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Dairy Entrepreneurship Development Scheme (DEDS) Explained

The Department of Animal Husbandry, Dairying and Fisheries launched the Venture Capital Scheme for Dairy and Poultry in 2004. This scheme aimed to promote the development of small dairy farms and boost self-employment and other components in the Indian dairy industry.

However, the government revamped the scheme in 2010 to the Dairy Entrepreneurship Development Scheme (DEDS). Now, it is more comprehensive for effective implementation of its objectives. Continue reading to know more information about DEDS.

Team Digit

Objectives of the Dairy Entrepreneurship Development Scheme

The DEDS scheme aims to meet the following objectives -

Encourages modern dairy farms’ development and produces pure milk.
Creates self-employment opportunities and offers infrastructural growth to the Indian dairy sector.
It aims to conserve effective breeding stock by promoting heifer calf rearing.
Upgrade the age-old technology to process milk commercially.
It aims to bring in changes in this unorganised sector’s structure. This ensures that the initial milk processing takes place in villages.
Promote milk production and milk products’ processing to provide quality milk items.

What Is the Assistance Pattern in DEDS?

Here is table illustrated below detailing the funding pattern under this scheme -

Entrepreneur contribution for loan exceeding ₹ 1.6 lakh	Minimum 10% of the total outlay
Bank-ended DEDS subsidy	₹25% of the total project cost for candidates under the General category. While it is 33.33% for farmers under SC or ST category
Bank loan	Balance portion (minimum 40% of the total project cost). However, the amount of loan is subject to change under the RBI guidelines)

What Is the Rate of Interest and Repayment Tenure Under DEDS?

Take a look at the following details related to interest rates and repayment tenure offered in DEDS under NABARD:

Interest Rates

Dairy Entrepreneurship Development Scheme offers loans at interest rates that are determined according to the RBI guidelines.

The bank can charge interest rates on the entire loan amount till the beneficiary receives a subsidy. Moreover, the interest rate will be applicable from the date of receiving the subsidy on the bank loan portion (subsidy subtracted from a bank loan).

Repayment Tenure

The repayment tenure of loans varies between 3 to 7 years. The grace period for dairy farms to repay the loan is 3 to 6 months. At the same time, beneficiaries with the ownership of calf rearing units are eligible for up to 3 years of a grace period. However, it entirely depends on the bank’s decision.

Eligibility Parameters of DEDS

Here is the list of the beneficiaries eligible to enjoy the benefits of the Dairy Entrepreneurship Development Scheme under NABARD:

1. Farmers, groups of organised and unorganised sectors and individual entrepreneurs are eligible for this scheme. Groups of organised sectors include the following –

Dairy cooperative society
Self-help groups
Milk unions
Panchayati Raj institutions
Milk federation etc.

2. More than one member of the beneficiaries’ family can avail this scheme. However, they must establish separate units at different locations and with different infrastructure. The distance between the two farms of similar family members must be 500 metres.

3. Eligible beneficiaries can apply once for each component under Dairy Entrepreneurship Development Scheme (DEDS).

4. Projects implemented under cluster mode are given preference. It covers the projects under the ownership of dairy farmers, women self-help groups, producer companies, and cooperatives.

5. This scheme offers preference to weaker sections of society which includes the following-

Women, Scheduled Caste or Scheduled Tribes
Marginal farmers and farmers under below poverty level
Farmers residing in drought-prone areas
Landless farmers

How to Apply for DEDS?

Once you meet the eligibility criteria, approach your nearest Chief Animal Husbandry Officer, Block Veterinary Officer or Veterinary Assistant Surgeon along with supporting documents.

Important Documents Required for DEDS Application

You need to submit the following documents to apply for the DEDS scheme under NABARD:

An affidavit as proof of being unemployed and a non-defaulter of any financial institution
Documents related to the land to be mortgaged if the loan amount exceeds ₹1 lakh.
A photocopy of your ration card, caste certificate
Your three recent passport-sized photographs
Degree certificate of BVSc&AH in case of Mobile or Stationary Veterinary Clinic.
A photocopy of driving licence if the unit is a refrigerated vehicle

What Are the Components and Patterns of Assistance Under DEDS?

Take a look at the table mentioned below, representing components that DEDS can finance along with the assistance pattern and unit cost:

Type of Components	Assistance Pattern	Unit Cost
Development of small dairy farms with crossbred cows or or indigenous descript milch cows like Sahiwal, Gir, etc. or graded buffaloes	33.33% for SC or ST farmers (25% of the total project cost for general categories) as back-ended subsidy. Subsidies are subject to the restriction on a pro-rata basis to a maximum of 10 animals, subject to a ceiling of ₹17,500/animal (or ₹23,300 for SC/ST farmers), whichever is lower. Beneficiaries can buy animals at higher prices. However, the subsidy is limited to the ceiling mentioned above.	₹7 lakh for 10 animals, Minimum unit size – 2 animals, Maximum unit size – 10 animals.
Vermicompost with milch animals (to be considered with milch animals and not as separate units)	33.33 % for SC or ST farmers (25% of the total project cost for general categories) as back-ended subsidy. Subsidies are limited to the ceiling of ₹ 6,300 or 8400 for SC or ST farmers or actual cost (whichever is lower).	₹25,200
Heifer calves rearing – breeding of indigenous descript milch breeds of cattle, graded buffaloes and crossbreeds	33.33 % for SC or ST farmers (25% of the total project cost for general categories) as back-end subsidy. This subsidy is limited to a pro-rata basis to a maximum of 20 calves. And subject to a maximum subsidy of ₹12,100/ per calf or 16,200 for SC or ST farmers or actual cost (whichever is lower).	₹9.70 lakhs for 20 calves Maximum unit – 20 calves
To purchase milking machines or milk cooling units or milk testers	33.33 % for SC or ST farmers (25% of the total project cost for general categories) as back-end subsidy. The subsidy is restricted to a ceiling of ₹5 lakh or ₹6.67 lakh for SC or ST farmers or actual cost (whichever is lower).	₹20 lakh
Setting up of a dairy product transportation and cold chain	33.33 % for SC or ST farmers (25% of the total project cost for general categories) as back-end subsidy. It is subject to a ceiling of ₹6 lakh and ₹8 lakh for SC or ST farmers or actual cost (whichever is lower).	₹26.50 lakh
To purchase dairy processing equipment to manufacture indigenous milk products	33.33 % for SC or ST farmers (25% of the total project cost for general categories). The subsidy is restricted to a ceiling of ₹3.30 lakh and ₹4.40 lakh for SC or ST farmers or actual cost (whichever is lower).	₹13.20 lakh
Establishment of cold storage facilities for milk items and milk	33.33 % for SC or ST farmers (25% of the total project cost for general categories). The subsidy is restricted to a ceiling of ₹8.25 lakh and ₹11 lakh for SC or ST farmers or actual cost (whichever is lower).	₹33 lakh
Establishment of dairy outlet/dairy parlour	33.33 % for SC or ST farmers (25% of the total project cost for general categories) as back-end subsidy. The subsidy is limited to a ceiling of ₹ 75,000 and ₹1,00,000 for SC or ST farmers or actual cost (whichever is lower).	₹3 lakh
Establishment of private veterinary clinics	33.33 % for SC or ST farmers (25% of the total project cost for general categories). The subsidy is restricted to a ceiling of ₹65,000 for mobile clinics and ₹86,600 for SC or ST farmers or actual (whichever is lower). At the same time, ₹50,000 for stationary clinics and ₹66,600 for SC/ST farmers or actual cost (whichever is lower).	₹2.60 lakh for mobile clinics, ₹2.0 lakh for stationary clinic

Who Are the Implementing Agencies of DEDS?

The nodal agency to implement DEDS under NABARD is National Bank for Agriculture & Rural Development (NABARD).

Also, note the list of financial institutions which qualify for refinancing from this scheme:

Commercial banks
Urban, rural and regional banks
State Cooperative Agriculture and Rural Development Banks and State Cooperative Banks
Other eligible financial institutions for refinancing from NABARD.

Approximately 70 million farmers are associated with the Indian dairy sector. It contributes one-third of rural household income. However, difficulty in processing milk products, complex supply chain etc., are among the few challenges this industry faces. Thus, DEDS aims to reduce such challenges and boost this sector for its unparalleled growth.

Frequently Asked Questions

All

When was the new DEDS launched in India?

The Department of Animal Husbandry, Dairying and Fisheries launched the modified DEDS on 1st September 2010.

Is DEDS discontinued in India?

Yes. The Department of Animal Husbandry, Dairying and Fisheries discontinued DEDS only for 2020-21 due to inadequate fund allocation.

I want to start a small dairy business. Can DEDS help me with the cost?

Yes, definitely. The DEDS offers financial assistance and back-ended subsidies to individuals and groups looking to establish dairy units, chilling plants, or vermicompost pits. It's a great boost for rural entrepreneurs.

Besides machinery and setup costs, it's wise to factor in basic coverage like livestock insurance, home insurance and even personal health insurance, especially when you're working in an environment where veterinary exposure or physical labor is involved.