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How Can I Start a Dairy Farming Business in India? – Detailed Steps



dairy farming business plan

Are you a person who is interested in the dairy farming business? If yes, you have landed on the right page. On this page, we have provided all the details about the dairy farming business plan, investment costs, subsidies provided by the government, profits, and much more. Scroll down to find more.

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Dairy Farming Business Plan in India

The dairy farming business is one of the businesses since there is a never-ending demand for milk across the world. Also, the dairy farming business is evolving into an interesting business idea among the younger generation since India’s milk production is increasing by 3-4% every year. Thus, preparing a detailed business plan for dairy farming is extremely important. Preparing a business plan will assist you in understanding how to manage dairy animals, obtain loans, government-based subsidies, and much more.

To help you with all the aspects of the dairy farming business, here is a detailed section that tells you everything you need to know about starting the dairy farming business.

Check 10 Small Profitable Business Ideas with Low Investment

How to Start a Dairy Farming Business in India?

To start a dairy farm business, one will have to follow the 8-step guide listed below:

1. Developing a Business Plan for a Dairy Farm

Before opening any business, it’s important to create a well-rounded business plan. A business plan will give you an outline of the basic investment and profits for your business. You need to study the needs of your market thoroughly before creating a farm-based business plan. Also decide what kind of dairy business you want to set up such as selling cow milk, buffalo milk, or other products. One needs to analyze the following parameters while creating a dairy farming business plan.

  1. What type of animals will be raised in the dairy farming business? whether it is a Cow, Goat, Buffalo, or any other milk-giving animal.
  2. For how many animals are you starting the dairy farming business?
  3. What investment you can make in the dairy farming business?
  4. List of facilities needed for running a dairy farming business.

If you are a newbie to starting a dairy farming business, we advise you to consult any person who is successfully running a dairy farming business to understand the business execution.

2. Choosing a Location for Dairy Farm

Once you are done with the business plan, the next step is to find the ideal location to execute your dairy business. Always choose a location where you have got all the facilities required to run a dairy farming business. While choosing the land for the dairy farming business, keep a note of the following things:

  • Choose land that is wide enough to fit all your dairy farming business needs.
  • As per your comfort, choose the land that can be rented or leased. Also, don’t forget to take care of the agreement while leasing or renting the land.
  • To avoid the transportation costs, choose a piece of land that is close to the market.
  • Most people opt to start the dairy farming business in and around the villages due to the lower labor costs and land costs.
  • Choose pollution-free land, such as air, water, noise, etc.,
  • Choose a climate where the animals are comfortable and healthy.

3. Investment Planning for a Dairy Business

Based on your business plan and land requirements, you now have an idea of how much money you will need to start the dairy farming business. So, the next step is to arrange funds to start your dairy farming business. There are many governments and private financial institutions that lend money to help business owners start their businesses.

Based on your budget analysis, if you need a business loan, then you can simply apply for the same from the following options by submitting your business plan:

  • Bank Loans
  • Government Subsids
  • NBFCs
  • Self-help groups
  • Borrowing money from friends or relatives (unofficial)

NABARD Subsidy for Dairy Farming Business

NABARD introduced a Dairy Entrepreneurship Development Scheme that aims to help farmers find their way in the competitive dairy industry with subsidies and loan benefits. By contacting an approved bank or NBFC, farmers can avail of up to Rs. 7 lakh loans with a 33% subsidy under the dairy farming business in India.

4. Obtaining Dairy Farming Licenses

There are a few licenses that a business owner will require to run the dairy farming business in India. The list of licenses that one will need to start a dairy farming business is listed below:

  • Company Registration Certificate
  • Dairy Farm Permit
  • FSSAI License
  • Registration with the ROC or Registrar of Firms
  • Shed License
  • Trade License

5. Purchasing and Organizing Dairy Farming Business Needs

Once obtaining the necessary licenses, one will have to arrange the following requirements to start the dairy farming business:

  • Cattle Shed: To keep cattle, you will need a roof to protect them from extreme weather conditions. Indoors or out, it is still advisable to have a shelter for the animals from the rain or sun.
  • Land: Farmers need to make sure that their animals have a place to live, a place to eat, water, and equipment for them to be able to participate in everyday activities. Farmers require one acre for 10 cows if they are setting up the farm from scratch. If they already have land that is used for common purposes, farmers also need more permission from the authorities to keep animals on their farmland if they want more than 10 cows at one time.
  • Breed Selection: To produce higher volumes of milk, one must take into consideration the selection of animal breeds. Specifically, quality dairy cows of exotic breeds can increase the amount of milk yield. In addition to this, other things need to be taken into account as well: how regularly the animals are vaccinated, breeding quality, and how easily related species can be bred as crossbreds.

To help you find the right breed for your dairy farming business, here is a list of animals that will give you good quality milk:

Dairy Farming Enterprise Goat Breeds for the Dairy Farming Business Buffalo Breeds for the Dairy Farming Business
  1. Cross-bred cows of Zebu
  2.  Jersy Bulls
  3. Jersy Bull cross-bred
  4. Brown Swiss
  5. Holstein Friesian
  6. Sahiwal herds
  1. Jamnapari
  2. Boer Goat
  3. Barbari
  1. Mehsana
  2. Elite buffaloes
  3. Murrah
  4. Nil-Ravi

6. Purchasing Dairy Farming Equipments

Your dairy farm’s machinery requirements are determined by the size of your dairy farm. The equipment you will need for your dairy farm falls into two categories: milk processing equipment and farming equipment.

Required Milk Processing Equipments

The list of milk processing equipment required in the dairy farming business is given below:

  1. Pasteurisers,
  2. Homogenizers,
  3. Tanks,
  4. Separators,
  5. Milking Machines.

Required Farming Equipments

The list of farming equipment required to start the dairy business is given below:

  1. Feed Grinder,
  2. Machine for Making Fodder Blocks,
  3. Press for compacting fodder,
  4. Fodder Truck,
  5. Generator,
  6. Loader tractor,
  7. Milking Cans,
  8. mud pump
  9. Pressure Washer,
  10. Tractor Implements.

7. Infrastructure Preparations

As you build your dairy farm business, you will want to take inventory of any equipment already on hand as well as identify needed infrastructure. Some of the equipment or items you may need to include in your infrastructure arrangements are given below:

  1. Feed and manure storage room
  2. Irrigation system for pasture
  3. Milking store
  4. Other related machinery and equipment:
  5. Sheds or barns sheltered from the weather
  6. Sterile facility for storage of milk and pasteurizing purposes

8. Hiring Employees and Getting Dairy Products to Market

To manage your dairy business, you need more than just employees. Here are all the people that are essential to help run the dairy efficiently:

  1. Employees for Milking. If you have more than five cows, then milking is extremely difficult for a single person. Therefore, hire the necessary employees to run the milking process smoothly.
  2. Employees for Arranging Fodder and Transportation: You will also need a few employees who are responsible for taking care of the fodder arrangements for the animals. Also, you will need a person who is responsible for transporting the dairy needs to the market.
  3. Helper for other work in the dairy farming business.

Identify potential markets or dairies in your area and sell all of your dairy products to them. milk business is an evergreen business, there is no room for loss. So don’t worry about your profits and returns.

Now that you have been provided with all the necessary information on the dairy farming business, we hope this page is helpful for you. If you have any questions related to this page or in general about the dairy farming business, reach us through the comment box below and we will get back to you as soon as possible.

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