PROJECT REPORT

ON
PROCESS OF DAIRY PRODUCTS
 FARM OFFICE
ANAVARAM VILLAGE, D NO 11-8-39 DASAPALLA HILLS
BADIGI MANDAL FLAT NO 302,VISAKHAPATNAM
VIZIANAGARAM DIST

EXECUTIVE SUMMARY OF THE PROJECT PROFILE

1. Name of the unit. : ROHINI DAIRY FARM

2. Location of the Farm. : Anavaram Village, Badigi Mandal, VZM

Dist

3. Line of activity. : Dairy Farming (Production of Milk)

4. Constitution. : Proprietary.

5. Sector. : Agriculture.

6. Name of the Promoter. : Mr SURESH

6. Project Cost & Means of Finance

(Rs in lacs)
Particulars Amount Particulars Amount
Land Own Capital 44.96
Sheds construction 60.96 Term Loan 100.00
Animals & other 80.00
expenses
Working capital 16.00 Working capital 12.00
loan
156.96 156.96
 INTRODUCTION

Milk production assumes second priority after rice cultivation in India

agriculture. The village economy is incomplete for marginal farmers if they lack
one or two bovine animals. The fact the about 75% population of India is
engaged in agricultural activities has put the organized milk production on prime
priorities of Government and other organizations. In this context operation flood
and consequent thresh-hold of white revolution has come through the Co-
Operative pattern of milk production management. Consequently more than 5
million farmers are today organized into about 0.5 lacks of village milk Co-
Operatives and the turnover of Dairy sector has reached to Rs. 30.00 crore per
annum.

The milk production in Indian set up is largely a source of supplementary

income to the farmers who product milk basically for self consumption and may
spare the surplus for the market. The problem of Dairy industry the Indian
context are unique in the sense that through India account for probably the
largest bovine population in the world yet it Indian Dairy has been the low
intensity dairying based on poor yielding cattle fed on crop and labour intensive
management.

However, with the efforts of different agencies in various states, the

development of Co-Operative system in the sector which has tried to integrate
both technology of milk production and its subsequent marketing had led to
steady growth of five percent per annum. Since the cost of production per litre
of milk has been found to have inverse relationship with the productivity, the aim
of Co-Operative movement in India has been no upgrade the productivity along
with the efficient marketing management so that a fruitful source and sink
relationship is maintained to benefit of marginal farmers.
 SCOPE OF THE PROJECT

The project envisages for Dairy form. The cost of the project is estimated at
Rs. 156.96 lakhs the installed capacity of the plant is 360 litres on 300 days
working. The capacity utilization is assumed to be at 70% in 1 st year, 80% in 2nd
year and 90% in 3rd year onwards.

SECTOR AND CONSTITUTIONS:

A Farm by name and style Rohini Dairy Farm is a proprietor concern, the
main object of the farm is to Milk from Buffalos. The Farm comes under
Agricultural sector and does not require any registration.

PROMOTERS BACKGROUND :

Sri Suresh, S/o., aged years is residing at Visakhapatnam dist. He is the

sole proprietor of the firm. He is well versed in cultivations. His family are having
good back ground in Cultivation and Animal Husbandry. The promoter has
worked in similar farm for three years and got good experience in the animal
farm. He has got knowledge in the raring of the Buffalos and the marketing of
Buffalos milk and its by-products. With this experience he can manage the farm
in a profitable manner. He is an income tax assesse. He owns property worth of
Rs 70 lakhs.
 MARKETING PROTENTIAL

In India, every one demands milk, but doe not get it. The production of milk
is mainly a rural activity. Its output varies from region to region. The
modernization of dairying has had its impact in all levels from the production of
milk in rural areas to its handling, transportation, processing and retailing to
other urban consumer. With the increasing demand of milk production in the
country, the surplus milk needs to be converted to long self life production.

Operation flood project has emerged as a highly successful and a very

promising pro gramme of Indo Eec Co-Operation in the last 20 years.

The promoter has got tie-up with City milk for supply of the milk in bulk.
The promoter will sell all the milk produced in the farm to the said Dairy daily.
DAIRY PROCESSING:

Originally, milking and processing took place on the dairy farm itself. Later,
cream was separated from the milk by machine on the farm, and transported to
a factory to be made into butter. The skim milk was fed to pigs. This allowed for
the high cost of transport (taking the smallest volume high-value product),
primitive trucks and the poor quality of roads. Only farms close to factories could
afford to take whole milk, which was essential for cheesemaking in industrial
quantities, to them.
Originally milk was originally distributed in 'pails', a lidded bucket with a handle.
These proved impractical for transport by road or rail, and so the milk churn was
introduced, based on the tall conical shape of the butter churn. Later large
railway containers, such as the British Railway Milk Tank Wagon were introduced,
enabling the transport of larger quantities of milk, and over longer distances.
The development of refrigeration and better road transport, in the late 1950s,
has meant that most farmers milk their cows and only temporarily store the milk
in large refrigerated bulk tanks, from where it is later transported by truck to
central processing facilities.
In many European countries, particularly the United Kingdom, milk is then
delivered direct to customers' homes by a milk float.
Milking machines

The milking machine extracts milk from all teats.

Milking machines are used to harvest milk from cows when manual milking
becomes inefficient or labour-intensive. One early model was patented in 1907.
[10]
The milking unit is the portion of a milking machine for removing milk from an
udder. It is made up of a claw, four teatcups, (Shells and rubber liners) long milk
tube, long pulsation tube, and a pulsator. The claw is an assembly that connects
the short pulse tubes and short milk tubes from the teatcups to the long pulse
tube and long milk tube. (Cluster assembly) Claws are commonly made of
stainless steel or plastic or both. Teatcups are composed of a rigid outer shell
(stainless steel or plastic) that holds a soft inner liner or inflation. Transparent
sections in the shell may allow viewing of liner collapse and milk flow. The
annular space between the shell and liner is called the pulse chamber.
Milking machines work in a way that is different from hand milking or calf
suckling. Continuous vacuum is applied inside the soft liner to massage milk from
the teat by creating a pressure difference across the teat canal (or opening at
the end of the teat). Vacuum also helps keep the machine attached to the cow.
The vacuum applied to the teat causes congestion of teat tissues (accumulation
of blood and other fluids). Atmospheric air is admitted into the pulsation chamber
about once per second (the pulsation rate) to allow the liner to collapse around
the end of teat and relieve congestion in the teat tissue. The ratio of the time
that the liner is open (milking phase) and closed (rest phase) is called the
pulsation ratio.
The four streams of milk from the teatcups are usually combined in the claw and
transported to the milkline, or the collection bucket (usually sized to the output
of one cow) in a single milk hose. Milk is then transported (manually in buckets)
or with a combination of airflow and mechanical pump to a central
storage vat or bulk tank. Milk is refrigerated on the farm in most countries either
by passing through a heat-exchanger or in the bulk tank, or both.
The photo to the right shows a bucket milking system with the stainless steel
bucket visible on the far side of the cow. The two rigid stainless steel teatcup
shells applied to the front two quarters of the udder are visible. The top of the
flexible liner is visible at the top of the shells as are the short milk tubes and
short pulsation tubes extending from the bottom of the shells to the claw. The
bottom of the claw is transparent to allow observation of milk flow. When milking
is completed the vacuum to the milking unit is shut off and the teatcups are
removed.
Milking machines keep the milk enclosed and safe from external contamination.
The interior 'milk contact' surfaces of the machine are kept clean by a manual or
automated washing procedures implemented after milking is completed. Milk
contact surfaces must comply with regulations requiring food-grade materials
(typically stainless steel and special plastics and rubber compounds) and are
easily cleaned.
Most milking machines are powered by electricity but, in case of electrical failure,
there can be an alternative means of motive power, often an internal combustion
engine, for the vacuum and milk pumps.
Milking shed layouts

Milking parlour at Pardes Hanna Agricultural High School, Israel

Bail-style sheds
This type of milking facility was the first development, after open-paddock
milking, for many farmers. The building was a long, narrow, lean-to shed that
was open along one long side. The cows were held in a yard at the open side and
when they were about to be milked they were positioned in one of the bails
(stalls). Usually the cows were restrained in the bail with a breech chain and a
rope to restrain the outer back leg. The cow could not move about excessively
and the milker could expect not to be kicked or trampled while sitting on a
(three-legged) stool and milking into a bucket. When each cow was finished she
backed out into the yard again. The UK bail, initially developed by Wiltshire dairy
farmer Arthur Hosier, was a six standing mobile shed with steps that the cow
mounted, so the herdsman didn't have to bend so low. The milking equipment
was much as today, a vacuum from a pump, pulsators, a claw-piece with pipes
leading to the four shells and liners that stimulate and suck the milk from the
teat. The milk went into churns, via a cooler.
As herd sizes increased a door was set into the front of each bail so that when
the milking was done for any cow the milker could, after undoing the leg-rope
and with a remote link, open the door and allow her to exit to the pasture. The
door was closed, the next cow walked into the bail and was secured. When
milking machines were introduced bails were set in pairs so that a cow was being
milked in one paired bail while the other could be prepared for milking. When
one was finished the machine's cups are swapped to the other cow. This is the
same as for Swingover Milking Parlours as described below except that the cups
are loaded on the udder from the side. As herd numbers increased it was easier
to double-up the cup-sets and milk both cows simultaneously than to increase
the number of bails. About 50 cows an hour can be milked in a shed with 8 bails
by one person. Using the same teat cups for successive cows has the danger of
transmitting infection, mastitis, from one cow to another. Some farmers have
devised their own ways to disinfect the clusters between cows.
Herringbone milking parlours
In herringbone milking sheds, or parlours, cows enter, in single file, and line up
almost perpendicular to the central aisle of the milking parlour on both sides of a
central pit in which the milker works (you can visualise a fishbone with the ribs
representing the cows and the spine being the milker's working area; the cows
face outward). After washing the udder and teats the cups of the milking
machine are applied to the cows, from the rear of their hind legs, on both sides
of the working area. Large herringbone sheds can milk up to 600 cows efficiently
with two people.
Swingover milking Parlours
Swingover parlours are the same as herringbone parlours except they have only
one set of milking cups to be shared between the two rows of cows, as one side
is being milked the cows on the other side are moved out and replaced with
unmilked ones. The advantage of this system is that it is less costly to equip,
however it operates at slightly better than half-speed and one would not
normally try to milk more than about 100 cows with one person.
80-stand rotary dairy that is fully computerised and records milk production
Rotary milking sheds
Rotary milking sheds (also known as Rotary milking parlor) consist of a turntable
with about 12 to 100 individual stalls for cows around the outer edge. A "good"
rotary will be operated with 2432 (~4850+) stalls by one (two) milkers. The
turntable is turned by an electric-motor drive at a rate that one turn is the time
for a cow to be milked completely. As an empty stall passes the entrance a cow
steps on, facing the centre, and rotates with the turntable. The next cow moves
into the next vacant stall and so on. The operator, or milker, cleans the teats,
attaches the cups and does any other feeding or whatever husbanding operations
that are necessary. Cows are milked as the platform rotates. The milker, or an
automatic device, removes the milking machine cups and the cow backs out and
leaves at an exit just before the entrance. The rotary system is capable of
milking very large herdsover a thousand cows.
Automatic milking sheds
Automatic milking or 'robotic milking' sheds can be seen in Australia, New
Zealand, the U.S., Canada, and many European countries. Current automatic
milking sheds use the voluntary milking (VM) method. These allow the cows to
voluntarily present themselves for milking at any time of the day or night,
although repeat visits may be limited by the farmer through computer software.
A robot arm is used to clean teats and apply milking equipment, while automated
gates direct cow traffic, eliminating the need for the farmer to be present during
the process. The entire process is computer controlled. [11]
Supplementary accessories in sheds
Farmers soon realised that a milking shed was a good place to feed cows
supplementary foods that overcame local dietary deficiencies or added to the
cows' wellbeing and production. Each bail might have a box into which such feed
is delivered as the cow arrives so that she is eating while being milked. A
computer can read the eartag of each animal to ration the correct individual
supplement. A close alternative is to use 'out-of-parlour-feeders', stalls that
respond to a transponder around the cow's neck that is programmed to provide
each cow with a supplementary feed, the quantity dependent on her production,
stage in lactation, and the benefits of the main ration
The holding yard at the entrance of the shed is important as a means of keeping
cows moving into the shed. Most yards have a powered gate that ensures that
the cows are kept close to the shed.
Water is a vital commodity on a dairy farm: cows drink about 20 gallons (80
litres) a day, sheds need water to cool and clean them. Pumps and reservoirs are
common at milking facilities. Water can be warmed by heat transfer with milk.
Temporary milk storage
Milk coming from the cow is transported to a nearby storage vessel by the
airflow leaking around the cups on the cow or by a special "air inlet" (5-10 l/min
free air) in the claw. From there it is pumped by a mechanical pump and cooled
by a heat exchanger. The milk is then stored in a large vat, or bulk tank, which is
usually refrigerated until collection for processing.

Dairy Development Programs: Benefits and Risks for Smallholders -

The Case of Andhra Pradesh, India

Andhra Pradesh is one of the agriculturally most advanced states in India

but still has high levels of rural poverty. Mixed crop-livestock farming is
the predominant farming system practiced by over 80 percent of rural
households in the state. Bovines account for about 40 percent of the
livestock population and milk is one of the most important products of
cattle and buffalo enterprises, contributing over half of the value of total
livestock output of the state. Andhra Pradeshs milk is produced by 5
million dairy farmers, most of which own less than 2 hectares and 1 to 4
dairy animals.

Although milk production has shown remarkable growth in Andhra Pradesh

over the past decade, the potential role of dairy farming as a means to
improve household incomes and create rural employment is far from being
fully exploited. For the dairy sector to play a more prominent role in rural
development there is an urgent need to devise dairy development
programs that are affordable for and have significant impacts on the key
production and financial parameters of the predominantly small farms that
are typical for the region.
Current Situation of Dairy Farmers in Andhra Pradesh

Incomes of dairy households range from 1,000 to 4,000 US$ per year. The
share of off-farm income is relatively high for small farms (80 percent) and
decreases with increasing size of farm holding. This clearly indicates that
poor, often landless farm households are mostly part-time farmers.

Total returns (cash and quantifiable non-cash benefits) per 100 kg milk
range from 18 to 27 US$. Farmers however incur total costs of 16 to 38
US$ per 100 kg milk, when family labour (imputed at local wage rates),
land and capital are included. This means that only a minority of farms
make an entrepreneurial profit. On the other hand, if family labour is
excluded from the calculation, all farms achieve a net dairy income of 5 to
10 US$ per 100 kg milk. Due to the lack of better alternative uses of their
production factors, these returns to dairy production are sufficient for
these small farms to keep operating.

Returns to labour are inversely correlated to the cost of milk production.

While large farms (10 to 15 animals) achieve returns to labour that are
much higher than the local agricultural wage rate, on the smaller farms
returns to labour are around half of the local wage rate.

Observed variation in performance of smallholder dairy farms, however,

indicates that there is significant potential to improve livestock productivity
in these production systems by improving breeding, feeding and herd
management, thereby increasing the economic viability of the dairy
enterprise.

At the farm level, initiatives that provide incentives to farmers to keep

more productive animals without compromising their ability to work off-
farm will be a necessary precondition to enhance dairy development in the
region. This will entail devising dairy development strategies that
are labour-saving, require little investment and are of low risk.

Ex-Ante Assessment of Dairy Development Programs

Although large dairy farms represent a profitable enterprise in Andhra

Pradesh, the vast majority of smaller farms are economically unattractive
and would disappear as soon as farmers have better alternatives. This
critical situation of small-scale farms persists in spite of numerous dairy
development activities long in existence in the state. Therefore, the farm-
level impact of over 40 potential dairy development interventions covering
feeding, breeding, animal health and milk marketing on a typical 3-buffalo
farm was assessed through an iterative process that combined detailed
household and farm simulation with expert and farmers opinions and
feedback. Several of the most promising interventions were combined to a
Dairy Development Ladder to assess whether the dairy competitiveness
of small farms can be brought up to that of the larger farms.

The assessment paid particular attention to the risks associated with each
of the programs by introducing stochastic variables into the simulations,
and thus also provided estimates of probabilities of the programs leading
to specified results.

Likely Program Impacts on Dairy Income

The ex-ante assessments reveal that most interventions indeed raise dairy
income and returns to labour, decrease the cost of milk production and
increase the likelihood of achieving selected thresholds for the above
parameters, thereby reducing the risk inherent in dairy farming. For
example, improved animal feeding is likely to increase the return to dairy
labour by an impressive 145 percent, lifting it above the regional wage
level for unskilled labour, while reducing the risk of falling below the
current level of returns from 0.45 to around 0.15. This implies that
whichever family member stays on the dairy farm, (s)he is likely to obtain
a higher notional wage than the family members working off-farm. With
such an attractive outcome the question of why not more farmers are
adopting better animal feeding practices arises.

The ex-ante assessment of the Dairy Development Ladder shows that

smallholder dairy farms have the potential to become competitive milk
producers, reduce the risk inherent in farming and substantially improve
household income. As a consequence of the sequence of interventions the
farm develops in a gradual manner, which should present a realistic
development path, as it draws on regional expertise and builds on local
cases of competitive milk producers.
The Importance of Risk and Diversification

Several factors may be the reason for the low adoption of dairy
improvement programs: (a) the low overall impact on household income;
(b) the risk associated with specialization in dairy and (c) the higher
requirement for working capital.

The dairy enterprise contributes 0.13 US$ or 16 percent to the daily per
capita household income. Consequently, even the most promising dairy
interventions are only expected to increase per capita household income
by 27 percent, whilst they require substantial changes in farm
management. Genetic improvement of their dairy animals was provided by
farmers as an example of how they would have to stop grazing in public
land and replace paddy, their main staple food, with green fodder, while
still producing for a very unreliable market (milk vendors) or for a non-
remunerative milk price (from the cooperative), a risk they do not consider
worth taking.

Farmers participating in this study were not only highly risk averse but
they were also reluctant to make optimistic assumptions about
framework conditions for dairying such as more or better access to water,
working capital, health services and a remunerative and reliable milk price.
Smallholder farmers universally agreed that without the above conditions
in place to diminish or eliminate their risk in adopting new technologies,
they would not subscribe to the main dairy development programs on
offer, in spite of their obvious potential benefits.

Implications for Dairy Development Programs

It is well-known that resource-poor farmers are, by necessity, risk

avoiders. Therefore, dairy development programs must simultaneously
improve the financial performance as well as the risk profile of the
targeted farms.

Dairy development programs are not normally conceived to

comprehensively address a wide range of factors, which however
determine their adoption and success. Undoubtedly, it is questionable
whether it would make practical sense for any one program to tackle all of
the identified issues, but a promising approach could be to forge strategic
partnerships among existing programs which are likely to have strong
complementary effects.

The need for one program to partner and build on another is evident in the
Dairy Development Ladder. The results indicate that, gradually effective
partnerships, among various programs and with the farming community,
can effectively lift small dairy producers out of poverty through a
competitive dairy farming business, which provides not only an excellent
wage level under local conditions, but which is also well-positioned against
international competition in a global economy.

Dairy Entrepreneurship Development Scheme

Dairy Entrepreneurship Development Scheme is a Government of India

sponsored scheme to provide financial support to entrepreneurs to start
dairy and allied business. This scheme has come into effect from
1stSeptember, 2010.

Objectives

To promote setting up of modern dairy farms for the production of clean

milk,

To encourage heifer calf rearing thereby conserve good breeding stock,

To bring structural changes in the unorganized sector so that initial

processing of milk can be taken up at the village level itself,

To bring about up gradation of quality and traditional technology to handle

milk on a commercial scale,

To generate self-employment and provide infrastructure for unorganized

sector.

Activities covered and indicative unit costs:

Small dairy farms: Cross bred cows, Indigenous descript breeds and
Graded buffaloes (up to 10 animals): Rs.5 lakh,

Vermi-compost (with milch animals unit): Rs 20,000/-

Heifer calf rearing- upto 20 calves - Rs 4.80 lakh

Purchase of milking machines/ milk testers/ bulk milk coolers (upto 2000
liter capacity)- Rs.18 lakh

Indigenous milk products manufacturing units- upto Rs.12 lakh

Dairy product transport facilities and cold chain - Rs. 24 lakh

Cold storage for milk/ milk products: Rs. 30 lakh

Private veterinary clinic: Rs.2.4 lakh - Mobile Units, Rs.1.80 lakh -

Stationary Units

Dairy parlour: Rs 56,000/-

Eligibility to get loan

Any Farmers, individual entrepreneurs, NGOs, companies, groups of

unorganized and organized sector etc.

Scheme funding/ Pattern of Investment

Entrepreneurs Contribution:10% of total outlay- minimum

Back ended capital subsidy:25% (33.33% for SC/ST beneficiaries) of total

outlay, subject to a ceiling

Cold storage for milk/milk products: Rs.30 lakh.

Banks share: Balance portion- Minimum 40%.

Implementing Institutions: Department of Animal Husbandry Dairying and
Fisheries, Government of India is the focal department for the scheme.
NABARD is implementing this scheme through Commercial Banks, State
Cooperative Banks, SLDBs Regional Rural Banks and other agencies eligible
for refinance from NABARD.

PROJECT COST & MEANS OF FINANCE

(Rs in lacs)
Particulars Amount Particulars Amount
Land Own Capital 42.96
Sheds construction 60.96 Term Loan 102.00
Animals & other 80.00
expenses
Working capital 16.00 Working capital 12.00
loan
156.96 156.96

DETAILS OF INDIVIDUAL HEADS OF PROJECT COST

Land : The promoter is proposing to start the Farm in his own land 4.00 acres
and for the dairy and to cultivate the green grass on them at Anavaram Village,
Badigi Mandal, Vizianagaram (Dist). The location is sufficient for proposed and
future requirement unit and is very ideal for the farm.
Shed Construction :

On the above said land, the firm will construct buildings including sanitation
and water supply. The estimated civil works is below.
S.NO PARTICULARS AMOUNT
1 Cattle shed to house 100 yielding buffaloes @ 180 36,00,000
sq.ft. Per animal with asbestos roof 9000 sq.ft. @
Rs. 800/- sq.ft
2 Calf cum Heifer shed to house Buffalos @ 25 sq.ft
per animal with Asbestos roof 320 sq.ft @ Rs.
600/sq.ft 96,000
 4 Store room-400 sq.ft @ Rs. 800/sq.ft 1,60,000
5 Labour shed-1600 sq.ft ( 400 sq.ft x 8) @ Rs. 6,40,000
800/sq.ft
6 Cost of Electrification 1,00,000
7 Compound wall and fencing 5,00,000
8 Bore well with motor & Over head Tank. and hose 4,00,000
pipe (4.nos)
9 Cost of small equipments like chains, measuring 6,00,000
vessels , buckets, Cutter
Total 60,96,000

Cost of Animals and Equipments

1 Cost of 100 graded buffaloes @ 60,000 lactation age 60,00,000

yielding 10 liter/day including transportation
2 Insurance @4% per animal. 2,40,000
3 Milking Machine. 80,000
4 Chaff Cutter machine 10,000
5 Milk Cans 80,000
6 Chilling plant 16,00,000
TOTAL 80,10,000

Working capital for 3 months

Insurance charges 4,50,000

Labour charges 50,000
Cost of concentrate Feed 3,50,000
Cost of green fodder 2,50,000
Cost dry fodder 1,75,000
Veterinary Aid 3,00,000
Eleectrical charges 20,000
Mise Expenses 20,000
16,15,000
 DETAILS OF INDIVIDUAL HEADS OF MEANS OF FINANCE

Share Capital :

The share capital of the promoter is Rs. 42.96 lakhs. The promoter
contribution works out 25% of the project cost.

Term Loan :

The farm desires to avail term loan of Rs. 102.00 lakhs, to meet part cost of
the project of Rs. 156.96 lakhs which works out 64.98% of the project. The term
loan will be paid in 28 quarterly installations with holiday of six months.

UTILITES AND SERVICES

Water :

The total water requirement of the unit is 6000 litres per day for
watering/refilling of husks sanitation and domestic for which required bore-well
and water supply is also provided in the project.

Power :

The total power requirement by the unit is 5 HP which comes under L.T.
Connection.
TRANSPORTATION :

The location is well connected by Road (Dist). It is about 20 Kms from

Vizianagaram So there is no problem for transport the raw materials as well as
well as Milk.

MAN-POWER:

The Firm will employ 12 both skilled and unskilled workers. All the persons
will requite locally.

TECHNICAL FEASIBILITY FOR 100-GRADED MILCH ANIMAL PROJECT

Dairy farming is on of the most important source of income for urban,

semi-urban and rural areas. This is because of very high demand for milk and
milk products. The composition of milk is as follows.

Species Fat % Protein % Lactose % Ash % Total Solids

%
Jersey cow 5.5 3.9 4.9 0.70 15.0
Buffalo 7.4 3.8 4.9 0.78 16.8

The total milk production in the country for the year 2001-02 was estimated at
82.6 million metric tones. At this production, the per capital availability was to be
226 grams per day against the minimum requirement of 250 grams per day as
recommended by ICMR. Thus, there is a tremendous scope/potential for
increasing the milk production. The population of breeding cows and buffaloes in
milk over 3 years of age was 62.6 million and 42.4 million, respectively (199
census The per capita availability of milk at present is 216 gms/day as against
the minimum requirement of 250 gms/day as recommended by Indian council of
medical research.

A recent survey conducted by Visakha Dairy and Dolphin Dairy has

revealed that there is demand for fifteen lack liters per day in Visakhapatnam
city alone, whereas the availability of milk is only 9 lack liters.. Further, the
demand is increasing day -by-day on account of large-scale urbanization and
increasing population.

situated 20 km from Visakhapatnam and 25 kms from Vizianagaram ,.. So

there is no problem for marketing of milk.
1. Land :
Land is available for construction of shed and also for grazing of animals.
Land is well connected to road
2. Electricity:
Electricity connection is available on the site of farm.

3. Water Facility:
Water is available in ample amount for routine work and for irrigation of
land.

4. Labour:
Labour is available on chief rate through out the year itself in the village.

5. Construction of Shed:
For Construction of shed high and well-drained land is available. The site is
away from wother logging area and also nearer to road.

6. House Keeping Management:

For housing of animal tail to tail system is used. The shed constructed like
this manner-The wall
of shed should be 5 feet high. The roof should be 10-12 feet high. A floor
area of 25 sq.ft per calf and 60 sq.ft per buffalo is provided 2 feet
broad drain at the rare of standing. The floor is pucca and non slippery by
using grits. The asbestos roof should be used.

7. Breed of animals:
A. Buffalo-Graded with 10 liter milk/day

Very good animal with a minimum Potentiality of 10 liters per day (for
Buffaloes)) and which are in second lactation be purchased under expert
guidance of Veterinary Doctor and Bank Officer.

.
Feeding Management:
Feed can be grown on farm itself with a 7 acre irrigated land.

The following feed will be used -

a) Dry fodder: Chaffed Jower dry fodder (Kutti)
b) Green Fodder; the green grown on own land of 6 acres. The
following crops grown
Hybrid Napier-N B2
Luceme-Selection No.9
S.S.C. 9 Multi Cut jowar
African Maize
SOO_Subabul trees on the bunds and other uncultivable land.
c) Concentrate Mixture: Proposed Dairy Provide concentrate mixtures. 5kg.
Concentrates like crucial grains, De Oiled Cakes, Beans, Ground Nut Cake,
Cotton Cake prepared. The concentrates mixture thoroughly in Kutti and
given to animal with a gap of 3-4 hours daily.

Breeding of Animal:
The Productive efficiency of next generation depends on breeding practices
so careful breeding practices being used by Artificial insemination Method.
Dairy animal came to heat at an interval of 17 to 24 days with an avg. of
21 days. The duration of estrous ranges between knows about the heat
symptoms and they daily inspect animal at early mornings and late
evening hours. Veterinary facility available for A.I. Accurate Records of
maintenance of health variations, date of service and pregnancy
conformation made by qualified Veterinary Doctor.

10. In Alamanda primary Veterinary aid clinic is functioning, the unit

visited by veterinary in case of emergency cases like Dystokia, Retention of
Placenta, Anoestrous, repeat breeding cases, for A.I the borrower know
the importance of vaccination. All vaccination programmed, deforming
made by borrower know the importance of vaccination. All vaccination
programmed, de worming made by borrower under suggestions of the
experts. The main objective is to maintain wet, ration of 75:25

11. Health Care:

The proposed dairy unit is having telephone facility for immediately
reporting to veterinarian in case of emergency. All the routine medicine
like Skin ointments, Tincture of Iodine, turpentine oil, cotton, Antibiotic,
Allergy drugs kept at the farm. All vaccination pro gramme for Foot and
mouth Disease, Black quarter, Hemorregic Septisemial etc.
Undertaken regularly and skin test for T.B. And Brucellosis must be
undertaken under expert guidance of veterinary doctor.

12. General Management Practices:

The animal and cattle shed thoroughly cleaned every day morning and
evening, with disinfectants. The manure disposal will be kept away from
shed. Proper feeding daily 3 times and before milking animal washed with
water and also used potassium per magnate for cleaning under. Hand
Milking is done.

Milking:
Machine milking system used. Milking is done, twice daily i.e. Morning
evening.

14. Marketing of Milk:

Alamand Village situated 30 Km from visakhapatnam, 25 kms from
Vizianagaram. So there is no problem for marketing of milk.

15. Identification of Animal:

 For Identification of animal ear tagging method used.

16. Insurance:
All animal insurance is done @ 4% cost of animal. It may change from
time to time.

17. General:
5 acres of irrigated land is available with promoters for raising fodder grass
and fodder trees. The entrepreneurs are having family history of
rearing of dairy animals since generations. Facility like water,
electricity and transport are available at the proposed farm site.
The entrepreneur also gained experience in marketing dairy and dairy
products.
Project at Glance

1 Unit Size 100Animals

2 Breed 100 Graded Buffalo
3 Name of Borrower Suresh
4 Location of Farm Dairy Farm
5 Margin Money (Rs) 44,96,000
6 Bank Loan (Rs) 100,00,00
7 Interest rate (%)
8 Repayment period 7 years including 6 month gestation
period
9 Inspection Once in a month by the Branch
10 BCR at 15% DF 2.10
11 IRR (%) >50%

Feed and Fodder Requirements of animals per day

Green Fodder Dry Fodder Concentrates

Lactating buffaloes 60 Kg 08 Kg 08 Kg
Dry buffaloes 40 Kg 12 Kg 04Kg

Particulars Rate Rs. / KG Milking CBC Dry Cows

Kg Kg
Cost Cost
Green Fodder
Dry Fodder 3.00 08 12
12 18
Concentrates 12.00 08 04
48 24
Total Rs./day 6
0 42
Expenditure Cost
Total Expenditure I II III IV V VI
Cost of feeding dry 4.04 5.16 4.14 4.96 4.96 4.93
fodder during
lactating days
Cost of Feeding dry 0.52 1.40 1.40 1.40 1.40 1.40
fodder during dry
period
Cost of feeding 0.68 0.90 0.70 0.82 0.82 0.82
concentrates during
lactating days
Cost of feeding 0.20 0.20 0.20 0.20 0.20 0.20
concentrates during
dry period
Veterinary aid 0.60 0.60 0.60 0.60 0.60 0.60
&breeding cover @
Rs. 300/animal
Cost of Labour 6 3.60 3.60 3.60 3.60 3.60 3.60
labour/day @
Rs.100/day
Cost of electricity 0.24 0.24 0.24 0.24 0.24 0.24
&water
Miscellaneous 1.20 1.20 1.20 1.20 1.20 1.20

Total Expenditure 11.08 13.30 12.08 13.02 13.02 13.02

milk sold at a price of Rs.18.00/liter ( Yield 12 liter/day)

Sr.No Particulars Years

I II III IV V VI
a) Location Days
b) 60 buffaloes 13,500 17,250 13,800 16,500 16,500 16,500

Income Statement
(Value in lacs.)

Particulars I II III IV V VI
Milk 58.32 58.32 58.32 58.32 58.32 58.32
Sale of Gunny bag@ Rs. 0.20 0.20 0.20 0.20 0.20 0.20
6/bag
Sale of manure @ Rs.500/ 0.30 0.30 0.30 0.30 0.30 0.30
animal
Total Income 58.82 58.82 58.82 58.82 58.82 58.82
NOTE: The calves and heifers were not included in the income
Gross Profit

Total 58.82 58.82 58.82 58.82 58.82 58.82

Income
Total 11.08 13.30 12.08 13.02 13.02 13.02
Expenditur
e
Gross Profit 47.74 45.52 46.74 45.80 45.80 45.80

Net Profit

Gross profit 47.74 45.52 46.74 45.80 45.80 45.80

Bank
interest 13.37 12.83 10.69 8.55 6.41 4.27
Insurance 2.00 2.00 2.00 2.00 2.00 2.00
Adm 1.20 1.20 1.20 1.20 1.20 1.20
Expenses
Depreciatio
n 26.10 20.49 16.19 12.88 10.33 8.35
Net Profit 5.07 9.00 16.66 21.17 25.86 29.98

REPAYMENT SCHEDULE

Capital Investment (Rs.)- Rs 156.96 Lacs

Borrower Margin (Rs.)- Rs 44.96 Lacs

Bank Loan (Rs.)- Rs 100.00 Lacs

Interest Rate (%)- Rs %

Average DSCR=

The following technical aspects to be taken care of-

All concerned to the following aspects must pay special Attention for:
Shed must be constructed on a high and well-drained land.
A separate shed for, buffaloes and calf must be constructed.
A suitable arrangement should be made with the Veterinary Doctor consultants to
ensure health of animals and in case of emergency.
It is proposed that cow yielding 12 liters and liters of milk every day should buy from
market having good pedigree record or buy animals after 2-3 days after calving yielding
that much of milk.
The purchased animals should be in 2nd or 3rd lactation.
Bank may consider sanctioning of additional working capital to the unit in the event of
the unit running successfully and want to increase the number of animals for more milk
production.
RECOMMENDATIONS

The scheme as described above is considered to be technically feasible and

economically viable.
Hence, it is recommended for sanction of the scheme on the lines of the lending
and other norms as suggested in the scheme and as per bank's other usual
systems and procedures.

The applicant is credit worthy and trust worthy is having experience in this field . The
applicant is offering collateral security 1.22 acrs and residential building market value
will be around Rs 60.00 lacs per acr,

Keeping in view of the above, technical and finance perimeters, tie past dealing of the co
obligant and the value of the security offer, we recomend for sanction of term loan of Rs
57.00 lacs, repayable in 22 quaterly instilments with six months
 TECHNO ECONOMIC PARAMETERS

ii) Cost of milch animals buffaloes @ Rs.40,000

Iii) Lactation period (days) buffaloes -270 days

iv) Dry period (days) buffaloes -90 days

v) Milk yield (its./day) buffaloes -12 lit/day

vi) Sale price of milk (Rs./Lt) buffaloes Rs. 20.00/lit

vii) Sale of manure/animal/year (Rs.) 500

viii) Insurance premium for five years 5%
(%)
ix) Veterinary aid/animal/year (Rs.) 1000
x) Labour (Rs) 6 labour per day @100/day
xi) Cost of electricity &water 1000/month
(Rs./animal)
xii) Interest rate (%) 11.25
xiii) Repayment period (years) 6 years including 6 month
gestation period
xiv) Income from sale of gunny bags
10 bags/tonne @ gunny bag 100
xv) Feeding schedule

Sr.No. Type of fodder/feed Price (Rs./kg) (Quantity in kg/day)

Lactation Period/ Dry

Period
a) Green fodder Cultivated on own land
b) Dry fodder 4.00 4kg x 1.00=04
6kgx1.00=06
c) Concentrate 12.00 4kgx5.00=20 2kg
x5.00=10
Total Rs.24.00