7: Cold storage facilities for milk and milk products.

  • Investment: Rs 30 lakh.
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers).

Type8: Dairy marketing outlet / Dairy parlor.

  • Investment: Rs 56,000/-
  • Subsidy: 25% of the investment (33.33 % for SC / ST farmers).

In case if you are interested in this: Quail Farming Business Plan.


  1. Hi Sir/Mam,

    Im planning to start a diary farm with min of 5 cows i want to process the loan. Kindly guide me with further details


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