How cooperative loans help India's dairy farmers
What's the story
Cooperative dairy farming loans in India are financial instruments aimed at strengthening the dairy industry, especially small and marginal farmers.
These loans help farmers purchase high-yield cattle, build sheds, and access feed and veterinary services.
As agriculture forms the backbone of India's economy, these loans not only contribute to increasing milk production but also play a pivotal role in boosting rural livelihoods.
Loan varieties
Types of dairy farming loans
In India, loans for cooperative dairy farming can be classified into short-term, medium-term, and long-term loans depending on the repayment duration.
Short-term loans are generally availed for procuring feed and meeting other daily necessities.
Medium-term loans could be for purchasing cattle or minor shed repairs.
Long-term loans are used for building dairy sheds or purchasing expensive milking machines.
Eligibility
Eligibility criteria for applicants
To be eligible for a cooperative dairy farming loan in India, applicants need to fulfill the following criteria:
They should be members of a milk cooperative society affiliated with the National Dairy Development Board or any recognized state-level federation.
They must own or lease land that is suitable for shed construction and can ensure sufficient fodder cultivation.
A good credit history is crucial for applicants to be considered eligible.
Financial details
Interest rates and repayment terms
The interest rates for cooperative dairy farming loans range from 8% to 12%, depending on the bank and type of loan.
Repayment tenures for short- and medium-term loans range from one to five years, while long-term loans can be repaid over a period of up to 15 years.
Certain schemes offer interest subsidies or moratorium periods during which no repayment is necessary for a specified time.
Documentation
Documentation required
Applicants are required to submit a number of documents when applying for a cooperative dairy farming loan in India.
These include proof of identity (Aadhaar card), proof of residence (utility bills), land ownership or lease documents, membership proof with the milk cooperative society, project report outlining the purpose of the loan, and any other documents as stipulated by the lending institution.
Application tips
Tips for successful application
To improve your chances of approval for a cooperative dairy farming loan, make sure your project report is comprehensive and grounded in reality.
It should clearly detail how you intend to utilize the loan to increase productivity or grow your dairy business.
Keeping a positive record with your local milk cooperative society can also strengthen your credibility as an applicant.