Feasibility of Institutional Financing for Dairy Development

A commercial bank had undertaken an Integrated Development Project for dairy development in collaboration with a dairy plant. The scheme envisaged the supply of bank finances to the farmers for the purchase of quality cattle and repayments through milk supply to the dairy. A sample of beneficiaries were contacted to find out the impact of bank finances on their income. Also the impact of the scheme on the dairy’s milk supply and the viability of this scheme as a commercial proposition was analysed. The findings of the study indicate that commercial lending institutions could join hands with organized dairies to advance money for purchasing cattle; this process would benefit the farmers, the dairy plants, and the bank. The implementation of such schemes could go a long way in improving the incomes of small farmers and at the same time increasing the production of milk in the milk shed areas of organized dairies.