April 17, 2023

India merges two dairy-sector schemes to assist private sector

India has merged two dairy schemes, the Animal Husbandry Infrastructure Development Fund (AHIDF) and the Dairy Processing and Infrastructure Development Fund (DIDF), aiming to make funds from the balance outlay available to dairy and meat processing units in the private sector, Financial Express reported.

Launched in 2000, the AHIDF had an outlay of INR 150 million (~US$1.8 million; INR 10 = US$0.12) while the DIDF, which was implemented for five years until the last fiscal, saw under-utilisation of the INR 100 million (~US$1.2 million) crore outlay. An official from the department of animal husbandry and dairying said the merger would bring synergy in implementation and that there won't be any additional requirement of funds.

The Indian government is aiming to encourage private sector participation in creating dairy and meat processing infrastructure. Despite India being the world's biggest milk producer and one of the largest poultry meat producers, the private sector still holds a major share in the livestock sector. As per official estimates, only 20-25% milk produced in the country is processed. The government's goal is to increase milk processing to 40% over the next couple of years.

Both schemes provide interest subsidies and a longer repayment period in order to encourage cooperatives and the private sector to build dairy and meat processing infrastructure.

AHIDF, part of Prime Minister's Atmanirbhar Bharat Abhiyan stimulus package, focuses on increasing milk and meat processing infrastructure along with cattle feed manufacturing and providing access for unorganised rural milk and meat producers to organised markets.

AHIDF provides private entities, farmer producer organisations (FPOs), entrepreneurs, and micro and small businesses with bank loans with a 3% interest subsidy, credit guarantees, and a 10-year repayment period, including a two-year moratorium.

The Economic Survey (2022-23) showed that India's livestock sector grew at a CAGR of 7.9% during 2014-15 to 2020-21, and its contribution to total agriculture GVA has increased from 24.3% to 30.1% during the same period.

-      Financial Express