SLBC of Andhra Pradesh SLBC OF ANDHRA PRADESH WELCOMES ALL STAKEHOLDERS TO WORKSHOP PRESENTATION ON CREDIT LENDING AVENUES TO COMMERCIAL DAIRY FARMS

Transcription

1 Convener SLBC OF ANDHRA PRADESH WELCOMES ALL STAKEHOLDERS TO WORKSHOP PRESENTATION ON CREDIT LENDING AVENUES TO COMMERCIAL DAIRY FARMS 1

2 Convener 2

3 BRIEF HISTORY Founded by Dr. BhogarajuPattabhiSitaramayyaat Machilipatnam in the year Thebankwasnationalizedin April1980. Today Andhra Bank is shining across the country with 2507 branches and 2232 ATMs. Further the bank is planning to open 300+ branches in FY

4 SLBC OF ANDHRA PRADESH Andhra Bank is the Convener Bank for State Level Bankers` Committee, Andhra Pradesh since Consequent to reorganization of AP into Telangana & Residual Andhra Pradesh w.e.f 2 nd June, 2014, responsibility of Convenership of SLBCof residual AP continued to be with Andhra Bank. So far 189 SLBC meetings have been organized including 6 SLBC Meetings in the reorganized state of Andhra Pradesh. 4

5 LENDING TO AGRICULTURE IN THE STATE OF ANDHRA PRADESH (OUT STANDINGS) Short term Production credit (amount in crores) Agril Term Loans Total Outof which advances to Dairy activity Lending to Dairy activity is contributing 4.50% of the total term lending in the state of Andhra Pradesh 5

6 COMPONENTS OF FRESH MILK Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk. Buffalo milk has 3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water whereas cow milk has 3.5% protein, 3.7% fat, 4.9% milk sugar,0.7%ashand87%water. 6

7 Credit Avenues to Commercial Dairy Farming Types of finance 1.CROSS BRED COWS (CBCs) Components of Finance: (Indicative cost of 1+1 unit Rs 96000/-) Cost of CB cows yielding on an average 10 liters of milk per day (Rs 44000/- per animal) Cost of equipment Transportation of animals Insurance premium Veterinary Aid Feed cost for one month for first animal Repayment period: 5 years in monthly installments linked to lactation with initial holiday of one month. 8

8 Credit Avenues to Commercial Dairy Farming- Types of finance 2. GRADED MURRAH BUFFALOES (GMBS): Components of Finance:(Indicative cost 1+1:Rs96000/-) Cost of Graded Hurrah Buffaloes yielding 8 liters of milk per day ( Rs 44000/- per animal) Cost of equipment Transportation of animals Veterinary Aid Insurance premium Feed cost for one month for first animal Repayment period:5 to 6 years in monthly installments linked to lactation with initial holiday of one month. 8

9 Credit Avenues to commercial Dairy Farming Types of finance 3.FEMALE CALF REARING : Female Cross Bred Calves of Jersey & HF (Holstein Friesian) and Graded Murrah Buffalo calves are supported Components of Finance: Cost of calf-own (for larger units the cost of calf can also be included) Cost of feed-23 months for CB Calves & 40 months for buffalo calves Veterinary Aid Cost of feed Insurance Repayment period: Female cross bred cow calf rearing:4 years with initial holiday of two years. Monthly installments linked to lactation, if, the animal is retained by the borrower or bullet payment,if, the animal is sold Female graded murrah buffalo calf rearing:5 years with initial holiday of 3 years. Monthly installments linked to lactation, if, the animal is retained by the borrower or bullet payment,if, the animal is sold 9

10 Credit Avenues to commercial Dairy Farming Types of finance 4.MINI DAIRY (CB COWS/GMB):Indicative unit cost: Rs lakhs Unit size:5 animals(3+2) Components of finance: Shed (5 animals,40 sq.ft/animal Rs 85/sq.ft/Thatch roof) Shed (3 calves;30 sq.ft/animal Rs 85/sq.ft/Thatch roof) Cost of equipment Cost of animals Feed for 1 month for I batch Fodder cultivation (0.5 acres) Insurance Veterinary Aid Repayment period: 5-6 years (monthly/quarterly installments) 10

11 Credit Avenues to commercial Dairy Farming Types of finance Mini Dairy (CB Cows/GMB): UNIT SIZE:10 Animals (5+5): Indicative unit cost Rs 5.75 lakhs COMPONENTS OF FINANCE: Shed for adults (10 animals,40 sq.ft/animal; Rs140/sq.ft/AC Sheet roofing) Shed for calves (30 sq.ft/calf: Rs 140/sq.ft/AC Shed,5 calves) Cost of equipment Cost of animals-rs 44000/-each Feed for 1 month for I batch Fodder cultivation (1 acre) Insurance Veterinary Aid Note: Additional cost for water source, chaff cutter, milking machine etc.,canbe considered subject to viability. Repayment period: 5-6 years (monthly/quarterly installments) 11

12 Credit Avenues to commercial Dairy Farming Types of finance 5.COMMERCIAL DAIRY: Any Size Depending upon the size of the unit. Components of finance: Cost of animal: CBC- Rs lpd GMB- Rs lpd Cost of equipment: Rs 500/- per animal Shed space-20 sq.ft/calf;30 sq.ft/heifer;40 sq.ft/adult Shed Cost-Rs 85/sq.ft-Thatched Roof;Rs140/sq.ft-Asbestos roof Fodder Cultivation Rs 17000/-per acre-10 animals Feed Cost to be capitalized for the first batch of animals-rs. 2000/- Per Animal Veterinary Aid Rs.1200/- per animal Insurance cost actual Other investments like feed store, milk shed, chaff cutter, minor irrigation structures for fodder unit, water supply system, milking machines, fencing, cost of bulls/ai unit, feed mixing unit etc. may be considered based on need and subject 12 to viability.

13 Credit Avenues to commercial Dairy Farming Types of finance 6.Fodder cultivation Unit size-1 acre Indicative cost Rs 17000/- per acre Components of finance: Cost of land preparation Ploughing Forming Ridges Planting Material Desmanthus Seed Farm Yard Manure Fertilizer Cost of application of FYM and Fertilizer Cost of Planting Cost of Weeding Cost of Irrigation Cost of cutting Miscellaneous Repayment Period: 5 years 13

14 Credit Avenues to commercial Dairy Farming Types of finance 7.Purchase of milking machines /milkotesters/bulk milk cooling units (up to 2000 lit capacity) Indicative Cost Rs 18 lakh 8. Milk parlors-indicative Cost Rs56000/- 9.Manufacturing process of milk products like paneer, ghee, butter, butter milk, ice creams, srikhand etc. -indicative cost Rs 12 lakh 10.Finance to dairy agents for procuring milk 14

15 TECHNICAL PARAMETERS Crossbred Cows Graded Murrah Buffalo Lactation period (days) Dry period (days) Calving interval (days) Economic life (years) Lactations 5 5 Pregnancy period (days)

16 HOUSING REQUIREMENTS (SHEDS) a. Cows/Buffaloes: 40 sq.ft./animal. b. Calves :20 sq.ft/animal. c. Heifers 30 sq.ft/animal. d. Paddocks (Open area attached to the shed): 2-3 times of shed area FODDER CULTIVATON: a) Irrigated land: one acre for 8 animals b) Unirrigatedland: one acre for 3 animals. Otherwise continuous supply of fodder from the private farms in the nearest vicinity of the farm shall be ensured as fodder farmers are being encouraged now. 16

17 Other Conditions Aunitoftwoanimalsshouldbefinanced.Eachanimalispurchasedwithan interval about 4-6 months to ensure continuity in milk production. Good quality of animals viz.,graded murrah buffaloes/cross bred cows, preferably freshly calved animals in second or third lactation. The animals should be purchased preferably at any of the notified market centers ensuring the quality of animals. After purchase of animals, health certificate from Veterinary Assistant Surgeon, stamped receipt from the seller and acknowledgement from the borrower for having received the animals in good condition should be obtained. The animals should be covered under Comprehensive insurance with PTD (Permanent Total Disability) cover right from the point of purchase, including transit risk. Suitable tagging and identification should be done. The sheds and equipment should also be covered under insurance. 17

18 Other Conditions: Animals should be vaccinated with the help of Veterinary Department Beneficiaries should have adequate arrangements for supply of green/dry fodders and concentrate feed. Beneficiaries are encouraged to take up green fodder cultivation on his own like Azolla cultivation. Adequate facilities for veterinary aid and breeding are available in the vicinity of the scheme area. Whereverloansforconstructionofcattleshedarenotgiven,itistobeensured that the beneficiary either has a cattle shed or facilities to provide shelter or willbeabletoprovidecattleshedoutofhisownsources. There must be arrangements to market the milk either through organized system like milk collection centers, Milk route of co-operative sector or outlet for direct sale of milk at remunerative prices. Where milk collection centers are available, arrangements to ensure that the milk proceeds are routed through the Bank account. Beneficiary should not dispose off or sold the animal without prior permission ofthebank inwriting,tilltheloanisclosed. 18

19 Other Conditions: Working capital requirement for maintenance of animal during dry period, if, necessary may be provided. A sign board indicating hypothecation of the unit to Bank should be exhibited prominently at the unit. All civil constructions are supported by the estimates from the engineer. MARGIN: 25% of unit cost Security: Collateral Security equivalent to 100% of the loan amount shallbeensured,iftheloanamountexceedsrs1.00 lakh ROI:RateofInterestvaryfromBanktoBank 19

20 Convener DOCUMENTS TO BE SUBMITTED FOR FINANCE Application Form for Agriculture credit & Dairy annexure Property Statement KYC compliance of Borrower/ Guarantor/Mortgagor Detailed Project Report-Total Financial Out lay, Means of Finance, projected Balance Sheet, Operating Statement, Cash flow Statement, DSCR and IRR, Sensitivity analysis Credit information Form /Credit investigation report Approved Plan from local bodies(for Civil Structures), availability of quality water, Electricity feasibility report. Copies of Audited Financial Statements for last 3 years,provisional and estimates for the current years and projections for the years till the repayment of the loan-applicable to the firms 20

21 FACTORS INFLUENCING SUCCESS OF THE ACTIVITY: Selection of the Breed. Availability of Fodder. Proper Feeding and Health care of Animals. Proper Marketing of Milk. Availability of Labour. 21

22 REASONS FOR FAILURE Lack of use of scientific practices in milching. Inadequate availability of fodder in all seasons. Unavailability of veterinary health services. Poor Professionalism in dairy management. 22

23