To improve rural credit, the government of India and Reserve Bank of India came up with a committee to study the agricultural credit in India. RBI set up 2 major funds for providing the loans to state governments and cooperative banks.

It was difficult for RBI to focus on agricultural finance so the RBI delinked itself from Agricultural finance and on July 12, 1982, the NABARD came into existence.

The 3 institutions such as Agricultural Refinance and Development Corporation, Agricultural Credit Department, and Rural Planning Credit Cell of RBI were merged with NABARD. The initial capital was Rupees 500 Crores. In March 2015 the capital was increased to Rupees 5000 Crores out of which Rupees 4980 Crores was from Central Government and 20 Crores from RBI.

Thus NABARD controlled funds that were provided by RBI to state government and cooperatives bank. NABARD was set up not only for rural development but also for agricultural finance.

Objectives of Nabard scheme

  • It provides refinance options to rural and agricultural needs. Also provides finance and assistance to small-scale industries.
  • It coordinates with state governments to provide agricultural finance
  • It is responsible for increasing small and minor irrigation activities by way of promotions to agricultural activities.
  • It also conducts research and development activities in rural industries and agricultural activities.
  • It contributes to agricultural production by way of contribution to the capital of agricultural industries.
  • There are 3 main heads under NABARD those are as follows,
  • Promotional function
  • Credit function
  • Development function.

How to apply online for Nabard loan for dairy farm

NABARD subsidy for dairy farming can be got by following the steps below,

  • Decide on the business models for the dairy farming business
  • Choose one of the business models of dairy farming to take subsidy for that model from NABARD.
  • Register your company or business with the government
  • Prepare a detailed business plan for the bank loan
  • Submit a request for a bank loan to any regional rural bank or commercial bank or state agricultural cooperative and rural development bank, state cooperative bank, or other institutions that are eligible for refinancing from NABARD.
  • Once the bank sanctions the bank loan, the promoter would have to implement the project with his contribution amount.
  • Bank would have to apply for a subsidy from NABARD for dairy farming after the loan is disbursed
  • NABARD would release the subsidy to the bank. The bank would hold the subsidy in the account called “Subsidy Reserve Fund Account” with no interest.
  • On satisfactory servicing of the loan, the subsidy amount will be adjusted from the subsidy reserve fund account.

Eligibility criteria for Nabard loan for dairy farm

NABARD has provided a subsidy scheme for farmers involved in dairy farming. Financial support is provided by dairy farmers in the form of government subsidies. This helps new individuals and farmers to set up their dairy farms and run their business. These subsidies are in the form of medicines, subsidized seeds, equipment, and veterinary services.

NABARD’s dairy farming scheme has the following objective they are as follows,

  • To generate self-employment and to develop infrastructure for the dairy farming industry
  • To assist the individuals in the production of milk from cows in their dairy farms
  • Develop and promote good breeding stocks such as the heifer calf.
  • To facilitate the structural changes to dairy farming in the village and improvise the initial milk processing to the production level in the village
  • To facilitate the modern equipment and technology for dairy farming
  • By the way of producing the various dairy products from the milk such as Ghee, Butter, Curd, Paneer, and Cheese at the production level.

The eligibilities of the farmers to avail subsidy for dairy farming from NABARD are as follows,

  • The individuals, farmers, organized and unorganized groups can avail subsidies. The dairy farming subsidies are also available for the Panchayati raj institutions, dairy cooperative society, milk federations, and milk unions can avail these facilities.
  • The above individuals can avail of subsidy but only once through the various groups listed above.
  • Member belonging to the same family can avail of this subsidy by the way of setting up another dairy farm which needs to be separated at least by 500 meters from the existing farm.

Documents required Nabard loan for dairy farm

The documents required for the dairy farm loans from NABARD are as follows,

  • Copy of Business plan
  • Caste Certificate
  • Identity card
  • If the loan is above 1 lac, then the borrower has to mortgage some land papers of his land.


In this article, we have discussed how you can process loans and subsidies for dairy farming from NABARD. There are various schemes in NABARD for processing loans and subsidies for dairy farming. Get ready and talk to the nearest NABARD authorized bank for the loans. Happy Dairy Farming!!!