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What is the Dairy Entrepreneurship Development Scheme?

By Tata Capital
05 January 2026
9 mins read
3122

India has emerged as the largest milk producer in the world, contributing a staggering 24.64% of global milk production in the year 2021-22. This remarkable feat was only possible with the government’s unwavering support and the successful implementation of initiatives like the Dairy Entrepreneurship Development Scheme (DEDS).

The Government of India introduced the DEDS dairy loan scheme in September 2010. Its aim was to generate self-employment opportunities in the country’s dairy sector and improve milk production by providing financial support to dairy entrepreneurs.

If you’re interested, you can apply for a dairy loan under this scheme. Read on to learn in detail about the DEDS scheme’s key objectives, components, and eligibility criteria.

Overview of the Dairy Entrepreneurship Development Scheme

The Dairy Entrepreneurship Development Scheme was implemented by the Department of Animal Husbandry, Dairying and Fisheries in September 2010. Under this scheme, the National Bank for Agriculture and Rural Development (NABARD) provides business loans to aspiring entrepreneurs looking to start milk production and processing ventures.

The primary objective of the DEDS scheme was to encourage investment and entrepreneurship in the country’s dairy sector. Due to its special focus on bringing milk processing to the village level, the scheme has been a key contributor to socio-economic development in rural areas.

Also, read – SBA Loan in India: Document & Eligibility

DEDS scheme objectives & focus areas

DEDS dairy loan scheme aims to achieve these five goals:

1. Promote the establishment of modern dairy farms to produce clean milk.

2. Encourage the rearing of heifer calves to conserve good breeding stock.

3. Bring structural changes in the unorganised sector so that initial milk processing can be done at the village level.

4. Replace the traditional technology with the latest innovations to handle milk on a commercial scale.

5. Generate self-employment and provide infrastructure mainly for the unorganised sector.

DEDS scheme: Key components & subsidy structure

Here’s the detailed breakdown of components of the DEDS scheme and capital subsidies:

Component	Unit Cost	Capital Subsidy
Establishment of small dairy units with cross-breed or indigenous cows like Red Sindhi, Sahiwal, Rathi, Gir, etc., or graded buffaloes up to 10 animals.	Rs. 5 lakhs for 10 animal unit – minimum unit size is 2 animals with an upper limit of 10 animals.	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 10 animals subject to a ceiling of Rs.17,500 (Rs.23,300 for ST/SC farmers) or actual, whichever is lower.
Rearing of heifer calves (indigenous breeds of cattle, cross-bred and graded buffaloes up to 20 calves)	Rs. 4.80 lakhs for 20 calf unit – the minimum unit size of 5 calves with an upper limit of 20 calves.	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is restricted on a pro-rata basis to a maximum of 20 calf units subject to a ceiling of Rs.12,100 per calf (Rs.16,200 for ST/SC farmers) or actual, whichever is lower.
Vermicompost with a milch animal unit (to be considered with small dairy farm/milch animals and not separately)	Rs. 20,000	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.6,300 (Rs.8,400 for ST/SC farmers) or actual, whichever is lower.
Purchase of milking machines, milkotesters or bulk milk cooling units up to 5,000 litre capacity	Rs. 18 lakhs	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.5 lakh (Rs.6.67 lakh for ST/SC farmers) or actual, whichever is lower.
Purchase of dairy processing equipment to manufacture indigenous milk products	Rs. 12 lakhs	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.3.3 lakh (Rs.4.4 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of cold chain and dairy product transportation facilities	Rs. 24 lakhs	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.6.625 lakh (Rs.8.830 lakh for ST/SC farmers) or actual, whichever is lower.
Cold storage facilities for milk and milk products	Rs. 30 lakhs	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.8.25 lakh (Rs.11 lakh for ST/SC farmers) or actual, whichever is lower.
Establishment of private veterinary clinics	Rs. 2.40 lakhs for a mobile clinic and Rs 1.80 lakhs for stationary clinic.	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. The subsidy is subject to a ceiling limit of Rs.65,000 and Rs.50,000 (Rs.86,600 and Rs 66,600 for ST/SC farmers), respectively, for mobile clinics and stationary clinics or actual, whichever is lower.
Dairy marketing outlet or dairy parlour	Rs. 56,000	25% of the project cost (33.33% for ST/SC farmers) as capital subsidy. 25% of the project cost (33.33% for ST/SC farmers) as back ended capital subsidy. The subsidy is subject to a ceiling limit of Rs.75,000 (Rs.1 lakh for ST/SC farmers) or actual, whichever is lower.

Also, read – Loan For Poultry Farm: Apply for Poultry Farm Loan Online

Eligibility criteria for dairy loan under DEDS scheme

Under the DEDS scheme, the following entities are eligible for the NABARD loan for dairy farming:

1. Farmers

2. Single entrepreneurs

3. NGOs

4. Panchayati Raj institutions

5. Groups from unorganised sectors

6. Organised sector groups, such as self-help groups (SHGs), dairy cooperative societies, milk unions, and milk federations.

Furthermore, the government has also set the following terms and conditions for availing of the benefits under the DEDS scheme:

1. An entity can apply for assistance only once for each component of the scheme.

2. More than one family member can receive assistance if they set up separate units with separate infrastructure at locations at least 500 meters apart.

Who should apply: Dairy loan scheme benefits for MSME, SHGs, farmers & cooperatives

The DEDS under the dairy entrepreneurship development scheme supports a wide range of applicants aiming to grow or start dairy-based ventures through the dairy loan scheme:

Farmers: Individuals planning to start or expand dairy units, purchase high-yield cattle, or improve sheds and equipment under the DEDS scheme.

MSMEs: Small dairy businesses involved in milk production, processing, or distribution seeking an MSME loan for dairy farm growth.

Self-Help Groups (SHGs): Women-led or community groups setting up collective dairy enterprises using the dairy entrepreneurship development scheme.

Cooperatives: Registered dairy cooperatives investing in milk collection, chilling, or processing infrastructure through the deds.

Overall, the dairy loan scheme encourages entrepreneurship, rural income generation, and organized dairy sector development.

Also, read – Micro Credit: Definition, How it Works & Types

Dairy loan scheme (DEDS) interest rates, tenure & repayment rules

Under the DEDS scheme, NABARD offers dairy farm loans aligned with the Reserve Bank of India’s guidelines. Banks charge interest on the loan amounts until subsidies are disbursed to the beneficiaries. Once the beneficiary receives the subsidy, banks levy the interest on the remaining loan amount (after subtracting the subsidy).

The loan repayment period usually ranges from 3 to 7 years, depending on business activity and cash flow. Moreover, beneficiaries get a grace period of 3 to 6 months for dairy farm loans, and calf-rearing unit owners receive a grace period of up to 3 years.

Step-by-step: How to apply for dairy entrepreneurship loan online

Applying for a DEDS loan under the dairy entrepreneurship development scheme is a simple, structured process.

Follow these steps to access the dairy loan scheme online:

Check eligibility for the DEDS scheme, including applicant category and project type.

Prepare a basic project report outlining cattle purchase, infrastructure, and costs.

Choose a participating bank offering the dairy entrepreneurship development scheme.

Submit the online application with KYC, land records, and bank statements.

Apply for an MSME loan for dairy farm if registering as an enterprise.

Bank evaluates the proposal and conducts field verification.

On approval, loan is sanctioned and subsidy linked under DEDS.

This step-by-step approach helps streamline approvals and timely disbursement under the dairy loan scheme.

Also, read – Cash credit loan – Meaning, features, rates & how it works

Documents required for DEDS dairy loan application

To apply for a DEDS loan under the dairy entrepreneurship development scheme, applicants must submit the following documents as part of the dairy loan scheme:

Identity and address proof (Aadhaar, PAN, or Voter ID)

Recent passport-size photographs

Bank account details and statements

Project report as required under the DEDS scheme, covering cattle, infrastructure, and costs

Land ownership papers or valid lease agreement for the dairy unit

Income proof for individual applicants

MSME registration and basic business documents when applying for an MSME loan for dairy farm

Submitting complete documents helps ensure smooth processing and quicker approval under DEDS.

Common challenges, subsidy caps & latest DEDS updates

Before applying under DEDS, it helps to understand practical hurdles, subsidy limits, and recent changes linked to the dairy entrepreneurship development scheme and the dairy loan scheme:

Common challenges: Applicants under the DEDS scheme often face documentation gaps, delayed subsidy credit, bank-level appraisal delays, and limited awareness, especially in rural areas.

Subsidy caps: Subsidies under DEDS are capped as a percentage of project cost, with fixed limits per animal or unit, which may not fully cover rising setup expenses.

Scheme updates: While the original dairy entrepreneurship development scheme has evolved, its objectives continue through allied dairy-focused initiatives.

Alternative funding: Entrepreneurs can also explore an MSME loan for dairy farm expansion alongside existing dairy finance options.

List of eligible dairy business activities under DEDS scheme

Under DEDS of the dairy entrepreneurship development scheme, the dairy loan scheme supports the following eligible activities:

Setting up small to medium dairy units with milch animals under the DEDS scheme

Purchase of high-yielding cows or buffaloes

Construction or renovation of dairy sheds and storage facilities

Installation of bulk milk coolers and milk testing equipment

Establishment of vermicompost or manure management units

Small milk processing and value-added activities linked to an MSME loan for dairy farm

Also, read – What is debt financing? Types & how it works

Final word

Dairy farm loans by NABARD under the Dairy Entrepreneurship Development Scheme have played a key role in transforming India into a milk production powerhouse. The scheme has also helped around 1.86 lakh entrepreneurs who had set up mini dairy units create employment for 2 people per unit.

Easy access to small business loans is vital for the growth of agricultural businesses. That’s why Tata Capital offers MSME loans of up to Rs. 90 lakhs at attractive interest rates. Furthermore, the flexible tenure ensures you can repay your loan conveniently.

FAQs

What is the DEDS scheme and who is eligible for a dairy loan?

DEDS under the dairy entrepreneurship development scheme supports farmers, MSMEs, SHGs, and cooperatives starting or expanding dairy units through the dairy loan scheme.

How much loan/subsidy can I get under Dairy Entrepreneurship Development Scheme?

Under the DEDS scheme, subsidy is linked to project cost with defined caps; remaining amount is financed as a bank loan under the dairy loan scheme.

What documents are needed for MSME dairy loan under DEDS scheme?

For an MSME loan for dairy farm, DEDS requires KYC, bank statements, project report, land/lease proof, and MSME registration under the dairy entrepreneurship development scheme.

What is the interest rate and repayment period for a DEDS dairy loan?

Interest and tenure under the dairy loan scheme depend on bank norms; DEDS scheme subsidy reduces the effective repayment burden for eligible applicants.

Can farmer groups, SHGs and dairy cooperatives apply for DEDS scheme?

Yes, DEDS under the dairy entrepreneurship development scheme allows applications from farmer groups, SHGs, and cooperatives for eligible dairy activities.

What are the main business activities covered by DEDS dairy loan?

The DEDS scheme covers dairy units, cattle purchase, sheds, milk cooling, manure management, and small processing under the dairy loan scheme.

How do I apply online for NABARD DEDS dairy loan?

Applicants submit proposals to participating banks; approved loans are linked to DEDS subsidy under the dairy entrepreneurship development scheme through NABARD channels.

What is the difference between DEDS and other government dairy schemes?

DEDS focuses on credit-linked subsidy via banks, while other schemes may offer infrastructure or program-based support without a direct MSME loan for dairy farm link.

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