Among a variety of policy concerns, the ongoing discussion over farm laws has fixed the spotlight on infrastructure investments necessary to boost productivity levels and fill critical gaps in production. If such investments are undertaken in a timely manner, even as the country seeks an exit out of the pandemic-induced economic slowdown, pressure will be reduced across the farm sector with immense knock-on benefits for the entire economy.
In June 2020, while the country was reeling under the initial wave of COVID-19 and subsequent lockdowns, the Central government unveiled a string of measures to cushion the economy, as a part of which the Animal Husbandry Infrastructure Development Fund (AHIDF) was announced. As an allied industry of agriculture, the animal husbandry and dairy sector collectively employs more than 100 million people. Since the bulk of establishments in this sector is concentrated in rural India, the socio-economic relevance of this sector cannot be overstated.
The AHIDF has been set up with an outlay of ₹15,000 crore. As per the provisions of AHIDF, a project will be eligible for a loan amount that covers up to 90% of the estimated cost – with an interest subvention of 3% for all eligible entities. Applicants can submit the proposal with a complete Detailed Project Report through the Udyami Mitra Portal. The Ministry’s website has been updated with the relevant technical details for prospective applicants. As such, this is the first major fund launched by the government that includes a diverse set of stakeholders such as FPOs, private dairy players, individual entrepreneurs, and non-profits within its ambit.
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As an example of a sub-sector concern where the dairy value chain could be strengthened, there is a pressing need to enhance chilling infrastructure at collection centres by setting up bulk milk coolers to prevent wastage of milk. Currently, there is an infrastructure gap of about 120-130 MMT, which translates into an investment potential of approximately ₹20,000 crore. If the infrastructure needs for milk processing and distribution are included, then the overall potential investment opportunity is to the tune of ₹1,40,000 crore across the dairy value chain.
There is also considerable potential to increase the productivity of cattle, especially by enhancing the quality of animal feed. With this in mind, the AHIDF has been designed to support the establishment of animal feed plants of varying capacities – including setting up of mineral mixture plants, silage making units, and animal feed testing laboratory. To spur on innovative solutions, the Ministry in collaboration with Invest India has invited ideas from domestic start-ups for the development of new varieties of green fodder and enriched animal feed. The infrastructure gap of 10-18 MMT in the production and supply of affordable compound cattle feed translates into an investment potential of around ₹5,000 crore.
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In a similar vein, there are not only economic but nutritional benefits to boosting the poultry segment’s output, efficiency and quality. India is the fourth largest chicken meat producer and the second largest egg producer in the world and is well-positioned to help mitigate rampant malnutrition given that chicken meat provides the cheapest source of protein per unit. With eggs being introduced as part of the mid-day meal within several anganwadis in the country, an upgradation in poultry infrastructure would be closely intertwined with social justice outcomes too.
Finally, macro benefits regarding climate change and employment are linked to this sector. Enhanced infrastructure can make processing units more energy-efficient and help mitigate their carbon footprint. The AHIDF also has the potential to create over 30 lakh jobs, even as it overhauls domestic infrastructure towards giving greater prominence to India’s dairy and livestock products in the global value chain.
Atul Chaturvedi is the Secretary, Ministry of Animal Husbandry, Dairying and Fisheries; and Naina Sharma works at Invest India