Methodology for Appraisal of Dairy Project

Appraisal of Dairy Project (An Example)

Dr.Chandrakiran Sant, Dairy Advisor

For dairy schemes with very large outlays, detailed reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Facilities such as cost of land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants’ quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. However, if land is purchased for setting up a dairy farm, its cost can be treated as party’s margin upto 10% of the total cost of project.

The scheme should include information on land, livestock markets, availability of water, feeds, fodders, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State Government, dairy society/union/federation.

The scheme should also include information on the number of and types of animals to be purchased, their breeds, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report.

Technical Feasibility – this would briefly include –

1. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank’s branch.
2. Availability of good quality animals in nearby livestock market.
3. Availability of training facilities.
4. Availability of good grazing ground/lands.
5. Green/dry fodder, concentrate feed, medicines etc.
6. Availability of veterinary aid/breeding centres and milk marketing facilities near the scheme area.

Economic Viability – this would briefly include –

1. Unit Cost
2. Input cost for feeds and fodders, veterinary aid, breeding of animals, insurance, labour and other overheads.
3. Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc.
4. Income-expenditure statement and annual gross surplus.
5. Cash flow analysis.
6. Repayment schedule (i.e. repayment of principal loan amount and interest).

Other documents such as loan application forms, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme.

Repayment Period of Loan

Repayment period depends upon the gross surplus in the scheme. The loans will be repaid in suitable monthly/quarterly installments usually within a period of about 5 years. In case of commercial schemes it may be extended upto 6-7 years depending on cash flow analysis.

Insurance

The animals may be insured annually or on long term master policy, where ever it is applicable. The present rate of insurance premium for scheme and non scheme animals are 2.25% and 4.0% respectively but it may vary time to time.

Package of Common Management Practices Recommended for Dairy

Farmers

Modern and well established scientific principles, practices and skills should be used to obtain maximum economic benefits from dairy farming. Some of the major norms and recommended practices are as follows :

Housing:

1. Construct shed on dry, properly raised ground.
2. Avoid water-logging, marshy and heavy rainfall areas.
3. The walls of the sheds should be 1.5 to 2 meters high.
4. The walls should be plastered to make them damp proof.
5. The roof should be 3-4 metres high.
6. The cattle shed should be well ventilated.
7. The floor should be pucca/hard, even non-slippery impervious, well sloped (3 cm per metre) and properly drained to remain dry and clean.
8. Provide 0.25 metre broad, pucca drain at the rear of the standing space.
9. A standing space of 2 x 1.05 metre for each animal is needed.
10. The manger space should be 1.05 metre with front height of 0.5 metre and depth of 0.25 metre.
11. The corners in mangers, troughs, drains and walls should be rounded for easy cleaning.
12. Provide 5-10 sq. metre loaf space for each animal.
13. Provide proper shade and cool drinking water in summer.
14. In winter keep animals indoor during night and rain.
15. Provide individual bedding daily.
16. Maintain sanitary condition around shed.
17. Control external parasites (ticks, flies etc.) by spraying the pens, sheds with Malathion or Copper sulphate solution.
18. Drain urine into collection pits and then to the field through irrigation channels.
19. Dispose of dung and urine properly. A gobar gas plant will be an ideal way. Where gobar gas plant is not constructed, convert the dung alongwith bedding material and other farm wastes into compost.
20. Give adequate space for the animals.

Selection of Animal :

1. Immediately after release of the loan purchase the stock from a reliable breeder or from nearest livestock market.
2. Select healthy, high yielding animals with the help of bank’s technical officer, veterinary/animal husbandry officer of State government/ Zilla Parishad, etc.
3. Purchase freshly calved animals in their second/third lactation.
4. Before purchasing, ascertain actual milk yield by milking the animal three times consecutively.
5. Identify the newly purchased animal by giving suitable identification mark (ear tagging or tattooing).
6. Vaccinate the newly purchased animal against disease.
7. Keep the newly purchased animal under observation for a period of about two weeks and then mix with the general herd.
8. Purchase a minimum economical unit of two milch animals.
9. Purchase the second animal/second batch after 5-6 months from the purchase of first animal.
10. As buffaloes are seasonal calvers purchase them during July to February.
11. As far as possible purchase the second animal when the first animal is in its late stage of lactation and is about to become dry, thereby maintaining continuity in milk production vis-a-vis income. This will ensure availability of adequate funds for maintaining the dry animals.
12. Follow judicious culling and replacement of animals in a herd.
13. Cull the old animals after 6-7 lactations.

Feeding of Milch Animals

1. Feed the animals with best feeds and fodders.
2. Give adequate green fodder in the ration.
3. As far as possible, grow green fodder on your land wherever available.
4. Cut the fodder at the right stage of their growth.
5. Chaff roughage before feeding.
6. Crush the grains and concentrates.
7. The oil cakes should be flaky and crumbly.
8. Moisten the concentrate mixture before feeding.
9. Provide adequate vitamins and minerals. Provide salt licks besides addition of mineral mixture to the concentrate ration.
10. Provide adequate and clean water.
11. Give adequate exercise to the animals. Buffaloes should be taken for wallowing daily. In case this is not possible sprinkle sufficient water more particularly during summer months.
12. To estimate the daily feed requirement remembers that the animals consume about 2.5 to 3.0 percent of their body weight on dry matter basis.

Milking of Animals

1. Milk the animals two to three times a day.
2. Milk at fixed times.
3. Milk in one sitting within eight minutes.
4. As far as possible, milking should be done by the same person regularly.
5. Milk the animal in a clean place.
6. Wash the udder and teat with antiseptic lotions/luke-warm water and dry before milking.
7. Milker should be free from any contagious diseases and should wash his hands with antiseptic lotion before each milking.
8. Milking should be done with full hands, quickly and completely followed by stripping.
9. Sick cows/buffaloes should be milked at the end to prevent spread of infection.

V. Protection against Diseases

1. Be on the alert for signs of illness such as reduced feed intake, fever, abnormal discharge or unusual behaviour.
2. Consult the nearest veterinary aid centre for help if illness is suspected.
3. Protect the animals against common diseases.
4. In case of outbreak of contagious disease, immediately segregate the sick, in-contact and the healthy animals and take necessary disease control measures.
5. Conduct periodic tests for Brucellosis, Tuberculosis, Johne’s disease, Mastitis etc.
6. Deworm the animals regularly.
7. Examine the faeces of adult animals to detect eggs of internal parasites and treat the animals with suitable drugs.
8. Wash the animals from time to time to promote sanitation.

Breeding Care

1. Observe the animal closely and keep specific record of its coming in heat, duration of heat, insemination, conception and calving.
2. Breed the animals in time.
3. The onset of oestrus will be within 60 to 80 days after calving.
4. Timely breeding will help achieving conception within 2 to 3 months of calving.
5. Breed the animals when it is in peak heat period (i.e. 12 to 24 hours of heat).
6. Use high quality semen preferably frozen semen of proven sires/bulls.

Care during Pregnancy

Give special attention to pregnant cows two months before calving by providing adequate space, feed, water etc.

Marketing of Milk

1. Marketing milk immediately after it is drawn keeping the time between production and marketing of the milk to the minimum.
2. Use clean utensils and handle milk in hygienic way.
3. Wash milk pails/cans/utensils thoroughly with detergent and finally rinse with chloride solution.
4. Avoid too much agitation of milk during transit.
5. Transport the milk during cool hours of the day.

Care of Calves

1. Take care of new born calf.
2. Treat/disinfect the navel cord with tincutre of iodine as soon as it is cut with a sharp knife.
3. Feed colostrum to calf.
4. Assist the calf to suckle if it is too weak to suckle on its own within 30 minutes of calving.
5. In case it is desired to wean the calf immediately after birth, then feed the colostrum in bucket.
6. Keep the calf separately from birth till two months of age in a dry clean and well ventilated place.
7. Protect the calves against extreme weather conditions, particularly during the first two months.
8. Group the calves according to their size.
9. Vaccinate calves.
10. Dehorn the calves around 4 to 5 days of age for easy management when they grow.
11. Dispose of extra calves not to be reared/maintained for any specific purpose as early as possible, particularly the male calves.
12. The female calves should be properly reared.
13. Reference-On request.