Milk Production Management & Dairy Development

Lesson 29. INTEGRATED INFRASTRUCTURE OF MILK PRODUCTION: PUBLIC SECTOR DAIRY/MILK SUPPLY SCHEMES, AND STRATEGIES OF CATTLE DEVELOPMENT AND POLICIES

Module 15. Functioning pattern of Indian dairying

Lesson 29
INTEGRATED INFRASTRUCTURE OF MILK PRODUCTION: PUBLIC SECTOR DAIRY/MILK SUPPLY SCHEMES, AND STRATEGIES OF CATTLE DEVELOPMENT AND POLICIES

29.1 Introduction

This chapter discusses some of the major schemes implemented by Government of India (GOI) to develop dairy sector of the country. It gives detailed description of major schemes in terms of implementing agency, period and mode of implementation.

29.2 Schemes for Dairy Development from GOI

Following Operation Flood, the Government of India had been implementing various dairy development schemes since 1993-94 and is presently implementing Centrally Sponsored schemes "Intensive Dairy Development Programme", "Strengthening Infrastructure of Quality & Clean Milk Production", Central Sector schemes: "Assistance to Cooperatives" & "Dairy/Poultry Venture Capital Fund" with focused objectives. Apart from these, Government is also envisaging implementing a scheme "National Project for Cattle and Buffalo Breeding" for genetic improvement of cattle and buffalo to increase the productivity. Government is also examining launching of a National Dairy Plan with an outlay of more than Rs 17000 crores spread for over a period of 15 years to enhance average incremental production of milk from 2.5 million tonnes to 5 million tonnes annually. This is being envisaged through increasing productivity, expanding infrastructure for procurement, processing, marketing and quality assurance. Simultaneously the Government has launched a new scheme called Rashtriya Krishi Vikas Yojana (RKVY) with a massive investment of Rs 25,000 crore for the next 4 to 5 years to promote agriculture and allied sectors. All these activities are expected to help India emerge as a major player in the world dairy sector.

29.2.1 List of centrally sponsored schemes

1. Intensive Dairy Development Programme (IDDP)
2. Strengthening infrastructure for quality & clean milk production
3. Evaluation study report of strengthening infrastructure for quality & clean milk production Central Sector

29.2.2 List of central sector schemes

• Assistance to Cooperatives
• Dairy/Poultry venture capital funds (implemented up to 31st August, 2010) DVCF
  

a. Dairy Venture Capital Fund
b. Dairy Entrepreneurship Development Scheme

• Evaluation study report of Dairy/Poultry venture capital funds
• Milk and Milk Product Order'1992 - This scheme is discussed in other lesson

29.3 Details of Schemes

29.3.1 Intensive Dairy Development Programme: Intensive Dairy Development Programme (IDDP) is a Centrally Sponsored Plan Scheme.

• Objectives/Aims of Scheme

1. Development of milch cattle.
2. Increase milk production by providing Technical Inputs services.
3. Procurement, Processing and Marketing of milk in a cost effective manner.
4. Ensure remunerative prices to milk producers.
5. Generate additional employment opportunities.
6. Improve social, nutritional and economic status of residents of comparatively more disadvantaged areas.

• Year of the Scheme Started: 1993-94.

• XIth Plan outlay: Rs 225.00 Crore (merged allocation).

• Implementing Agency: State Dairy Federations/District Milk Union.

• Target/Beneficiaries: Rural milk producers irrespective of caste, class and gender. Cattle induction only for SC, ST and BPL families.

• Pattern of Assistance/Funding and Eligibility Criteria: The pattern of funding is 100% grant-in-aid from Central Government for the districts where investment (central grant) under Operation Flood (OF) programme was less than Rs 50.00 lakh. There is a maximum allocation of Rs 300.00 lakh per district under the programme. For establishment of dairy processing capacity up to 20,000 litres/day will be 100% grant-in-aid basis. Above this cap, OF pattern will be followed, namely, 70% loan and 30% grant.

Table 29.1 Year-wise outlay and expenditure under the scheme for the last 5 years (Rs. in crore)

Year	2005-06	2006-07	2007-08	2008-09	2009-10
B.E Provision	50.00	23.00	23.00	29.99	32.49
Actual Exp.	39.91	33.61	34.68	31.62	31.97

Table 29.2 Physical targets and achievements (Cumulative)

Component	Targets	Achievements upto 31.12.2009
Organization of Dairy Cooperative Societies	28300	26597
Enrolment of Farmer Members (in thousands)	2149.90	1940.98
Districts covered	209 districts in 26 States and a U.T.

Procedure for Applying: District wise project to be prepared based on a benchmark survey and as per guidelines laid down under IDDP Scheme and to be submitted through the concerned State Government. A project may include one to five districts depending upon the capability of implementing agency to implement in a period of three to five years.

29.3.2 Strengthening Infrastructure for Quality & Clean Milk Production: Strengthening Infrastructure for Quality & Clean Milk Production (CMP) is a Centrally Sponsored Plan Scheme.

• Objectives of the scheme

1. Creation of necessary infrastructure for production of quality milk at the farmer’s level up to the points of consumption.
2. Improvement of milking procedure at the farmer’s level.
3. Training and Strengthening of infrastructure to create mass awareness about importance of clean milk production.

• Implementing Agencies: This scheme is being implemented through the State Government by District Cooperative Milk Union/State Level Milk Federation.

• Target group/beneficiaries: Farmer members of Primary Dairy Co-operative Societies are targeted for assistance under the scheme through training programmes to create awareness regarding importance of clean milk production.

• Pattern of Assistance/Funding (proposed during 11th Plan): The Scheme is implemented on 100% grants-in-aid basis to the State Government/UTs for the components, training of farmer members, supply of detergents and antiseptic solutions, stainless steel utensils, strengthening of existing laboratory facilities whereas 75% financial assistance is provided for setting up of milk chilling facilities at village level in the form of bulk milk coolers.

• Year when the scheme started: This scheme was started during the year 2003-04 (Oct 2003) with a total outlay of Rs30.00 crore for the Tenth Five year Plan. It is being continued during the 11th Five year Plan as merged scheme together with ‘Intensive Dairy Development Programme’(IDDP) with a total plan outlay of Rs 225.00 Crore (IDDP&CMP) and budget provision of Rs 21.25 Crore for CMP during 2010-11. The evaluation and impact study has been completed and steps are being taken to modify the scheme.
  

Table 29.3 Annual BE during Xth and XIth Plan period (Central assistance): (Rs in crore)

Xth Plan period
Year	BE	Expenditure
2004-05	8.42	24.64
2005-06	20.00	30.39
2006-07	35.00	24.65
XIth Plan Period
2007-08	16.00	20.88
2008-09	20.00	21.29
2009-10	20.60	21.76

• Achievement: Since inception, 144 projects for 21 states and 01 UT with a total cost of Rs 228.84 crore with a central share of Rs 186.76 crore have been approved up to 31.03.2010 under the scheme. So far under this scheme 5.43 farmers were trained and 1716 numbers of Bulk milk coolers with a total chilling capacity of 31,27,300 Litre per day has been installed and 1157 existing laboratories have been strengthened.

 

29.3.3 Assistance to Co-operatives

• Objectives and Aim of the Scheme: To revitalize the sick dairy co-operative unions at the district level and co-operative federations at the State level.

• Implementing Agency: The scheme is being implemented by the concerned District Co-operative Milk Unions/State Dairy Federation. The Central grants under the Scheme are to be provided to the Milk Unions/Federations through NDDB.

• Target Group/Beneficiaries: A number of dairy co-operatives with three-tier structure viz. village level primary co-operatives, district level unions and state level federations have been set up in different parts of the country under the Operation Flood Programme. For a variety of reasons, a number of these unions/federations have accumulated losses. These accumulated losses have been imposing severe hardships to the milk producers and their dairy economy, resulting in, among other things, delayed and irregular payments to the poor farmer members of these co-operatives. The Scheme seeks to assist the sick Co-operative Milk Unions/Federations to rehabilitate them and make them viable.

• Pattern of Assistance/Funding Pattern: The funds are released on 50:50 sharing basis between Union of India and the concerned State Government. The maximum assistance of grant is limited to the minimum amount required so that the net flow becomes positive within seven years. In any case, the total grant does not exceed the accumulated cash losses.

• Year when the Scheme Started: 1999-2000 (January, 2000)

Table 29.4 Plan allocation and expenditure incurred under the scheme during IX, X, and XI plan period is under: (Rs in lakh)

Plan	Allocation	Actual expenditure
9th Plan	15000.00	3500.00
10th Plan	13000.00	3914.24
11th Plan	5000.00	2525.00 (till 31.3.10)

Table 29.5 Year-wise outlay and expenditure under the scheme for the last 8 years: (Rs in lakh)

Year	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10
B.E Provision	1500.00	900.00	1500.00	1000.00	500.00	350.00	700.00	900.00
Actual expenditure	1665.24	271.00	981.50	546.50	450.00	505.00	900.00	1120.00

• Eligibility Conditions: Only those Unions/Federations are considered where the concerned State Government agrees to:- Provide matching contribution for rehabilitation assistance, Grant autonomy to the co-operatives in the matter of pricing decision and staff matters, and Ensure regularity of statutory audit

• Physical targets & Achievements: Since inception 37 rehabilitation proposals of milk unions in 12 states namely, Madhya Pradesh, Chattisgarh, Karnataka, Uttar Pradesh, Haryana, Kerala, Maharashtra, Assam, Nagaland, Punjab, West Bengal and Tamil Nadu at a total cost of Rs 271.00 crore with a central share of Rs 135.69 crore have been approved upto 31.03.2010. A sum of Rs 39.14 crore was incurred against outlay Rs 130 crore provided during X plan period. Since inception a total sum of Rs 99.39 crore has been released till 31.03.2010. The scheme is proposed to be continued with an outlay of Rs 50.00 crore during XI Five Year Plan. An amount of Rs 8.30 crore in BE has been provided for continuation of the scheme during 2010-11.

29.3.4 Dairy/Poultry venture capital funds

To bring about structural changes in the unorganized sector, the measures like milk processing at village level, marketing of pasteurized milk in a cost effective manner, quality up-gradation of traditional technology to handle commercial scale using modern equipment and management skills, the Venture Capital Fund for Dairy and Poultry sector was started in Xth plan and Planning Commission has approved the scheme for continuation during XI plan with an enhanced outlay of Rs 300 crore. However the dairy and poultry components have been separated into two new schemes during 11th Plan and are now termed as Dairy Venture Capital Fund (DVCF) with a separate allocation from 2009-10. Under the scheme, financial assistance is provided as loan to the rural/urban beneficiaries under a schematic proposal through bankable projects. This scheme was approved in Dec. 2004 i.e. during 10th Five Year Plan with a total outlay of Rs 25.00 crore against which an amount of Rs 28.00 crore were released. The scheme is being implemented through NABARD and the funds released by GOI to NABARD are kept as revolving fund. Since inception, a sum of Rs 132.99 crore has been released to NABARD for implementation of scheme throughout the country. An amount of Rs 20.00 crore has been released during the year 2009-10.

29.3.5 Dairy Venture Capital Fund

• Objectives of the scheme

1. To promote setting up of small dairy farms for milk production.
2. To bring structural changes in the unorganized sector: processing and marketing of pasteurized milk at village level.
3. To bring about upgradation of quality and traditional technology to handle milk on a commercial scale.

• Implementing Agencies: National Bank for Agriculture & Rural Development (NABARD) will be the Nodal Agency for implementation of the scheme. Commercial Banks, Co-operative Banks and Regional Rural Banks will implement the scheme. The scheme is open to organized as well as unorganized sector.

• Target group/beneficiaries: The Department has proposed this scheme for dairy development in the unorganized sector by providing financial assistance through NABARD to the promoter on the basis of bankable project recommended by NABARD. This scheme shall also help in employment generation at village level as well as Dairy Co-operative Society level.

• Pattern of Assistance

Entrepreneur’s contribution - 10%
Interest free Loan from revolving fund provided by GOI - 50%

Bank loan at interest applicable for agricultural activities - 40%

Government of India subsidizes the interest component applicable for agricultural activities to the extent of 50% only in case of regular/timely repayment by the beneficiary.

• Year when the scheme started: Dairy/Poultry Venture Capital Fund scheme was started in Dec 2004 with an outlay of Rs 25.00 Crore. The fund was released during 2005-06 for the first time for implementation of the scheme. Planning Commission has approved the scheme for continuation during XI plan with an enhanced outlay of Rs 300 crore. However the dairy and poultry components have been separated into two new schemes during 11th Plan and are now termed as Dairy Venture Capital Fund (DVCF) with a separate allocation from 2009-10.

Table 29.6 Annual outlay/expenditure (Central Assistance): (Rs. in crore)

Year	2005-06	2006-07	2007-08	2008-09	2009-10
RE/BE provision	14.00	15.00	49.99	35.00	20.00
Expenditure	15.80*	12.20*	49.99*	35.00*	20.00*

*Fund has been released, to be kept as revolving fund by NABARD to provide interest free loan to the beneficiaries.

• Physical Targets and achievements: No physical targets have been specified, as it is a demand driven scheme. Progress as on 31st March 2010 indicates sanctioning of 15368 Dairy Units with revolving fund assistance of Rs 146.91 crore.