Dairy Farming Business Plan

Business plan is all about developing an overall aim and mission for any particular business. Preparing a business plan for a dairy farming business makes its management easy and quick, moreover helps in procuring grants, subsidies, or even business loans for doing business. With the help of a written dairy farming business plan, entrepreneurs shall set short- and long-term targets for at least five years.

Opening a dairy farm, often termed an “All Season” business has always been a lucrative idea for numerous business owners, as a fact that there will be never-ending demand for milk in India and anywhere in the world. India’s milk production is an increase by 3% – 4% every year. Due to this, the dairy farming business is evolving into a successful business ride for entrepreneurs.

Creating Dairy Farming Business Plan

Dairy Farming business plan should consist of various components that are as follows:

Introduction: Describing the nature of business, purpose, key issues, basic business details, and financial summary (for existing businesses). The financial summary should hold basic data information related to consolidated gross revenue and net worth, net farm income, cash flow, current ratio, working capital, etc.

Mission Statement: Business mission in which this business can produce the best quality milk or dairy products at affordable or best prices for its customers.

Farm Location and History: The business plan should consist of information related to the proposed farm location with a specified area, city, and state. The plan should also hold details of acres owned or rented with lease terms.

Cattle and Farm Machinery/Equipment: Information on the total number of cattle to be used in the dairy farming business and the number and types of machinery and equipment purchased with names and bills to be presented.

Proposed Business Ideas and Marketing Strategies: Plan should contain all the information regarding various commercials, business proposals, marketing strategies, new ventures to be undertaken, brand campaigns, etc.

Implementation Plan Summary: Plan summary should depict business plans for implementing new and improved management practices with anticipated timelines for completion.

Goal projection of next five years, description year-by-year with realistic information with necessary details of all the licenses and permissions required to start a dairy farming business in India.

Tips to Start Your own Dairy Farming Business

Further, let’s gain some important information regarding several steps involved in starting a dairy farming business. There are 8 important tasks to undertake before starting a dairy farming business that is as follows:

• Consulting with experts/professionals and market leaders
• Performing thorough business research
• Planning healthy infrastructure for animals
• Generating feeding and waste management program
• Obtaining licenses from concerned authorities
• Getting funds or availing business loans
• Finalizing a name for your business
• Getting your business registered as a Company or an MSME

To start a dairy farming business (if small-scale venture), entrepreneurs need to opt for lesser cows or buffaloes at the initial stages. At later stages, the number of cattle can be increased, depending upon the demand.

The business owner needs to require a company registration certificate by registering his/her firm as a sole proprietorship, partnership, private limited, public limited, limited liability partnership, NGO, etc.

Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs

Bank/NBFCs	Interest Rate
Axis Bank	10.75% p.a. onwards
Flexiloans	1% per month onwards
HDB Financial Services Ltd.	8% - 26% p.a.
HDFC Bank	10.75% - 25% p.a.
IDFC First Bank	10.50% p.a. onwards
Indifi	1.50% per month onwards
Kotak Mahindra Bank	16% - 26% p.a.
Lendingkart	12% - 27% p.a.
Mcapital	2% per month onwards
NeoGrowth Finance	15% - 40% p.a.
Tata Capital	12% p.a. onwards
UGRO Capital	9% - 36% p.a.
Bajaj Finserv	10% to 26%

Next, business owners need to own and manage various facilities required to start a dairy farming business:

• Feed and manure storage room
• Irrigation system for pasture
• Milking store
• Sheds or barns sheltered from the weather
• Sterile facility for storage of milk and pasteurizing purpose
• Other related machinery and equipment

Further, business owners need to obtain licenses, permits, and permissions from the respective authorities. A special license is required to cross animals from one state to another in special circumstances like illness, vaccinations, etc.

NABARD Subsidy

Get 33% Subsidy on Loans up to Rs. 7 Lakh to Open Dairy Farm

The National Bank for Agriculture and Rural Development (NABARD) initiated a subsidy scheme under Dairy Entrepreneurship Development Scheme (DEDS) in which farmers shall be benefited from getting subsidies on dairy farming loans via approved and eligible banks and NBFCs. Farmers can avail of 33.33% subsidy of total project cost on dairy farming loans up to Rs. 7 lakh by visiting the approved Regional Rural Banks (RRBs), or commercial and co-operative banks. Applicants can avail subsidy and loan-related all the necessary information by visiting the nearest bank or NBFC.

Source: Krishi Jagran

Requirements of Dairy Farming Business Plan

Below mentioned are the components of Dairy Farming to be used or installed before and after starting your own business:

• Shed: There must be a properly covered area built in the farmland before bringing in cattle to be kept
• Land: Farm owners should maintain cultivated areas or land for growing fodder crops for cattle. The land area basically depends on the number of cattle to be kept. Usually, 1 acre of land is sufficient to feed around 7-10 cows
• Water and Fodder: Both of these things should be in abundance, as water helps in the growth of green fodder, and fodder further helps in the proper nourishment of cattle
• Breed Selection and Vaccination: To yield more milk, there should be good cow breed selection. Moreover, to control diseases and protect cow’s health, their caretaker should have a strict vaccination schedule

Being a business of high demand, marketing cost is much lesser, as compared to the investment required in animal husbandry. As per the recent research and investment market analysis, approximately Rs. 10 lakh to Rs. 20 lakh is the investment range to start a small-scale dairy farm in rural or urban areas of India.

The investment required to start a large-scale dairy farming business can exceed up to Rs. 1 crore or even more. Therefore, interested business owners here can check and compare all the available business loan options offered by banks and NBFCs at competitive interest rates, as per their business requirements.