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Securing a dairy farm loan can help start and operate your farm, and even make changes as well. Additionally, securing a dairy farm loan can help in establishing additional units to produce, process, and distribute more dairy or milk products. It also helps in meeting expenses such as acquiring raw materials, storage, processing, packaging, as well as costs incurred in the growth and maintenance of farm animals.
Also known as a working capital term loan, a dairy farm loan is eligible to be acquired by framers, or agro-workers, dairy co-operative societies, self-help groups, and others.
The loan amount granted to the above-mentioned applicants can range up to one lakh rupees when livestock is used as collateral. The loan amount granted to the above-mentioned applicants can exceed rupees one lakh when collateral used maybe land mortgage or agricultural credit or any other forms of security with a trusted third-party reference.
Dairy farm loans that range up to one lakh rupees have zero profit margin is nil, but for than rupees one lakh the profit margin ranges from 15% to 25%. However, the interest rate of a dairy farm loan depends on the lender, with a repayment period of five to six years, and in some instances a grace period of two to three months.
Creating a dairy farming business plan helps in attracting investors and raising funds. Running a dairy farm involves more costs than running poultry farms or any other farm. Creating a dairy farming business plan helps plan in advance for the costs involved. The following information will help you with how to start a dairy farm in India.
When figuring out how much it costs to start a dairy farm, it is important to get your estimates right, and analysis of future expenditure. With accurate estimates you will be able to build a dairy business that generates a profit, that will allow you to expand and grow your farm.
When doing an analysis of future expenditure, the key factors to consider are the 4 P’s of marketing with regard to your dairy business- product, price, place and promotion. As a matter of fact, it is important to review the 4P’s on a yearly basis to figure out the cost to start a dairy farm.
Another part of setting up a small dairy farm design and maximizing profit. is for you as a farm owner to have a proper understanding of your competition. Naturally, the largest cost involves medication and vaccination of animals and should be the most important consideration for calculating the cost to start a dairy farm. Hence, for this reason, several standard dairy farms prefer hiring in-house veterinary doctors to protect their animals. This practice is followed in several countries like the United States of America, Canada, the United Kingdom and Australia.
Other factors that contribute to cost include cost of labour, cost of cattle feed, cost of cattle medication, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, promotion and branding cost, rent/leasing amongst other factors.
Finally, prepare yourself to start small and aim high. Rather than purchasing a farm, you can either rent or lease a property for your farming activities. Wish you all the best with your dairy farming business plan.
What is the meaning of dairy farming?
Dairy farming means ‘raising milk-producing animals for the purpose of producing milk’. If you have cows, buffaloes or goats for the purpose of producing milk, then you are a businessman/businesswoman owning a dairy farming business.
Why dairy farming is important?
Dairy farming is considered to be important since it is a great food source. And it can also be a great source of additional income for you and your family. Total investment is relatively high, but the dairy farming business has a high ROI (return on investment) ratio.
Is there the provision of subsidy or availing bank loans to start a dairy business?
Yes, there are provisions for subsidy and bank loans. For further information, you can contact the banks or the NABARD office.
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