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DOODH GANGA YOJANA

DOCUMENTATION OF BEST PRACTICE

MARCH 2011

Researched and Documented By:

OneWorld Foundation India

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Table of Contents Executive Summary.......................................................................................................................................................3 Background ...................................................................................................................................................................4 Objective .......................................................................................................................................................................5 Working Design .............................................................................................................................................................5 Methodology .................................................................................................................................................................7 Key Stakeholders...........................................................................................................................................................7 Lessons Learned ............................................................................................................................................................8 Appendix a .............................................................................................................................................................9

EXECUTIVE SUMMARY
India is the world's largest milk producing country with production of 108.5 million tons of milk during 2008-09 alone1. Milk production involves more than 70 million producers in India2 . The demand for milk is projected to rise to 180 million tonnes by 20213. The dairy sector offers good self employment opportunities that have rightly been exploited by the Self Help Groups formed in large numbers in the past few years and these ventures have mostly been successful in India. Studies have shown that majority of the Indian farming households are involved in milk production as a subsidiary occupation along with farming. Higher production potential and sustainability component make it a good model for ensuring rural prosperity. However the commercial aspects of daily farming has always been plagued with many deficiencies such as lack of adequate fodder and feed sources, non availability of quality milch animals, lack of awareness about scientific animal management, pricing issues, lack of proper marketing outlays and so on. In this background, the Doodh Ganga Yojana was crafted by the Government of Himachal Pradesh. The Doodh Ganga Yojana is aiming to devise dairy farming effective and easy and thereby making it a viable and profitable self employment venture. It was started by Government of Indias Department of Animal husbandry as dairy venture capital scheme to be implemented through National Bank for Agriculture and Rural Development (NABARD). The scheme aims to transform micro enterprises engaged in dairy farming into organised dairy business enterprises. Doodh Ganga Yojana plans to economically uplift 50,000 rural households through formation of 10,000 Self Help Groups within a span of three years. The scheme makes comprehensive provisions to take retailing of dairy products in a large scale. The primary objective of the scheme was to create an alternative means of livelihood for the local population. The secondary objective was to call for a white revolution through the successful implementation of the scheme. Under the initial phase of Doodh ganga Yojana, loans were provided to Self Help Groups and even to individuals to set up dairy units of 10 animals in each, with a total cost of rupees 3 lakh
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Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India, http://www.nddb.org/statistics/milkproduction.html.
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National small industries corporation, http://www.nsic.co.in/schemes/documents/projprofiles/DAIRYpercent20FARMING.pdf

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http://www.meattradenewsdaily.co.uk/news/060910/india___joint_dairy_farm_venture_.aspx

4 per unit. The second phase of the scheme switched over from free loan scheme to capital subsidy scheme. The second phase would provide the beneficiary a 25 percent back end capital subsidy on the total project cost. For Scheduled Caste and Scheduled Tribe beneficiaries it would be 33.33 percent capital subsidy. Overall, the scheme is successful in uplifting economic status of the rural population who was earlier living on solely on agriculture produced. Doodh Ganga Yojana has supported 2531 cases so far. Out of the proposed 300 crore target, loans to the tune of 50 crore are already advanced to the beneficiaries. With the Yojana being implemented successfully, it is expected to increase milk production in the state by 350 lakh litter per annum with an average yield of 5 liters per day per animal for 200 days in a year.

BACKGROUND
Agriculture being the largest economic sector in India employs 52.1 percent of the total workforce4. However, the agriculture sector is not being able to be the most profitable and reliable sector in India. The vulnerability of tropical monsoon climate, partial failure of land reforms in many states, inconsistent government policies, over-regulation resulting in increasing cost, price risks and uncertainties, lack of adequate irrigation and modern techniques are affecting agriculture productivity in India. In this scenario, the contribution of dairy farming for the welfare and empowerment of the people is huge. The rural population is largely dependent on live stocks in India. The state government of Himachal Pradesh acknowledged the importance of dairy farming and developed the Doodh Ganga Yojana with provisions of interest free loans and subsidies encouraging the local communities to take up dairy farming as a stable and sustainable source self employment. Prior to Doodh Ganga Yojana, milk production in the state was considerably low. The state had to import milk regularly from Punjab and Haryana. This situation indicated that the internal market needs milk from local sources at reasonable prices. The commercial aspects of daily farming was also plagued with many deficiencies such as lack of adequate fodder and feed sources, non availability of quality milch animals, lack of awareness about scientific animal management, lack of health care facilities, pricing issues and so on. The Doodh ganga Yojana was formulated to address all these issues pertaining to dairy development. The state government is implementing the scheme through Self Help Groups which also accomplishes the responsibility of the state governments to form women self help groups in the state and to provide them with training to explore self employment opportunities. The scheme was launched in Himachal Pradesh on 25 September2009.
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Economic Survey 2010, p. 180

OBJECTIVE
The primary objective of the scheme was to create an alternative means of livelihood for the local population who mainly rely on agriculture and farming. The secondary objective was to call for a white revolution through the successful implementation of the scheme.

WORKING DESIGN
The Doodh Ganga Yojana, launched in September 2009 in Himachal Pradesh, mainly has worked under two schemes. The first scheme was that of partial interest free loans and the second scheme that is currently operational, provides capital subsidy to the beneficiaries.
Doodh Ganga Yojana

Venture Capital Fund Scheme

Dairy Entrepreneurship Development Scheme

The time period of the first scheme, that is the Venture Capital Fund Scheme, span across September 2009 to August 2010. The second phase of Doodh Ganga Scheme, that is the Capital Subsidy scheme that started in September 2010, is currently operational in Himachal Pradesh. Under the Venture Capital Fund Scheme of Doodh Ganga Yojana loans are provided to Self Help Groups and also to individuals to set up dairy units of 10 animals with a total cost of rupees 3 lakh. The scheme provides 50 percent interest free loans and the entrepreneur is required to spend only ten percent margin money. On regular payment of loan, 50 percent subsidy is provided on the total interest payable on the net loan component. The Venture Capital Fund Scheme was revised in August 2010. The new scheme named Dairy Entrepreneurship Development Scheme provides the beneficiary a 25 percent back end capital subsidy on the total project cost. For Scheduled Tribe and Scheduled Caste beneficiaries it is 33.33percent capital subsidy. The beneficiary has to run the scheme for 2 to3 years to be eligible to avail subsidy on it. This step was taken to check diversion and misuse of funds. There are 9 components of dairy development that can be financed under the Doodh Ganga Yojana. These are:

6 1. 2. 3. 4. 5. 6. 7. 8. 9. Establishment of small dairy units that have up to 10 animals, Rearing of heifer calves, Vermin-compost (with milch animal units), Purchase of milking machines, milkotester (milk analyser), bulk milk cooling units up to 2000 liter capacity, Purchase of dairy processing equipment for manufacture of indigenous milk products, Establishment of dairy products, Transportation facilities and cold chain, cold storage facilities for milk and milk products, Establishment of private veterinary clinics and Dairy marketing parlours.

The scheme gives loan of up to rupees15 lakh for setting up of machines and coolers for the purpose of milk production and conservation. For the transportation of dairy product a loan of 25 lakh is availed under the scheme. Loan ranging from rupees 1.2 lakh to 4.8 lakh are given for purchasing cattle and to set up another animal husbandry venture. The Doodh Ganga Yojana started by Government of Indias Department of Animal Husbandry is executed through NABARD along with supports from district administration, Milk Federation of Himachal Pradesh, and other banks. NABARD has been supporting the process of collection, preservation and processing of the milk. Self Help Groups are assisted by NABARD to form their own federations to procure milk and process it. Each federation is processing 10 quintals of milk, pasteurising and selling it in the market. NABARD is also helping in establishing processing unit for cottage cheese (paneer) and curd. Milk Federation of Himachal Pradesh sets up rural marketing network for milk products. The Department of Animal Husbandry provides assistance to the beneficiaries to purchase suitable breeds of cattle. At the block level, NABARD in association with the Department of Animal Husbandry and Milk Federation and other banks are holding regular awareness camps for the farmers, women Self Help Groups. The director of Animal Husbandry coordinates the scheme at the state level. At district level, the Deputy Commissioner is the chairman of the monitoring committee which works as a nodal agency for the implementation of the project.

7 Effective coordination among different state government departments and NABARD ensures mitigation of shortages in availability of fodder and milch cattle. Training for acquiring and upgrading relevant skills and entrepreneurial abilities are devised in the scheme. Establishment of veterinary clinics is another responsibility carried out by the implementing agencies.

METHODOLOGY
The Governance Knowledge Centre (GKC) research team identified Doodh Ganga Yojana as a best practice because the scheme is being successful in generating subsidiary income for the agriculturist population, especially for women and marginal farmers. The scheme is enhancing milk production in the state as well. The team used both primary and secondary research methods for the preparation of this best practice document. Conducting desk based secondary research, available through online material the team gathered important information on the background, operations and achievements of Doodh Ganga Yojana In order to validate the secondary research findings, the team adopted the interview method to carry out primary research. Responses were obtained from Mr. A.D. Rantoo, Chief General Manager of National Bank for Agriculture and Rural Development (NABARD), Shimla and Dr K. C. Tanta, Senior Veterinary Officer, Department of Animal Husbandry, Shimla on many important aspects of implementation of the programme. The insights obtained were utilised with the desk research to prepare this document.

KEY STAKEHOLDERS
National Bank for Agriculture and Rural Development (NABARD). Department of Animal Himachal Pradesh. District Administration. Milk Federation of Himachal Pradesh. Beneficiaries of the scheme. Husbandry,

LESSONS LEARNED
The Doodh Ganga Yojana is a complete dairy development scheme which is intelligently crafted and all inclusive. It not only financially supports organised dairy farming but also ensures dissemination of adequate knowledge around dairy development such as scientific animal management, availability of animal and fodder and proper veterinary care. Benefits of Dairy Venture:

Dairying is an important source of subsidiary income to marginal farmers. Demand for milk and milk products are ever increasing. Dairy farming does not require huge capital investment or highly skilled man power. Speedy return on investment. Does not depend on climate conditions. By-products are also useful. Manure from animal provides good organic matter. For example: cow dung is used for vermin compost. Rural India has abundant good grazing lands. There is no direct competition from the foreign counterparts.

Financial inclusion of Self Help Groups and even individuals for dairy development NABARD through the Doodh Ganga Yojana has motivated the people in the rural areas in many ways to take up dairy development activities to improve their economic status. The objective of the 300 crore scheme was to finance 10,000 Self Help Groups by extending loan of rupees 3 lakh for each unit. Assistance provided under the scheme is credit linked and subject to sanction of the project by the banks. Under the Venture Capital scheme that was operational from September 2009 to August 2010, a total of 1901 cases were incorporated and loans to the tune of rupees 3619.766 lakh had been advanced5. 630 cases have been incorporated in the ambit of the Dairy Entrepreneurship Development Schemes that is going on since September 2010, with a financial outlay of rupees 12-14 crore. Subsidy of 3.28 crore have been sanctioned so far out of the 32.40 crore laid under the overall budget provision of central government6.
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Primary Data collected through telephonic interview from Chief General Manager, NABARD, Shimla. Data as on 15 March 2011, obtained through telephonic interview from Chief General Manager, NABARD, Shimla.

9 The Doodh Ganga Scheme which envisages embracing 10,000 Self Help Groups within 3 years have already incorporated 2531 in one and a half year. Observing the present momentum, the target of 10,000 Self Help Groups looks fairly achievable. An umbrella scheme for dairy development Doodh Ganga Scheme covers all the possible areas of dairy farming. It makes provisions for development of vermicomposting, milking machines, cold storage facilities for milk and milk products, dairy processing machines and so on. The scheme also facilitates transportation facilities and establishes marketing units for dairy products. The scheme ensures dissemination of scientific knowledge of animal management and proper veterinary care. Loans are given to facilitate all these integral components of dairy farming. The implementation agencies are not only giving loans but also organising various programmes to ensure successful implementation of the scheme. Awareness camps are held to popularise the scheme at the grassroots level. Training is imparted to ensure capacity building and entrepreneurship development for successful dairy enterprising. The dairy units are assisted in milk processing and marketing as well. Thus Doodh Ganga Yojana is creating a gamut of opportunities and avenues for local entrepreneurs to attain self sufficiency and sustainability through dairy development. Social Inclusion The Doodh Ganga Scheme focuses primarily on the empowerment of rural women through formation of Self Help Groups. The active involvement of Self Help Groups and rural women are the main pillars of the scheme. These groups are linked to bank credit to establish dairy development units creating employment opportunities for the rural women. The rural women are slowly learning the processes of banking and stepping ahead in sustainable dairy ventures. All the capacity building activities benefits women as they learn new skills that they have never had the opportunity and resources to acquire. Dairy opens the road to economic as well as social empowerment and self-sufficiency for them. The scheme has special component for the downtrodden sections of the society as well. The Scheduled Tribes and Scheduled Castes get 33.33 percent capital subsidy under the scheme (When it is 25 percent for general beneficiaries) With the Yojana being implemented successfully, it is expected to increase milk production in the state by 350 lakh litter per annum with an average yield of 5 litres per day per animal for 200 days in a year.
Research was carried out by the OneWorld Foundation, Governance Knowledge Centre (GKC) team. Documentation was created by Communications Associate, Ajupi Baruah For further information, please contact Mr. Naimur Rahman, Director, OWFI.

10 APPENDIX A Questionnaire: Doodh Ganga Yojana 1. What was the motivation for Doodh Ganga Yojana in Himachal Pradesh? What was the scenario in which the scheme emerged? (i.e. what was the level of milk production prior to DOODH GANGA YOJANA in Himachal?) 2. The scheme was ushered in to call for a white revolution in the state. Could you please explain the objective/targets of the scheme? (stats if any) 3. What are the major components of the scheme? (giving loans, awareness, camp, marketing unit etc) 4. What is the working design of the scheme? Which office/organisation is primarily responsible for the implementation of the scheme in the state level/ district level? What measures have been taken to popularise the scheme on the ground level? Who is responsible for programme awareness?

5. What has been done for establishing marketing networks for the dairy production? How are the Self Help Groups involved? The scheme aims to uplift rural women. Is there any special provision devised for women? (Like it gives subsidy on fodder seeds to STs and SCs) What are the major achievements of the scheme? No of cases incorporated Amount of loans sanctioned No of (women) Self Help Groups formed No of dairy units increased Increase in milk production And others

6. What are the future goals? Is there any new provision envisaged for the next fiscal year?
REFERENCES

Department of Animal Husbandry, Himachal Pradesh, http://hpagrisnet.gov.in/animalhusbandry/leftlinks/schemes.aspx Dr R. Venugopal, Commercial Dairying, http://www.jivaonline.net/articledrvenugopal.html IndiaEducationDiary,http://www.indiaeducationdiary.in/Himachal_Pradesh/shownews.asp?newsid=7970 NVONews http://nvonews.com/2009/09/25/himachal-launches-rs-300-crore-operation-doodh-gangaproject/ NVONews http://nvonews.com/2011/02/24/himachal-bags-diamond-state-awards-for-best-state/ Orissa Diary http://www.orissadiary.com/Shownews.asp?id=24589