Animal Husbandry Dairy Farming

1. Introduction Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gobar gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. 2. Scope for Dairy Farming and its National Importance. The total milk production in the country for the year 2008-09 was estimated at 108.5 million metric tonnes and the demand is expected to be 180 million tonnes by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5% . Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming. 3.Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1. Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial bank, regional rural bank or co-operative bank in their area in the prescribed application form which is available in the branches of financing banks. 3.2. For dairy schemes with very large outlays, detailed project reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Cost towards land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. 4.Scheme Formulation for bank loan 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Co-operative Society / Union / Federation / commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies, if existing in the villages would provide all supporting facilities particularly for marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodder, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State Government, dairy society/union/federation. 4.3 The scheme should also include information on the number and types of animals to be purchased, their

Availability of Green/dry fodder. Based on this.2 Margin Money: Margin depends on the category of the borrowers and range from 5 to 25%. A model project with 10 buffaloes is given as Annexure II. The end use of the funds is verified and constant follow-up is done by the bank. profit and loss statement. (B) Economic Viability . The bank will then examine the scheme for its technical feasibility and economic viability. 3.Sanction of Bank Loan and its Disbursement. Other documents such as loan application form. Availability of training facilities. 6. 5. However. the total cost of the project. the scheme is sanctioned by the bank.Availability of good grazing ground/lands. gunny bags. 6.Lending terms .breed. Unit Cost 2. veterinary aid. for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p. A format developed for formulation of project report for a dairy farm is given as Annexure I. Nearness of the selected area to veterinary. 7. Availability of good quality animals in nearby livestock market 3. Prevailing market prices may be considered to arrive at the outlay. margin money requirements etc.5 Repayment period of loan Repayment period depends upon the gross surplus in the scheme. income. margin money to be provided by the beneficiary.e.Cash flow analysis. cost and other relevant input and output costs with their description.General 7.this would briefly include 1.3 Interest Rate for ultimate borrower : Banks are free to decide the rates of interest within the overall guidelines. The loan will be repaid in suitable monthly/quarterly instalments usually within a period of five to seven years. other miscellaneous items etc. production performance. purchase of equipments and machinery. can be worked out and shown in the Project report. are also examined.1Outlay Outlay of the project depends on the local conditions. sale price of milk. labour and other overheads. 2. 5. 6. repayment of principal loan amount and interest).4 Security Security will be as per NABARD/RBI guidelines issued from time to time. 5. The bank's officer can assist in preparation of the scheme or filling in the prescribed application form. 7. requirement of bank loan. male/female calves. etc. Repayment schedule (i. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme.6Insurance The animals and capital assets may be insured annually or on long term master policy. unit size and the components included in the project. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated. estimated annual expenditure. (A) Technical Feasibility . insurance. breeding of animals.Output costs i. concentrate feed. 7.Scrutiny of Schemes by banks. 4. The scheme so formulated should be submitted to the nearest branch of the bank. where ever it is applicable. . manure. 7. 7.this would briefly include 1.Income-expenditure statement and annual gross surplus.e. repayment period. Input cost for feed and fodder. security aspects. purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. After ensuring technical feasibility and economic viability. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds. breeding and milk collection centre and the financing bank's branch.a. 7. 4. medicines etc.Availability of veterinary aid / breeding centres and milk marketing facilities near the scheme area.

Heifers (1-3 years) .Adults .Store room .Sheds .Quarters.) vi) Cost of animal (Rs. per day) iii) Lactation days . fencing. Land and Land Development : i) Location details of the project ii) Total Area of land and its cost iii) Site map iv) Particulars of land development.Calves (less than 1 year) e) Animals : i) Proposed species ii) Proposed breed iii) Source of purchase iv) Place of purchase v) Distance (km. b) Civil Structures : Detailed cost estimates along with measurements of various civil structures .Annexure I FORMAT FOR PROJECT REPORT PREPARATION . gates.Milk room . c) Equipment/Plant and Machinery : i) Chaff cutter ii) Silo pit iii) Milking machine iv) Feed grinder and mixer v) Milking pails/milk cans vi) Biogas plant vii) Bulk coolers viii)Equipment for manufacture of products ix) Truck/van (price quotations for the above equipments) d) Housing : i) Type of housing ii) Area requirement .DAIRY FARM 1. GENERAL i) Nature and objectives of the proposed scheme ii) Details of proposed investments iii) Specification of the project area iv) Name of the financing bank branch v) Status of beneficiary: (individual/Partnership/Company/Corporation/Co-operative Society / Others) vi) Details of borrowers profile (a) Capability (b) Experience (c) Financial Soundness (d) Technical/Other special Qualifications (e) Technical/Managerial Staff and adequacy thereof 2. etc. TECHNICAL ASPECTS : a) Location.) f) Production parameters : i) Order of lactation ii) Milk yield (ltrs. etc.

) iv) Availability of labour and other staff v) Types of facilities available vi) If own arrangements are made a) Employed a veterinary doctor/stockman/consultant b) Periodicity of visit c) Amount paid/visit (Rs.Kharif .Concentrates ii) Fodder crop rotations .Green fodder . cleaning and fodder production iv) If investment has to be made.Rabi .iv) Dry days v) Conception rate vi) Mortality(%) .) : iv) Availability of semen : v) Availability of staff : vi) Expenditure per animal/year j) Veterinary Aid : i) Source ii) Location iii) Distance (km.Summer iii) Fodder cultivation expenses iv) Requirement and costs : Quantity required (kg. type of structure. / Kg) Green Fodder Dry Fodder Concentrates i) Breeding Facilities : i) Source : ii) Location : iii) Distance (km.Dry fodder .Adults .) k) Electricity : i) Source ii) Approval from SEB iii) Connected load iv) Problems of power failure v) Arrangements for generator l) Water : i) Source ii) Quality of water iii) Availability of sufficient quantity for drinking.Young stock g) Herd projection (with all assumptions) : h) Feeding : i) Source of fodder and feed . design and cost m) Marketing of milk : i) Source of sales Lactation Dry Period Young Stock .) vii)Expenditure per animal per year (Rs./day) Cost(Rs.

) Particulars : a) Internal Rate of Return (IRR) : b) Benefit Cost Ratio (BCR) : c) Net Present Worth (NPW) : iv) Financial position of the borrowers (to be furnished in case of corporate bodies/partnership firms) a) Profitability Ratio : i) GP Ratio ii) NP Ratio b) Debt Equity Ratio : c) Whether Income Tax & other tax obligations are paid upto date : d) Whether audit is upto date (enclose copies of audited financial statements for the last three years) v) Lending Terms : i) Rate of Interest : ii) Grace Period : iii) Repayment Period : iv) Nature of Security : . if any : 3.) o) Beneficiary's experience : p) Comments on technical feasibility : q) Government restrictions.place of sale .Qty. No.age .) iv) Price realised .Cost/bag (Rs.) Total Capital Costs(A) Recurring Costs Total Recurring Costs (B) Total Project Cost (A+B) ii) Down payment/margin/subsidy (Indicate source & extent of subsidy): iii) Financial viability (comment on the cash flow projection on a farm model/unit and enclose the same.price expected ii) Manure . per liter of milk) v) Basis of payment vi) Periodicity of payment n) Marketing of other products : i) Animal . FINANCIAL ASPECTS : i) Project Cost Sr.(Rs. Capital Costs Item Physical Unit and Specification Cost (Rs.) iii) Empty gunny bags ./animal Price/unit (Rs.ii) Place of disposal iii) Distance (km.Number .

if so amount per unit f) Arrangements for supply of green fodder and cattle feed Model Unit Cost and Economics of a 10 Buffalo Unit A. : 330000 : 60000 : 20000 : 50000 : 10000 : 470000 : 4800 : 9000 : 16000 : 29800 : 499800 : 500000 : 75000 : 425000 .Periodicity .Rate of premium e) Whether any subsidy is available. INFRASTRUCTURAL FACILITIES : a) Availability of technical staff with bank/implementing authority for monitoring b) Details of i) technical guidance ii) training facilities iii) Govt.v) Availability of Government guarantee wherever necessary : 4./acre/season) Insurance premium (% per annum) Veterinary aid/animal/ year (Rs.) Cost of chaff cutter (power operated) (Rs.) Cost of concentrate feed (Rs.) Cost of equipment per animal (Rs. of Animals Cost of Animal (Rs./kg) : Graded Murrah Buffalo : 10 : 32000 : 1000 : 8 : 60 : 20 : 100 : 50000 : 1000 : 4500 : 5 : 250 : 8 Rs./animal) Transportation Cost/Animal Average Milk Yield (litre/day) Floor space (sqft) per adult animal Floor space (sqft) per calf Cost of construction per sqft (Rs. support /extension support c) Tie-up arrangements with marketing agencies for loan recovery d) Insurance .Type of policy . Project Cost Cost of milch animals including transportation cost Cost of construction of shed for adult animals Cost of construction of shed for calves Cost of chaff cutter Cost of equipment Capital cost Cost of concentrate feed for first batch for first month Cost of fodder cultivation in 2 acres Insurance of first batch of milch animals Recurring cost Total cost or say Margin (15%) Bank Loan B. Techno economic parameters Type of Animal No.) Cost of fodder cultivation (Rs.

00 6.50 4 25 4 Qty./kg) Sale price of gunny bags (Rs. of labourers Salary of labourer per month (Rs.Cost of dry fodder (Rs.00 38. Feeding Schedule Per Day Lactation Price (Rs.) Margin (%) Rate of interest (%) Repayment period (years) Selling price of milk/litre (Rs.00 7. Economics Particulars 1 Sale of Milk Sale of Gunny bags Total Cost of feeding during lactation Cost of feeding during dry period Cost of fodder cultivation Veterinary aid and breeding charges 277200 1710 278910 79800 9690 18000 2500 2 320100 2080 322180 92150 18990 18000 2500 3 320100 2080 322180 92150 18990 18000 2500 Years 4 293700 1960 295660 84550 22090 18000 2500 5 290400 1950 292350 83600 22480 18000 2500 6 320100 2000 322100 92150 18990 18000 2500 7 320100 1950 322050 92150 16660 18000 2500 1 2100 625 171 2 2425 1225 208 3 2425 1225 208 4 2425 1425 196 5 2200 1450 195 6 2425 1225 200 7 2425 1075 195 8. (kg) Cost Per Day (Rs. per bag) Lactation days Dry days : 1.50 .) Cost of electricity and water/animal/year (Rs.50 : 10 : 270 : 150 y y y Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months.50 15.00 0. Fodder cultivation considered in two acres and working capital for one crop / season considered.00 0.50 : 1 : 3000 : 150 : 15 : 12 : 7 : 16.) Concentrate Feed Green Fodder Dry Fodder Total Lactation Chart Years Lactation Days Dry Days Gunny Bags available for sale C.) 32. (kg) Dry Cost Per Day (Rs.) 8. Manure utilised for fodder cultivation.00 Home grown 1. Cost of rearing calves not considered as it will be nullified by their sale value or retention value. Two crops considered per year.00 1 20 5 Qty./kg) No.

Ratio I.8 1.. Repayment schedule Year 1 2 3 4 5 6 7 Loan Outstanding 425000 373800 322756 265587 216957 164392 88219 470000 162740 632740 278910 -353830 1153513 1272701 119187.R.R. charges Insurance charges Total Surplus D.Labour charges Electricity and misc..66 36000 750 16000 162740 145970 36000 1500 16000 185140 137040 36000 1500 16000 185140 137040 36000 1500 16000 180640 115020 36000 1500 16000 180080 112270 36000 1500 16000 185140 136960 36000 1500 16000 182810 139240 2 185140 185140 322180 137040 3 185140 185140 322180 137040 4 180640 180640 295660 115020 5 180080 180080 292350 112270 6 185140 185140 322100 136960 7 182810 182810 322050 139240 Gross Surplus 145970 137040 137040 115020 112270 136960 139240 Interest 51000 44856 38731 31870 26035 19727 10586 Principal 51200 51044 57169 48630 52565 76173 88219 Total Repayment 102200 95900 95900 80500 78600 95900 98805 Surplus 43770 41140 41140 34520 33670 41060 40435 How safe is the Dairy Business?   y y y y y y How safe is the dairy business? Starting the Dairy farm.C. Calculation of BCR and IRR 1 Capital Costs Recurring Cost Total Costs Benefit Net Benefit PW Costs @ 15% PW Benefits @ 15% NPW B. Selecting the animal (Cows v/s Buffaloes) arious Breeds Infrastructure and Manpower requirements Sample Project Report .10 : 1 28. (%) E.

Decomposed slurry of such plant can also be effectively used as organic manure.) Entire establishment can be shifted to a new location (if need arises e. You need not have to rely much on others experience. which depends upon various factors. Less energy requirement. Starting the Farm . reliable and alert manager. y Opportunities for training are available with most of the: o Agricultural/Veterinary Universities of various states o Krishi Vigyan Kendras . Develop interest and study feed and fodder's market in your region.g. y One needs to decide first on the aims and objective of the farm. Visit the cattle market occasionally. y y y y y y Getting some initial professional training.heard health and lack of quality control in various stage of production can cause major loss affecting the profitability of the entire venture. Requirement of skilled labour is relatively less.Dairy farming is a safe business for the following reasons: y y y y y y y It is eco-friendly and does not cause environmental pollution as compared to other industries. Observe animals on sale and talk with persons engaged with purchasing of animals. (No need to to stock raw materials in huge quantities. Biogas plant fed with cow dung can supply maximum energy to meet farms day to day requirement. You need to choose hardworking reliable persons preferably with some experience. Read magazines on Dairy Industry and keep yourself informed. Limitations and Constraints: y y y Breeding of animals and getting expected milk yield is a biological phenomenon. analyze every event logically and if needed consult with local Veterinarians for more information.. usually persons from the family take the responsibility.. Every year there should be a progressive aim for breeding ( including number of animals to be maintained) and production. look for opportunities to work for an existing farm for a minimum period of six months.How to begin. You can visit dairy farms that run on commercial basis and have a discussion with experienced farm owners. Floods etc. If you plan to manage the farm on your own. Dairy product market is active round the year. Dairy farming besides good planning requires hardworking. You can also train them for specific jobs. Minimum investment on inventory.. Inadequate management of feeding .) One can insure animals. In India. Fire.. Manage a good team of labourers. its difficulties in relation to seasons.

15. Buffaloes Cows y Good quality cows are available in the market and it cost around Rs.12. Buffalo milk is also preferred for making tea.Cows v/s. Male calves fetch little value. They are more docile and can be handled easily. Buffaloes need cooling facility e. Buffaloes y In India. Conduct a through study of the immediate market where you are planning to market your milk You can mix milk from both type of animals and sold as per need of the market. a welcoming drink in common Indian household. Buffalo milk has more demand for making butter and butter oil (Ghee). The fat percentage of cow's milk varies from 3-5. Cost of a cow producing 10 liter of Milk per day will be between Rs.o y State Department of Animal Husbandry You can also choose to inquire with National level organization like: National Dairy Research Institute (NDRI) Karnal (Haryana) . We suggest you to go for a commercial farm of mixed type. as fat percentage in milk is higher then cow. y y y y y y y A suggestion to help you in deciding the animal to farm with: Middle class health-conscious Indian families prefer low fat milk for consumption as liquid milk. Buffaloes largely mature late and give birth to calves at 16 to 18 months interval. cows breed regularly giving one calf every 13-14 month interval. Good milk yielding cross breeds (Holstein and Jersey crosses) has well adapted to Indian climate. Buffaloes can be maintained on more fibrous crop residues. (Cross breed. hence scope for reducing feed cost. If proper care is given. Alternately. you can also look for training facilities of non-governmental organizations that are active in farming sectors. we have good buffalo breeds like Murrah and Mehsana.g.For training on rearing of dairy animals and manufacture of milk products. . sanitariums prefer cow's milk.000 to Rs.1500 per liter of milk production per day.5% and is lower then Buffaloes. Hotels and some general customers (can be around 30%) prefer pure buffalo milk. Hospitals. which are suitable for commercial dairy farm.1200 to Rs.000).g. (e. cows and buffaloes kept in separate rows under one shed). Wallowing tank or showers / foggers with fan. y Selecting the animal to farm with .

After this however. Economic life of buffaloes is 5-6 lactation and that of Crossbreed cows is 6-7 lactation. of Lucerne and 400 kgs. 4. Ideal space requirement for 100 animals is 13. Water tank capable of storing minimum 2000 liters Bore well with capacity to fill water tank in 1 hr Total land requirement for a unit of 20 animals can be sited as 3000 sq. 10 buffaloes) this strength can easily go up to 100 animals in proportion of 50:50 or 40:60. and Nali .Ravi and Badhawari. One room 10''x 12'' for milk storage Office cum living room of suitable size.ft open space. you can make contractual arrangements for getting an assured supply of 300 kgs.) The economics of whole dairy animal management depends upon its economic feeding.000 sq. 2.What are the various breeds? What is the economic life of animals? Popular buffalo milch breeds are Murrah.000 to 15. (One acre of green fodder cultivation for every five animals is required as a thumb rule. you need to review your strength and market potential before you chose to go for expansion. Sahiwal. The minimum economic size to go with? Under Indian condition a commercial dairy farm should consist of minimum 20 animals (10 cows. One room 10'' x 10'' for keeping implements.ft. Red Sindhi and Tharparkar.ft (120" x 125''). Jersey and Brown Swiss.ft in shed and 80sq. However. you will also need: 1. Besides. of maize fodder per day. 5. Surti. as the strength of you farm will go up to 100 animals. For 20 animals initially. in long run. There should be space for expansion. The strength of labourers in your farm can vary with number of animals usually the thumb . The indigenous milch breeds of cattle are Gir. By making fodder's like Lucerne or Berseem available for your animals you can reduced cost on feeding concentrate feed. 3. The exotic breeds of cattle are Holstein Friesian. It is advisable that you should go for a lease land of 15 to 20 acres with irrigation facility to cultivate green fodder for your animals. A glance at the Infrastructure and Manpower requirements The space required per animal should be 40 sq. Jaffrabadi. Mehasani.

. Due credit will be given to the source. Statewise Major Service providers for dairy farmers (including farmer's organizations. We invite learned visitors of our website to contribute information in this regard. Cattle Markets in India 2.rule is one labour for every 10 animals on milk or 20 dry animals or 20 young stock.com An Appeal For the benefit of entrepreneurs.Animal Dairy Unit to download a sample Project Report on Animal Dairy units. Do you want to add any information to above article? Click here Contact us at vethelp@vethelplineindia. if any). the VET Helpline team is currently working for preparing a comprehensive list of: 1. Sample Project Report .

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