The Indian government is contemplating a move to permit cooperatives in animal husbandry, dairying, fish, and poultry to directly borrow from banks beyond just the National Bank for Agriculture and Rural Development (Nabard). This proposed action involves merging two funds, the Animal Husbandry Infrastructure Development Fund (AHIDF) and Dairy Processing and Infrastructure Development Fund (DIDF), and is anticipated to be announced in the upcoming interim budget with an estimated outlay of around ₹29,000 crore, covering the subsidy component for three years up to 2026-27.
Currently, cooperatives can only access loans from Nabard, the apex bank for the agriculture sector. The merger aims to simplify administrative processes for future loans, providing cooperatives with the ability to borrow directly from banks. This initiative follows the extension of the AHIDF’s term for an additional three years, following its initial expiry.
The AHIDF, approved by the Cabinet in June 2020 with an outlay of ₹15,000 crore, incentivizes investments in infrastructure for dairy and meat processing, encouraging the establishment of animal feed plants in the private sector. Eligible beneficiaries include farmer producer organizations, micro, small and medium enterprises, non-profit organizations, private companies, and individual entrepreneurs.
Similarly, the DPIDF, launched in 2017, focuses on creating and strengthening milk processing, value addition, and chilling facilities for various entities involved in the dairy sector. With an outlay of ₹11,184 crore, it aims to enhance milk production and processing capabilities.
The proposed merger and extension of these funds under AHIDF will allow cooperatives across animal husbandry, dairying, fish, and poultry to borrow directly from banks, alongside the existing Nabard route.
Additionally, the government is considering potential adjustments to the Rashtriya Gokul Mission (RGM), focusing on the development and conservation of indigenous bovine breeds and boosting milk production. The aim is to incorporate technology more aggressively, especially for indigenous breeds, and ensure that the benefits of the program reach farmers effectively. The government believes that these initiatives, coupled with RGM enhancements, will contribute to increased production and productivity in the agriculture sector.
