How to increase milk yield and fat percent of a dairy cow/buffalo?

The milk yield and fat percentage is based on genetic potential of a buffalo or a cow. You cannot increase the milk yield beyond it’s genetic potential. But most dairy farmers in India, do not even get the actual potential milk yield from their dairy animals. The primary reason for this malnutrition as well as the dairy cattle are put into various stress factors.

So the easiest way to increase the milk yield to address the nutritional requirements as well as address the stress factors.

Address Nutritional Factors

  • Provide 20 to 25 kgs of green fodder. Don’t just provide only one variety of green fodder – try  to mix legumes such as hedge lucerne, cow pea along with regular fodder such as C04, Sorghum, etc. Chaff the green fodder – this will increase the nutritional intake as well as reduce wastage.
  • Provide 10 kgs of dry fodder. It is advised to provide dry fodder after evening milking.
  • Provide 4 kgs of concentrate feed – increase this quantity for high milkers. Don’t use just 1 variety of dhana – try to mix 1 oil cake such as cotton seed cake, groundnut cake or whatever locally available, 1 grain as maize powder and 1 husk such as black gram husk, paddy husk, etc. Soaking this overnight will ferment the feed and increase the nutritional intake.
  • Provide 50 grams mineral mixture – this is very important. If you do not provide provide mineral mixture it will result in micro-nutrient deficiency which will decrease milk yield as well cause reproductive issues.
  • Provide 30 liters of hygienic/clean water.

Address Stress Factors

  • Follow exact routine everyday.
  • Wash the animals twice a day.
  • Make sure the dung is cleared thrice a day.
  • Make sure the animals are not beaten or threatened.
  • Make sure there no mosquitoes in the shed.
  • Always milk at the same time and by the same person.
  • If the milker takes too long to milk the entire milk, then also milk yield will reduce.
  • Make sure to deworm the animals regularly. Worms in the stomach will drastically reduce milk yield.
  • Do not tie animals in direct sunlight. Allowing the animal to freely graze for at least few hours will increase the metabolism and also the animal will be happy – a happy animal produces more milk.
  • Buffaloes love water – if you have access to a pond, allowing them to wallow in the pond will have amazing effect and will result in longer lactation period and improve reproductive efficiency.

Basically, address all needs of a cow or a buffalo. When you do that, the cow or buffalo will give maximum milk that it can produce as well as milk fat and SNF will also increase.

How much profit can I earn from one Murrah Buffalo?

It depends on multiple factors such as purchase price of the animal, milk yield, milk sales price, feeding costs, worker charges, medicines, etc. The calculation can be for a lactation and cannot be directly derived for a single day or a month because a Murrah Buffalo is a living being and not a milk yielding machine!. So let’s calculate for a lactation and then derive your profit or loss for a month.

Say if you purchased a second lactation Murrah Buffalo which yields 12 liters per day for Rs 80,000 with an expected yield of 2400 liters per lactation . Assume the lactation period (the period when the buffalo gives milk) as 270 days and a dry period (the period when the buffalo is not giving milk) of 120 days. Lets say your selling price of milk is Rs 45 liter so total selling price per lactation is 2400 x 45 = Rs 108,000.

Now lets calculate the expenses for 390 days ( 270 lactation days + 120 dry days)

Green fodder = 25 kgs x .5 paise x 390 = Rs 4,625
Dry Fodder = 10 kgs x 1 Rs x 390 = Rs 3,900
Feed concentrate/dhana (avg) = 4 kgs x Rs 15 x 390= Rs 23,400
Labour charges (1 worker for 10 buffaloes @Rs 9,000/month) = Rs 30 x 390 = Rs 11,700
Interest for Rs 80,000 investment (18% rate) = Rs 40 x 390 = Rs 15,600
Medicines, mineral mixture, etc = Rs 10 x 390 = Rs 3,900
Miscellaneous  = Rs 5,875
So total expenses is Rs 69,000
So Profit is Rs 108,000 – Rs 69 ,000 = Rs 39,000 per cycle (13 months).
So for profit for 1 month is Rs 3,000.

The value of calves and sale of dung is not included in this calculation. If you take good care of the calves, it will cover for the replacement cost of the buffalo at the end of it’s productive phase.

You can frankly optimize many variables and increase your profit. For instance, if you directly sell the milk you can get a better price for milk. If you don’t borrow money to buy buffalo that also will increase your cash flow. If you do all the work then you can eliminate worker salary.

On the other side you can also make losses, for instance the buffalo can have a shorter lactation, buffalo could die, the calf could die or the buffalo might take longer to conceive for next cycle or the buffalo might have reproductive issues and not conceive at all. So all these factors can lead to losses. In some places, you milk sale price might not even be Rs 45 but there are lot of places where the demand for buffalo milk is so good that the price is as high Rs 70.

Conclusion is that Murrah buffalo is not a machine and so your profit or loss depends on how well you take care of the buffalo, keep the input costs low and sell milk for a higher price. And also few factors such as disease attacks are beyond your control.

What factors determine the price of a Murrah Buffalo?

Price of a Murrah buffalo depends on a variety of factors and varies from Rs 60,000 to Rs 1.3 Lakh as of 2017. I am listing few factors below which determine the price a buffalo:

  • Genetics: A Murrah Buffalo with a good heredity line is very costly.
  • Lactation Cycle: The lactation cycle also matters – usually second lactation buffaloes are preferred. A first lactation buffalo giving more milk will sell for higher price because it’s yield will be even more better in second lactation. A fourth lactation buffalo which gives the same milk as second will sell for a lesser price.
  • Milk Yield: The yield at the time of purchase and projected/recorded yield per lactation will affect the price.
  • Structure: The size, structure and shape of the buffalo also differentiates the price. A well built Murrah Buffalo with good height, heavy frame, good udder and tightly curved horn will sell for a higher price.
  • Time of purchase: The season of purchase also makes a difference – winters are cheaper as most animals give birth during that time and summer months are costlier as due to low supply of buffaloes and high demand for milk products such ice cream, butter milk, etc.
  • Place of purchase: The place of purchase also makes a difference (for instance the rates are usually high in Rohtak, Karnal and Hyderabad due to high demand for Murrah buffaloes).
  • Calf Gender: The price increases if the buffalo has a female calf. Also a male calf of high yielding buffalo with good genetic line will also go for a higher price.

You need to understand that Buffaloes are animals with unique characteristics and price vary on those characteristics. Overall you need experience to choose the right buffalo and to negotiate the price. If you are new dairy farming, it is better to take an experienced dairy farmer to purchase buffaloes.

All other questions with regard to Murrah buffaloes are explained at Murrah Buffalo Questions

Bharathi Dairy Farm supplies good quality Murrah buffaloes in south India. Check this link on why you should buy Murrah buffaloes from us.

Is dairy farming unethical?

I was asked this by one of my friend while discussing about dairy farming. We had a good discussion around it – so here is my take. It all depends on each individuals perspective. So before we go any further – let me clarify my point of view – Dairy farming is absolutely unethical.

  • Positives:
  • Dairy animals are provided good shelter.
  • They are provided chaffed green fodder.
  • They are provided balanced nutritious concentrate feed.
  • They are good veterinary care and medicines
  • Their calves are taken good care
  • Negatives:
  • Animals are confined to a small area and some of them are tied in the shed for years together.
  • We extract the milk which rightfully belongs to its calf.
  • Cows do not even get to mate a bull – most of them are artificially inseminated.
  • Male calves are sent to slaughtering after lactation ends.
  • Dairy animals don’t even die a natural death – all of them are slaughtered when they are not financially viable as a dairy animal

Conclusion: From the day they are born till the day they die almost all dairy animals live a controlled life to service the human needs. That’s true for all domesticated animals whether it is cow, buffalo, goat or a hen. The reason for this cruelty is not just the dairy farmer but all human beings because  milk, milk products, meat and leather products are part and parcel of every ones life.

Alternate View: In my personal opinion, our current human life is no different from a dairy animal. On the positive side – we drive good cars, live in big houses, use smart phones, wear good clothes, get good health care, eat more food than we can burn and provide good education to kids. On the negative side – we live most of our lives sitting in a  chair working on the laptop in an AC office in a job we dislike every single day till the day we retire to pay for all those EMIs. Are we not trapped in a life which looks shiny on the outside but hollow inside on greedy competition with each other. Are our lives cruel and unethical compared to our ancestors? – We screwed our lives and also every life around us – just think about it. This is the impact of western culture on us as well as our domestic animals.

How to start a dairy farm?

Lot of folks ask me on the steps to start a dairy farm. This post explains the process to successfully start a 30 buffalo farm.

Whether it is dairy farm or for that matter any venture – you need to get your basics right.

  • Before starting: You need to have a real desire and be passionate about what you wanted to do. This is especially important for starting a dairy farm because it is very labour intensive and requires lots of patience with little support from society. And also you need to discuss with your family and have the support from family.
  • Acquire Knowledge: Businesses are either inherited from parents or you work in that line and then start off on your own. But if you did not inherit or work in a farm – I suggest attend a training on dairy farming, visit both successful and failed farms and then work in a dairy farm for 1 month. By end of this exercise, you will understand if you really want to start a dairy farm.
  • Arrange Funds: You need to have the money to start the farm. Consider land, shed construction, farm equipment, grass cultivation, purchasing animals, etc. You can approach banks to get loans and there is also a subsidy from NABARD – but it’s not easy to get dairy loans from banks. To get a dairy loan, you need to prepare a dairy project report. Check this link for more details on how much it costs to start a 30 buffalo dairy farm.
  • Farm Location: If you don’t already own land, it will be almost financially nonviable to start a dairy farm as the land rates are very expensive. Farm location should ideally be within 10 kms distance from a town to easily sell the milk and by-products.
  • Dig a Bore well and get electric connections: You need a 3 phase bore well for irrigating the green grass in 4 acres and a single phase bore well for farm water use. If you have power cuts, then you need to small generator for running the single phase motor.
  • Start Construction: For a 30 buffalo farm, you need a shed (75 feet x 30 feet), 1 small calve shed, 2 worker rooms (12 feet x 10 feet), 1 dhana/feed room (12 feet x 10 feet), and a room for yourself (12 feet x 10 feet) .
  • Cultivate Green Fodder: For 30 buffaloes, you need to cultivate grass in 4 acres of green grass. If you good water source to irrigate then 3.5 acres should be enough. Basically each buffalo needs 25 kgs of green grass per day which means 750 kgs of grass per day for 30 buffaloes. In a year, you need 270 tons of grass (750 kgs x 365 days). You need to select the right type of fodder variety – i would suggest to go for a mix of APBN or C04 or C05 in 2 acres. ABPN/CO4/CO5 are propagated through slips and there are no seeds for this. They produce 80 to 90 tons of grass per acre in a year. The second variety can be multicut sorghum (COFS29 or COFS31) in 1 acre – these are propagated through seeds and can will last for 3 years and generates 70 to 80 tons per year. The variety can be a high protein variety like Hedge Lucerne which is propagated through seeds can generate 50 to 60 tons per year. Grass cultivation should be done 60 to 70 days prior to animals arrive at the farm. So this task should be taken up parallel to construction work.
  • Purchase Machinery and tools: You will need a chaff cutter, a brush cutter, a diesel power generator (if you have power cuts) and other tools such as milk cans, etc.
  • Procure Dry Fodder: You need to procure dry fodder (vari gaddi/kutti) for up to 1 year. The quantity will depend on the quality of the dry fodder. The prices are usually cheaper after paddy/maize harvest season and it will expensive in summer months. If it is a drought year, then also the price will be higher.
  • Milk sales tie-up: You should have already tied up with someone to directly sell the milk or give it to milk agency (pala kendram). Try to find a good buyer such as a hotel, sweet shop, coffee shop and direct consumers – direct selling will increase your profit. But do not supply for credit (appu/kadan) – many people tend to be very late on payments or cheat.
  • Hire Workers: This is one of the toughest things as the workers tend to leave without even informing. Make sure you have the right workers and you have backup plan to handle if they leave without notice. For every 10 buffaloes, you need 1 worker. If you are getting bihar workers, then you need at least 2 of them or else they will not stay. Make sure they are settled in farm before you go for purchasing buffaloes.
  • Purchase Animals: In our strategy, let’s buy buffaloes in 2 batches. In first batch, buy 19 murrah buffaloes and 1 bull. After 5 months, buy second batch of 10 buffaloes. We are buying 20 buffaloes in first batch because we have 2 bihar workers or else they will not stay and if we buy 10 buffaloes and have 2 workers you will lose money in salaries.  Purchasing a bull is a must in first batch. You would have already decided where to buy the Murrah buffaloes from – visit them at least once before you buy. If you are new to dairy farming, take an experienced dairy farmer with you when purchasing animals.
  • 1st Week: If the animals were purchased from far away distances – for instance if you had purchased it in haryana and transported it to Andhra – then they will take substantial time to recover from transportation stress. Calves would have died, loss of body weight and also undergo emotional stress as the climate, feed, workers are all different. Do veterinary check up as soon as they arrive. Wash 2 times a day. Feed good concentrate feed and mineral mixture. Give 20 kgs of chopped green fodder and 10 kgs of dry fodder. Give drinking water 3 times a day. Address all stress factors such as mosquitoes, unclean shed, avoid beating, avoid tying too close to each other, etc.
  • 3rd Week: You should have reached a stable state by 3rd week. Buffaloes should have regained weight and milk yield. Workers should be working in a clearly defined routine. Your total milk yield should be around 190 liters per day. Expect a failure of at least 1 buffalo – stopped giving milk because calf died or for whatever reason. You should consider yourself lucky if all of them are in stable state or unlucky if you have more than 1 failure.
  • 3rd Month: The milk yield will start to decline – it will be probably around 170 liters now. Start identifying heat and cross with bull as well as artificially inseminate with good semen – very very important task.
  • 5th Month: Now the milk yield will be around 140 liters. By now if 15 out of 19 buffaloes are pregnant again and have around 14 calves alive then you should consider yourself a success and will survive in this business. Now it is time to purchase second batch of 10 more buffaloes and add 1 more bihar worker. On the other hand, if you have drastic drop in milk yield, if most of your buffaloes are not pregnant, have serious worker problems, then it is time to evaluate, if you want to quit because you will be heavily losing money by feeding dry buffaloes.
  • 6th Month: Now the milk yield should be around 220 liters (120 from first batch of 19 and 100 liters from second batch of 10). Now all of the 19 buffaloes from first batch should be pregnant – if any buffalo is not pregnant then check for reproductive issues and start giving medicines. Now explore the option of making small batches of by-products such as ghee, khoa or paneer and directly sell it to sweet shops and hotels.
  • 8th Month: Now the milk yield should be around 170 liters (90 from first batch and 80 from second batch). Now you should start observing heat for second batch and crossing them with bull as well as artificially inseminate them. If you still have any dry animal which is not pregnant from first batch, you should sell it (mostly for half the price) and buy a new buffalo.
  • 11 month: Now the yield will be around 70 liters (10 liters from first batch and 60 liters from second batch). By now all of your second batch buffaloes should also be pregnant. From 11th to 13th months will be very tough because the all of the buffaloes are in early to late pregnancies. You need to be prepared for out of pocket expenses during this period as you have large herd with low milk output.
  • 13th Month: Basically you are into second year of operation. Now most of your of first batch of buffaloes should have given birth again and started yielding milk. And also second batch will nearing end of lactation and should be in mid-pregnancies. From now on, you should strive for a balance of 20-22 buffaloes in yielding phase and 8–10 buffaloes in dry period. This balance will allow to maintain a milk yield of around 200 liters. You also need to evaluate your calves – you need to retain all female calves and get rid of male calves unless if it has breeding potential as a bull.
  • Yearly Income and Expenses: One of the biggest yearly income is sale of manure/dung – a truck load sells for around Rs 2,500. With 30 buffaloes and 20 calves, you will get around 40 trucks of dung which will generate an income of 1 lakh. The same amount needs to be spent on purchasing dry fodder for the entire year.

Colostrum and its importance

Colustrum is the milk the buffalo gives immediately after giving birth to a calf. In telugu, it is called junnupalu (జున్ను పాలు), in tamil – seempaal (சீம்பால்), in kannada – ginnu and in hindi – खीस/नवदुग्ध. The buffalo gives colustrum for up to 4 days after delivery.

Colostrum is the most important and most suitable feed for the newborn calf.  It contains all the nutrients needed along with the vital antibodies. Unfortunately, most dairy farmers use it for making a sweet named Junnu or give it away free to neighbours or some even discard/trash the excess Colostrum milk. Since newborn calf immune system is not developed, it is important for the calf to drink as much colustrum as posssible at regular intervals.

Colustrum is very thick and contains approximately 25% solids, compared to 15% solids in normal buffalo milk.  Colostrum contains antibodies or immunoglobulins (essential proteins) necessary to provide the calf with protection from disease. Much of the extra solid material in colostrum is immunoglobulin, but colostrum is also an important source of protein, sugar, fat, and vitamins A and E.

It is crucial for the survival of the calf that it receives colostrum during the first 6 hours of its life, the earlier the better. The calves should be given colostrum as long as the mother provides it, e.g. three to five days. A calf should receive 5 to 6 % of its body weight as colostrum within the first six hours of life, and another 5 to 6% of its body weight when the calf is 12 hours old.  Colostrum should be fed to the calf several times a day, preferably more than twice a day, at equal intervals.

Surplus colostrum can be stored in fridge and can be given to the calf when required. Use a clean container to store the colustrum in fridge and when feeding, keep the container in room temperature for 30 minutes and then feed it to the calf. If the colustrum was frozen, soak it in warm water before feeding. Never boil the colustrum as it will it destroy the anti-bodies which is required for the calf.

To summarize, feeding colustrum to newborn calf is very important for the survival of the calf. Do not make sweets or waste colostrum. Store excess colustrum in fridge and feed it to the calf as long as possible.


Gliricidia – The multi-purpose fodder plant


Gliricidia is a small fast growing multi-purpose legume plant. It is deciduous and thornless plant. It grows up to a height of 10-15 meters.

Fodder Characteristics

Gliricidia leaves contain between 25 to 30% crude protein and are highly digestible for ruminants like buffalos, cows and goat.  Few animals seem to refuse leaves on the basis of smell, often rejecting them without tasting. In such situations, introduce smaller portions of Gliricidia mixed with other chaffed fodder and also add Salt and Jaggery while chaffing.

Soil and Climate Suitability

Gliricidia tolerates a wide range of soil and climatic conditions. Growth is most rapid in regions where annual rainfall exceeds 900 mm, but it will grow where rainfall is as low as 400 mm per annum. But it does not tolerate frost conditions. It grows in soils ranging from heavy clays to sands and on rocky eroded sites; however, it is intolerant of water logging.

Grow on Farm Bunds

Gliricidia plants are usually planted on the farm bunds. Planting these on farm bunds has the following advantages:

  • No need of extra land and optimal use of farm bunds.
  • Gliricidia stops soil erosion and water run-off.
  • Since Gliricidia is a legume – it generates nitrogen and enriches soil and thereby increasing the productivity of other crops.

Planting Method

Gliricidia can be planted either through seeds or stem cuttings. When using seeds, it is better to raise the seeds in poly-bags. Soak the seeds overnight before planting them. Almost all seeds will germinate within a week. They can be planted in the fields or farm bunds after 6 to 8 weeks. (Note:  We supply Gliricidia seeds and saplings at very nominal price)

Gliricidia can also be propagated/established from cuttings. Cuttings should be of mature branches (>7 cm in diameter), which are brownish-green in bark color. The cutting is normally made obliquely at both ends, discarding the younger tips, and the base inserted 20-50 cm into the soil.

For gliricidia grown in the humid tropics and used only for forage, a cutting interval of 5-8 weeks is usually recommended. It is able to produce profuse branching and fresh growth after every cutting.

Other Purposes

Gliciridia can be used as green manure.  If cultivated along the border in one acre, it will supply enough green leaf manure for 2 acres of land. This can also used as input material for vermi-composting. Gliricidia also fixes atmospheric nitrogen and thereby improves soil fertility.


There is evidence of increased milk and meat production when Gliricidia is used as a supplemental fodder because of it’s high protein content. And also this can be very helpful in increasing soil fertility. So, it would be a good idea to plant Gliricidia on the farms bunds.

Visit to a buffalo farm in USA

Last week, I was visiting my relatives in California and was checking the places to visit near San Francisco. We visited usual places such as the Napa Valley, Golden Gate, etc and luckily, I was also able to visit a buffalo farm as well.

Ramini Mozzarella Water Buffalo Farm

This farm had a very interesting story. This farm was started by a person named Ramini. He was an IT professional working in the silicon valley and when he turned 50 – while evaluating his professional life – it seems he decided to do something else other than IT for the rest of his life. So that’s when he decided to start a dairy farm.

Italian, Mozzarella, Buffalo and Fate

Ramini’s family is of Italian descendant and Italians love real Mozzarella (mozzarella di bufala) cheese. And original mozzarella di bufala cheese is only made from Buffalo milk. And in US, there are no water buffalo’s, so they make mozzarella from cow’s milk or export it from Italy which is stale by the time it reaches US. So Ramini decided that he will raise buffalo’s in US and make fresh mozzarella di bufala using buffalo milk. The challenges were many – he did not have farming experience, good quality buffalo’s were not available in US and most importantly he did not know how to make mozzarella di bufala. So he spent years raising his herd and mastering the mozzarella di bufala cheese making process. Sadly, that’s when he had cancer and passed away. Now the farm is run by his wife, Audrey, with lots of support from locals and well wishers. She is now making profit and increased the herd size to 50. Probably, she is the largest water buffalo dairy farmer in US.

Farm Visit

Ramini’s farm can be visited on every Saturday – the fee is $25 per person and the tour starts at 4 PM. Local visitors were very excited to see the buffalo’s and touch the calves.

For more details – check

Important Lesson

I met Cale who assists Audrey in the farm. He recently graduated in agriculture from University of California. He is learning dairy farming by working in the Ramini farm and was doing every work in the farm. In US, the system is that new dairy farmers work in a farm and also slowly build their herd with the owner and when they are ready, they move out to their own farm with their herd and the knowledge. This is a fantastic approach and was wondering why this can’t be followed in India – this will give the knowledge and confidence and also eliminates the risk in starting a dairy farm.

Pictures from the visit


Government Subsidies for Dairy Farming


Subsidy is a form of financial support from government to promote dairy farming in India. The primary capital subsidy is from central government which is managed through NABARD. State governments also provide support through subsidized fodder seeds, medicines, equipment, vetinery services, etc but state governments usually do not provide financial support.


NABARD stands for National Bank for Agriculture and Rural Development. Though NABARD is a bank, it usually does not directly deal with customers – it coordinates with other banks and co-operatives to deliver services. Central government allocates dairy subsidy amount in yearly budget to NABARD and NABARD works with other banks to distribute this amount to farmers.

Dairy Entrepreneurship Development Scheme (DEDS)

DEDS is a central government subsidy to promote dairy farms. The objectives of the scheme are as follows:

  • To promote setting up of modern dairy farms for production of clean milk
  • To encourage heifer calf rearing thereby conserve good breeding stock
  • To bring structural changes in the unorganized sector so that initial processing of milk can be taken up at the village level itself.
  • To bring about upgradation of quality and traditional technology to handle milk on a commercial scale
  • To generate self employment and provide infrastructure mainly for unorganized sector.

Who is Eligible for DEDS Subsidy?

  • Farmers,  individual entrepreneurs, NGOs, companies , groups of unorgainsed and organized sector etc. Groups of organized sector include self help groups, dairy cooperative societies, milk unions , milk federations etc.
  • An individual will be eligible to avail assistance for all the components under the scheme but only once for each component
  • More than one member of a family can be assisted under the scheme provided they set up separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 500m.


The following are the subsidies through DEDS:

S.No Component Unit Cost Pattern of Assistance
1 Establishment of small dairy units with crossbred cows/ indigenous descript milch cows like Sahiwal, Red Sindhi, Gir, Rathi  etc / graded buffaloes   upto 10 animals Rs 5.00 lakh for 10 animal unit – minimum unit size is 2 animals with an upper limit of 10 animals. 25% of the outlay (33 .33 % for SC / ST farmers, ) as back ended capital subsidy subject to a ceiling of Rs 1.25 lakh for a unit of 10 animals ( Rs 1.67 lakh for SC/ST farmers,). Maximum permissible capital subsidy is Rs 25000 ( Rs 33,300 for SC/ST farmers )for a 2 animal unit. Subsidy shall be restricted on a prorata basis depending on the unit size
2 Rearing of heifer calves – cross bred, indigenous descript milch breeds of cattle and of graded buffaloes – upto 20 calves Rs 4.80 lakh for 20 calf unit  -minimum unit size of 5 calves with an upper limit of  20 calves 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 1.20 lakh for a unit of 20 calves ( Rs 1.60 lakh for SC/ST farmers). Maximum permissible capital subsidy is Rs 30,000 ( Rs 40,000 for SC/ST farmers) for a 5 calf unit. Subsidy shall be restricted on a prorata basis depending on the unit size
3 Vericompost (with milch animal unit .To be considered with milch animals and not separately ) Rs 20,000/- 25% of the outlay (33.33 % for SC / ST farmers)as back ended capital subsidy subject to a ceiling of Rs 5,000/- ( Rs 6700/- for SC/ST farmers,).
4 Purchase of milking machines /milkotesters/bulk milk cooling units (upto 2000 lit capacity) Rs 18 lakh 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 4.50 lakh ( Rs 6.00 lakh for SC/ST farmers).
5 Purchase of dairy processing equipment for manufacture of indigenous milk products Rs 12 lakh 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 3.00 lakh ( Rs 4.00 lakh for SC/ST farmers).
6 Establishment of dairy product transportation facilities and cold chain Rs 24 lakh 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 6.00 lakh ( Rs 8.00 lakh for SC/ST farmers).
7 Cold storage facilities for milk and milk products Rs 30 lakh 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 7.50 lakh ( Rs 10.00 lakh for SC/ST farmers).
8 Establishment of private veterinary clinics Rs 2.40 lakh for mobile clinic and Rs 1.80 Lakh for stationary clinic. 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 60,000/- and Rs 45,000/- ( Rs 80,000/- and Rs 60,000/-  for SC/ST farmers) respectively for  mobile and stationary clinics
9 Dairy marketing outlet / Dairy parlour Rs 56,000/- 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 14,000/-( Rs 18600/- for SC/ST farmers).

How to apply for the Subsidy?

The entrepreneurs shall apply to their banks for sanction of the project. The bank shall appraise the project as per their norms and if found eligible, sanction the total outlay excluding the margin, as the bank loan. The loan amount is then disbursed in suitable installments depending on the progress of the unit. After the disbursement of first installment of the loan, the bank shall apply to the concerned Regional Office of NABARD for sanction and release of subsidy.

Basically, you need to approach your local bank and apply for dairy loan. Bank will process the loan application like any other loan. You might need to submit the project report and you would need to pledge property as security depending on the loan amount. Most banks are trying to avoid dairy loans as many dairy farmers are not able to repay their loans.

One more thing to remember, this subsidy is available as first-come first-serve basis. This means when you apply the loan, the subsidy amount should still be available for that year. It is better to check with your Bank manager rather than assuming that you will get subsidy. Generally, subsidy will be available in the beginning of the financial year ie from April.

What is a back-end subsidy?

Though NABARD will release the subsidy to the bank but it will not be count against your loan. If you barrowed 10 lakhs and subsidy is 2 lakhs – the subsidy amount will be added only after you repay 8 lakhs. This basically means you have to repay your portion first.


Though the government provides support, it is a bit challenging to avail those benefits.