What is a dairy farm loan?

A dairy farm loan is financing offered to dairy farmers and producers specifically for establishing, operating, or expanding dairy farming activities. These loans cater to the unique capital requirements of running dairy operations.

The funds can be utilised for various needs like:

• Purchasing dairy livestock: To buy milch animals like cows, buffaloes, and goats for milk production
• Building dairy infrastructure: For building cattle sheds, buying equipment like bulk milk chillers, milking machines, milk tankers, fodder processing units, establishing waste management systems, etc.
• Meeting recurring expenses: For day-to-day operational costs, including animal feed, medicines, veterinary care, labour, utilities, etc.
• Increasing production capacity: To expand the dairy herd size and add sheds and machinery to scale up operations
• Diversifying to other product lines: For funding on-farm milk processing facilities or making value-added dairy products like cheese, yoghurt, ghee, etc.

Dairy loans provide the substantial capital needed in this sector at farmer-friendly interest rates and flexible repayment options. They are offered by banks, agricultural cooperatives, and Non-Banking Financial Companies (NBFCs) dedicated to the dairy and animal husbandry sectors.