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Nabard scheme for mini dairies in AP

Ch. Prashanth Reddy

HYDERABAD, Feb. 25

THE National Bank for Agriculture and Rural Development (Nabard) has introduced a scheme for the establishment of mini dairy units in Chittoor and Guntur districts of Andhra Pradesh. The bank has earmarked Rs. 7 crores for this purpose in the current fis cal.

The scheme proposes to finance 1,000 mini dairy units in Chittoor district alone. It was envisaged to finance 400 units of four animal dairy plants and 100 units of 10 animal dairy plants in 1999-2000 and an equal number of units in 2000-01.

Out of an estimated financial outlay of Rs. 7.92 crores for 1,000 units, the bank would finance to the tune of Rs. 5.94 crores.

According to a Nabard's study, Chittoor district, with an estimated cross-bred cow population of 3.82 lakhs and milk processing capacity of six lakh litres per day, offers good scope for dairy development. The climate of the district and its proximity to cities such as Chennai and Bangalore provides the favorable atmosphere for rearing cross-bred cows (CBCs).

The study states that the capital cost of a 10 CBC dairy unit will be Rs. 1.55 lakhs. Of this, the bank will extend a loan of Rs. 1.16 lakhs which is repayable in five years. In a period of six years, it is estimated, the unit earns a net income of Rs. 1 .31 lakhs after repayment of the loan and the interest charges.

Added to this is the residual value of sheds and other civil structures, equipment and animals which is estimated at Rs. 65,000.

As per the estimates of the scheme, the internal rate of return is 57 per cent, while the benefit cost ratio works out to 1.26:1. The cost of milk production is estimated at Rs. 4 per litre, while the sale price is expected to be on the average Rs. 6.75 per litre. Income from the sale of manure is estimated at Rs. 27,600.

Under the scheme, villages in the milk route of diaries and those nearer to towns where milk can be sold at remunerative prices will be selected. In order to ensure continuous availability of fodder to the unit, only farmers having cultivable surplus at least half-an-acre in case of four animal units and 1.25 acres in case of 10 animal units are eligible.

Apart from the Chittoor Milk Union, there are eight private milk processing plants in the Chittoor district. While the milk union is handling one lakh litres per day (lpd), the private diaries are handling 2.5 lakh lpd. Thus, a total of 3.5 lakh lpd is b eing processed as against a production of 8.39 lakh lpd in the district.

Among the private diaries in the district, Heritage Foods India Ltd is the largest which has a processing capacity of one lakh lpd. The company is further expanding its processing capacity to 1.25 lakh lpd.

The Nabard study states that the presence of private diaries has improved milk sales in the district. However, in flush season, the production was more and the sale of surplus milk is still a problem.