Page 48 - BANKING FINANCE JUNE 2016

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tra high temperature milk ( UHT), paneer , dairy whitener,
ice cream, dahi, butter, baby foods etc . Banks have good
potential in financing such units.
Waste management through establishment of
biogas digesters and compost manure distribution
1) Biogas , which is used as fuel can be produced from
cow dung by Anaerobic digestion with Anaerobic or-
ganism , which digest material inside a closed system,
which is fermentation of biodegradable materials. Be-
sides biogas is used directly as fuel in houses.Biogas
can also be compressed as CBG, the same way natu-
ral gas is compressed to CNG.
Apart from financing individual farmers for setting up
of biogas plant for direct fuel use , financing to a bio
gas bottling plant can be thought of either as a sepa-
rate unit , where supply of cow dung is huge in quan-
tity or as integrated unit with big dairy farm .De-
pending upon the plant capacity , the cost of project
varies from Rs 25 lacs to Rs 50 lacs.
2) Vermi-composting is basically a managed process of
worms digesting organic matter (cow dung etc) to
transform the material into a beneficial soil amend-
ment. There is a growing realisation that vermi-
composting provides the nutrients and growth enhanc-
ing hormones necessary for plant growth. A growing
number of individuals and institutions are taking inter-
est in the production of compost utilising earthworm
activity. Some of them ventured into commercial pro-
duction as well.
Farm machinery and implements are required for cut-
ting (shredding) the raw material into small pieces, con-
veying shredded raw material to the vermi-sheds, load-
ing, unloading, collection of compost, loosening of beds
for aeration, shifting of the compost before packing and
for air drying of the compost, automatic packing and
stitching for efficient running of the unit. Further trans- sector has vast potential for lending.
port arrangement is also required . Financing to ver-
min-composting production unit can be explored .
Milk Parlour
At present , the distribution of Milk packet is supplied in
grocery shop as additional items . Banks can finance for
setting up separate Milk Parlour in towns, cities with
freezer equipments as small business activity .
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Export
Lastly ,there has been good export potential for Indian
casein and milk powders. India's dairy export market is
dominated by milk, cream and ghee .Despite having the
largest milk production , India is a still a minor player in
the world market. India's dairy exports, on an average ,
contribute only 0.09 % to the total exports and grew at
a CAGR of 22.02 % over FY06-14 to Rs.33.26 billion Dairy
imports during the period grew at a CAGR of 25.57 % to
Rs 2.14 billion and on an average accounted for only 0.03
% of the total imports .Banks can explore export finance
in dairy sector also .
Conclusion
"Mass production is production of masses" has been the
mantra behind Indian context of agricultural development.
Over the span of three decades, India has transformed
from a country of acute milk shortage to the world's lead-
ing milk producer.
Dairy is currently the top-ranking commodity is India with
expected value output of $89 billion in 2015-16 .Demand
for dairy products is likely to grow significantly in the
coming years , driven by more consumers, higher incomes
and greater interest in nutrition .
Consumption of processed and packaged dairy products is
increasing in urban areas. Milk processing industry in In-
dia drives its significance from its high potential for em-
ployment at low capital cost , use of local resources, pos-
sibilities for forward and backward linkages and its scope
for earning more output.
Despite increasing demand and production of liquid milk
and milk products vis-a vis opportunities for financing to
this sector , finance by banks to dairy sector is very
meager. Bankers think that financing for purchase of
milch cattle is financing to dairy sector, but, however ,dairy
References :
1) Department of Animal Husbandry, Dairying & Fisheries
2) National Bank for Agriculture and Rural Development
(NABARD)
3) National Dairy Development Board (NDDB)
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