Dairy Farm Loan

A dairy farm loan is a type of loan that is used to finance the purchase or expansion of a dairy farm. These loans are typically provided by banks, credit unions, and other financial institutions.

The terms of a dairy farm loan will vary depending on the lender, the size of the loan, and the borrower's creditworthiness. However, most dairy farm loans have a fixed interest rate and a repayment term of 10 to 15 years.

Discover agricultural growth with dairy farm loans that suit your unique requirements. Explore financing options for your dairy farming endeavors to ensure sustainable development.

Interest Rates for Dairy Farm Loan

The interest rates for dairy farm loans in India vary depending on the lender, the amount of the loan, and the borrower's creditworthiness. However, as a general rule, interest rates for dairy farm loans are in the range of 10% to 15%.

Lender Type Business loan
Commercial Banks Up to 15%
Government Schemes Up to 8%
Note: These rates are indicative and subject to change. Always check with the bank for the most up-to-date information before making any investment decisions.

Eligibility Criteria For Dairy Farm Loan

To qualify for a dairy farm loan or a Dairy business loan in India, you'll need to meet certain eligibility criteria set by individual lenders and potentially by government scheme providers if applicable. Here's a general overview of the key requirements:

Individual Farmer:

  • Age: Typically between 18 and 70 years at the time of loan maturity.
  • Citizenship: Indian citizen or legal resident with valid identity proof.
  • Financial standing: Stable income or existing agricultural business with positive financials.
  • Land ownership: Owning or leasing land suitable for dairy farming operations.
  • Experience: Prior experience in dairy farming or related agricultural activities is usually preferred.
  • Project proposal: A well-defined project plan outlining the purpose of the loan, investment details, and expected returns.

Registered Business Entity:

  • Valid business registration documents (e.g., FPO, cooperative) if applying under a business name.
  • Financial statements (P&L, balance sheets) demonstrating financial stability.
  • A clear business plan outlining the dairy farm project and its alignment with company goals.

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Documents Required For Dairy Farm Loan

The documents required for a dairy farm loan in India can vary depending on the lender and any government scheme you might be applying under. However, there's a general list of documents you can expect to need:

Basic Documents:

  • Identity proof: PAN card, Aadhaar card, voter ID, or driver's license.
  • Address proof: Utility bills, ration card, Aadhaar card, or bank statement.
  • Passport-size photographs.

EMI Calculator For Dairy Farm Loan

An EMI (Equated Monthly Instalment) calculator serves as a valuable tool for individuals or businesses contemplating a dairy farm loan. The calculator allows prospective borrowers to estimate their monthly repayment obligations based on :

  • the loan amount,
  • interest rate,
  • and loan tenure.

By entering the above variables, users can gain valuable insights into their financial commitment, facilitating informed decision-making and effective financial planning. The EMI calculator simplifies complex loan repayment calculations, offering clarity on the financial implications of acquiring a dairy farm loan or aiding Dairy farm equipment financing.

Monthly EMI 86
Principal Amount 1,000
Total Interest 32
Total Amount 1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

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Types of Dairy Farm Loan Schemes

A variety of dairy farm loans & schemes are offered by different lenders. Let’s go through the loan schemes for dairy loan from below:

Dairy Entrepreneurship Development Scheme (DEDS)

DEDS is a government-backed scheme in India that aims to encourage self-employment and infrastructure development in the dairy sector. It provides back-ended capital subsidies to individuals and organizations for setting up or upgrading dairy processing units, cold chain facilities, and other related activities.


  • Subsidy: 25% of the project cost for general category beneficiaries, 33.33% for SC/ST entrepreneurs (subject to component-wise ceilings).
  • Activities covered: Procurement, milk production enhancement, transportation, preservation, marketing, and processing of milk.
  • Financial assistance: Loans from commercial banks, cooperative banks, and regional rural and urban banks are available.
  • Eligibility: Open to individuals, organized and unorganized sectors, dairy cooperatives, and FPOs.

Cent Dairy Scheme

The Cent Dairy Scheme is a loan program offered by the Central Bank of India to provide financial assistance to individuals and entities engaged in dairy farming.


  • Eligibility: Open to individuals, firms, companies, societies, NGOs, and cooperative societies engaged in dairy farming.
  • Loan Amount: Based on the viability of the project and the repayment capacity of the borrower, with unit cost excluding margin money.
  • Margin:
    • Nil for loans up to Rs. 1.60 lakh
    • 10% for loans above Rs. 1.60 lakh and up to Rs. 5 lakh
    • 15% for loans above Rs. 5 lakh and up to Rs. 10 lakh
    • 20% for loans above Rs. 10 lakh
  • Interest Rate: Competitive and generally lower than regular FDs, with interest rates varying depending on the loan amount and tenure.
  • Repayment: Up to 8 years, with a moratorium of up to 2 years (maximum).

Dairy Processing and Infrastructure Development Fund (DIDF)

The Dairy Processing and Infrastructure Development Fund (DIDF) is a government-backed initiative in India aiming to strengthen the dairy sector by providing financial assistance for processing infrastructure and marketing initiatives. Here's a rundown of its key aspects:


  • Modernise and upgrade milk processing plants and machinery.
  • Create additional infrastructure for processing more milk.
  • Improve milk quality and value addition through processing.
  • Enhance marketing and branding of dairy products.

Animal Husbandry Infrastructure Development Fund (AHIDF)

The Animal Husbandry Infrastructure Development Fund (AHIDF) is another crucial government initiative in India aimed at boosting the nation's dairy and livestock sector. It provides financial assistance for creating and upgrading critical infrastructure that directly impacts both farm efficiency and farmer income.


  • Enhance animal feed production and accessibility to quality feed.
  • Improve fodder development and management practices.
  • Modernize animal housing and shed facilities.
  • Strengthen breeding infrastructure and genetic improvement programs.
  • Create value chains for milk and meat products.
  • Boost employment opportunities in animal husbandry and related sectors.

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Comparing Dairy Farm Loan Providers

Choosing the right loan for your dairy farm is important. By comparing different providers based on interest rates you can find the best financing option for your needs.

Banks Margin/ Loan Amount Tenure
Union Bank of India Up to 25% minimum Up to 84 months
IDBI Bank Up to 10 lakh Up to 72 months
Federal Bank Up to 75% of project cost Up to 84 months
Indian Bank Up to 25% of project cost Up to 72 months
Bank of Baroda Up to 10% As per bank

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Note: These rates are indicative and subject to change. Always check with the bank for the most up-to-date information before making any investment decisions.

Tips For a Successful Dairy Farm Loan Application

Securing a dairy farm loan involves careful planning and preparation to demonstrate the viability of the venture to potential lenders. Here are key tips for a successful dairy farm loan application:

  • Comprehensive Business Plan: Develop a detailed business plan outlining your dairy farm's objectives, operational strategies, and financial projections.
  • Financial Documentation: Provide accurate and up-to-date financial statements, including income statements, balance sheets, and cash flow statements, to showcase the financial health of your dairy business.
  • Creditworthiness: Maintain a good personal and business credit score to enhance your eligibility and negotiating power.
  • Collateral Preparedness: Identify and be prepared to offer collateral to secure the loan, such as the dairy farm property, equipment, or livestock.
  • Expertise and Experience: Highlight your experience and expertise in dairy farming to instil confidence in lenders regarding your ability to manage the business successfully.
  • Legal Compliance: Ensure that your dairy farm complies with all relevant regulations and standards, providing a sense of security to the lender.
  • Loan Amount Alignment: Apply for a loan amount that aligns with the specific needs of your dairy farm and considers potential challenges or expansions.
  • Research Lenders: Explore different lenders, comparing interest rates, terms, and fees. Choose a lender whose offerings align with your financial goals.
  • Consult Financial Advisors: Seek advice from financial advisors or agricultural consultants to ensure your application is well-prepared and addresses potential concerns.

Steps to Apply for Online Dairy Farm Loan

Applying for a dairy farm loan online can be a convenient and efficient way to secure funding for your business needs in India but the specific steps may vary depending on the lender and platform you choose to use with some requiring initial visits to a branch for verification purposes and others having fully digital processes from start to finish. Here are some general steps to guide you through the process :

  • Gather documents: IDs, address proof, business plan, and loan purpose documents.
  • Choose a lender and scheme: Check eligibility tools online.
  • Apply online: Fill out the form, upload documents, and submit.
  • Be available for communication and verification.
  • Approval and disbursement: Wait for a loan to be credited.

Steps to Apply for a Business Loan

You can avail a business loan as per your need for a dairy farm. Buddy Loan provides you with a pool of RBI approved lenders, providing business loans of upto 50 lakhs.

Check the steps below and apply for a loan now!

  • Step 1: Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).
  • Step 2: Open the business loan application page. Enter your mobile number and OTP.
  • Step 3: Specify the desired loan amount and email. Next, choose the Business Loan option.
  • Step 4: Choose if you have a Business Proof (Yes/ No)
    • If ‘Yes’ (If you have a business proof), enter your business and personal details.
    • If ‘No’ (If you do not have a business proof), choose the profession type and enter your personal details.
  • Step 5: Provide income details and Click the ‘Submit’ button.

Apply for a business loan now!

Frequently Asked Questions

A dairy farm loan is a financial resource specifically designed for establishing or expanding dairy operations, and eligibility often includes factors like age, farming experience, and livestock numbers.

You can use a dairy farm loan to build or upgrade facilities, buy livestock, acquire equipment, and manage operational costs.

From animal purchases and feed to infrastructure upgrade and operating costs, a dairy farm loan can cover all your bovine business needs.

You can typically apply for a dairy farm loan through agricultural departments, commercial banks, NBFCs, or online platforms, ensuring you meet eligibility requirements and provide necessary documents.

Be prepared to show identity proofs, bank statements, land ownership documents, livestock details, and possibly business plans when applying for a dairy farm loan.

Dairy farm loan approval involves verification of documents, creditworthiness checks, technical assessment, and final lender decision, often with potential for negotiation and additional information requests.

Dairy farm loan interest rates (ranging from 1.25% to 13.5%) and repayment terms (3 to 8 years) vary depending on factors like loan amount, tenure, borrower profile, and lender specific schemes.

Absolutely! Dairy farm loans are versatile and can be used for both expanding an existing farm or launching a brand new one. Think of it as fuel for your bovine dreams, whether you're adding a few more cows to your herd or building your operation from the ground up.

While specific details vary, loan size often depends on your project needs and repayment capacity, while location might be considered based on market potential or government initiatives for certain regions. Research requirements for your desired loan and region for clarity.

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