Government approves Rs 15000 crore for dairy and meat processing

The fund will help improve infrastructure, export, and employment

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Cabinet approves establishment of Animal Husbandry Infrastructure Development Fund (AHIDF). Photo - Susanne Jutzeler, suju-foto from Pixabay

In pursuance of recently announced Atmanirbhar Bharat Abhiyan stimulus package for ensuring growth in several sectors, the Cabinet Committee on Economic Affairs, chaired by prime minister Narendra Modi, has approved setting up of Animal Husbandry Infrastructure Development Fund (AHIDF) worth Rs 15000 crore.

Schemes for the development of dairy infrastructure

AHIDF would facilitate much-needed incentivization of investments in the establishment of such infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector. The eligible beneficiaries under the scheme would be Farmer Producer Organizations (FPOs), MSMEs, section 8 companies, private companies, and individual entrepreneurs with a minimum 10% margin money contribution. The balance 90% would be the loan component to be made available by scheduled banks.

According to the press statement, India’s Government will offer 3% interest subvention to eligible beneficiaries. There will be a two-year moratorium period for the principal loan amount and the six-year repayment period after that.

Government of India would also set up credit guarantee fund of Rs 750 crore to be managed by NABARD. Credit guarantee would be provided to those sanctioned projects which are covered under MSME defined ceilings. Guarantee coverage would be up to 25% of the credit facility of the borrower.

Program to help improve dairy production and milk production

The Rs 15,000 crore AHIDF and the interest subvention scheme for private investors will ensure capital availability to meet upfront investment required for these projects and help enhance overall returns or payback for investors. Such investments in processing and value addition infrastructure by eligible beneficiaries would also promote the export of these processed and value-added commodities.

Since almost 50 to 60% of the final value of dairy output in India flows back to farmers; therefore, growth in this sector can have a significant direct impact on farmer’s income. The size of the dairy market and farmers’ realization from milk sales is closely linked with the development of organized off-take by cooperative and private dairies. Thus, investment incentivization in AHIDF would leverage seven times private investment and motivate farmers to invest more in inputs, thereby driving higher productivity, leading to an increase in farmers’ income. The measures approved through AHIDF would also help in direct and indirect livelihood creation for 35 lakh.

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