From :- G.M.

HEGDE, BHAIRUMBE
B.Tech (Agri.Engg.) & P.G.D.M.
BHAIRUMBE ASSOCIATES,
Hulgol Chal, Hospet Road, SIRSI - 581 401.
Phone : (08384) 227389 (Off) 236881 (Res) 9448136881 (Mobile)

PROJECT PROPOSAL FOR DAIRY DEVELOPMENT

Name& SRI SIDDHIVINAYAKA GANESH BHAT,
Address BANGARAMAKKI, GERASOPPA,
HONNAVAR TQ. U.KANNADA,
KARNATAKA.
Phone:- 08387-268333, 9448943050
INTRODUCTION
Dairying is an important source of subsidiary income to
small/marginal farmers and agricultural labourers. The
manure from animals provides a good source of organic
matter for improving soil fertility and crop yields. The gober
gas from the dung is used as fuel for domestic purposes as
also for running engines for drawing water from well. The
surplus fodder and agricultural by-products are gainfully
utilised for feeding the animals. Almost all draught power for
farm operations and transportation is supplied by bullocks.
Since agriculture is mostly seasonal, there is a possibility of
finding employment throughout the year for many persons
through dairy farming. Thus, dairy also provides employment
throughout the year. The main beneficiaries of dairy
programmes are small/marginal farmers and landless
labourers.
According to World Bank estimates about 75 per cent of
India's 940 million people are in 5.87 million villages,
cultivating over 145 million hectares of cropland. Average
farm size is about 1.66 hectares. Among 70 million rural
households, 42 per cent operate upto 2 hectares and 37 per
cent are landless households. These landless and small
farmers have in their possession 53 per cent of the animals
and produce 51 per cent of the milk. Thus, small/marginal
farmers and land less agricultural labourers play a very
important role in milk production of the country. Dairy
farming can also be taken up as a main occupation around
big urban centres where the demand for milk is high.

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ENTREPRENEUR
Sri Siddhivinayak Ganesh Bhat has been involved in
agriculture and allied activities for the last decade and a half.
He has been running a small dairy since 1990. Further, he
has visited many model dairies in this region and has gained
sufficient practical knowledge. With the traditional
background as well as the acquired expertise of managing
dairy, he is well qualified to take up the proposed venture.
LOCATION
The entrepreneur plans to raise the fodder plot as well
as to construct the dairy in totally 2-13 Acres of land in
Sy.No.5A/2 & 6/2 of Hulegar Village, Honnavar Tq.
PROPOSAL
The entrepreneur plans to establish a well equipped
dairy with fodder plot. He wants to purchase 50 high-
yielding cross-breed cows as well as to create all the
necessary infrastructure.
ACTION PLAN
To take-up the proposed dairying in a medium scale,
the entrepreneur has planned to undertake the following
operations:-
CONSTRUCTION OF COW-SHED with STORE-ROOM & OVER-
HEAD TANK
Each cow requires a space of around 50 Sq.Ft., inclusive
of the walking passage and fodder chamber. Further,
maintenance of Dairy involves procurement and stocking of
Feeds, Fodder, Utensils and implements. So, the
entrepreneur plans to go for construction of a big cowshed,
keeping in view the future expansion of dairy activity, as per
the plan & estimate. Though, the cattle love to graze in the
open paddock, that system will not work in this heavy rain
tract. So, construction of a cowshed is essential.
Further, Partition (using fabricated G.I.Pipe and RCC)
would be helpful in allowing the cows to eat and rest in their
allocated space, without transgressing that of others and it

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also makes the dung and urine to fall in the specified space.
By this, the cows as well as the shed will be quite clean.
Water is essential for cows. To provide drinking water
as well as to clean the cow-shed, the entrepreneur plans to
construct an RCC Tank of length x breadth x height.
PROCUREMENT OF COWS
Though small dairy has been maintained in each
household of this region for centuries, due to inbreeding the
size of the animals has been retarding and the yield has
been too low (hardly 2-3 litres per cow per day). The local
breed is called Malnad Gidda (Malnad Short) and is truely
short in size and yield. So, thanks to the efforts of the
Government Departments as well as NGOs like BAIF, cross-
breed cows have become popular. These cross-breed cows
not only adjust to the local conditions, but also give 10-15
litres milk yield per day. So the entrepreneur plans to
procure 50 cross-breed cows. The cost of Cross-breed cows
varies between Rs.30000/= to Rs.35000/= depending upon
yield and age. So, here, Rs.35000/= per cow has been
considered. Further, the cost of transportation also varies
depending upon the distance. Here, Rs.2000/= per cow is
considered.
INSTALLATION OFCOMPRESSOR- PUMPSET
Pumpset is required to clean the cows as well as
cowshed. The water has to be sprayed with pressure. So,
the entrepreneur plans to procure and install 1 H.P
compressor Pumpset.
MILKING MACHINE
The milk yield varies depending upon the pressure
applied by the milking person. Where as, the pressure would
be regular, when a milking machine is used. Further, milking
machine could be operated even if there is only one person
to maintain the dairy. So, the entrepreneur plans to procure
a milking machine.
CHAFF CUTTER
The health and yield of the cows is dependent upon the
feeds. Dry jower cuttings coupled with rice-bran, etc.

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coupled with factory produced feeds as well as green fodder
will be a good combination. The entrepreneur plans to
prepare the feeds at home by mixing various raw materials.
So, a chaff-cutter is essential.
SLURRY-TANK
The dung is used in the Gobar-Gas Plants. The dung-
slurry from the gas plants would be used to prepare compost
or will be diluted and applied directly to the base of various
plants. To move the slurry from the gas plant to the
gardens, a slurry tank (mounted on a trolley to be attached
to the tractor) is essential.
GENERATOR
Power-cut has become a big problem to industries as
well as agriculture & animal husbandry. The entrepreneur
plans to procure a 15 KVA Diesel Generator with Self-Starter
to run the milking machine and other machineries during the
power-cut period.
UTENSILS, EQUIPMENTS & TROLLEYS
Vessels, steel buckets, cans, etc. are necessary to mix
and prepare the feeds, to provide feeds to the cows, to store
the milk, etc. respectively. The approximate cost for all
these would be around Rs.20000/=. Trolleys are essential
to move the dung from the cowshed to the Gobar-Gas Plant.
PICK-UP VEHICLE
As the proposed site is situated about 35 K.M.s from the
main city, it is proposed to procure a Pick-Up vehicle to
transport milk.
POWER CONNECTION & ELECTRIFICATION
The entrepreneur plans to get a separate Transformer
installed for this big dairy as the load on the existing
transformer is beyond its capacity. Further, electrical wiring
has to be done to install the milking machine, compressor
pump, chaff-cutter and lighting system.
GOBAR GAS PLANT

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 Energy is a necessary concomitant of human existence.
Today, energy crisis has mainly emerged from the fear that
the boons of fossil oil may turn into a bane as the
disappearance of fossil oil would compel the habits and
practices of living of the society to change. Bio-Gas or
Methane is an alternate source of energy which has been
identified as a useful hydro-carbon with combustible qualities
as that of other hydrocarbons. It can meet some needs of
household and farms. So, the entrepreneur plans to
construct two Gobar Gas Plants of 500 cft capacity and the
same would be used for household use.
FODDER PLOT
Fodder is very essential for cows. Even though
concentrated feeds are more nutritious than the fodder,
cattle cannot survive on feeds only. They need fibrous
fodder for proper digestion. Further, even in fodder 33%
must be green fodder and regular supply of green fodder
helps in maintaining the health of the cows.

COST ESTIMATES

Rs.73,90,000/=

(In words:- Rupees Seventythree lakhs Ninty

thousand only)

As per Annexure-I

ANNUAL YIELD & INCOME

The normal yield of the proposes cross-breed cows

would be around 15-20 litres per day and the total yield per
lactation would be 4500 litres, taking 280 days as lactation
period and an average of 16 litres milk yield per day.
Because, the milk yield diminishes after 6 months and so
only 4200 litres is considered per lactation period. The
purchase price of milk by KMF and other dairies is around
Rs.10.50 and that in the direct market is around 13.50. So,
here, the entrepreneur plans to directly supply the milk to
hotels and big consumers at Honnavar and other cities. So,

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even if the transportation cost is excluded, the entrepreneur
would get more than Rs.12.50 per litre and the same rate is
considered while calculating the returns in Annexure-II.
MAINTENANCE EXPENSES

The maintenance expenses include the cost of feeds,

fodder, medicines, vaccination, insemination, electricity
supply, labour charges, etc. Traditionally feeds were
prepared in the dairy by mixing and boiling green fodder,
leguminous plants, dry fodder like jower, cakes of groundnut,
sunflower, ricebran, etc. But, today, the factory made cattle-
feeds have encroached their place. However, whether we
provide readymade feeds or home-made feeds, the quantity
depends on the weight of the cow. The total quantity of food
per day per cow (assuming a weight of 400 Kgs), inclusive of
both feeds and fodder, would be approximately 12 Kgs. Out
of this 1/3 will be feeds and 2/3 will be fodder. Further, cost
will be incurred on Artificial Insemination, Vaccination and
Medical Treatment. In addition, 3 labourers are required to
maintain the unit of 50 cows.
INVESTMENT
The entrepreneur wants to avail an agricultural term
loan of Rs.58.80 lakhs (Rs.26.00 lakhs for construction of the
cow-shed and the remaining Rs.32.80 lakhs for developing
the dairy and fodder plot.). The loan to investment ratio
would be around 80%. Further, 13.00% rate of interest is
considered while calculating the repayment schedule and
D.S.C.R. The duration of the term loan is taken as 8 years,
as during the first financial year there would be only 4
months and during the second year 6 months are essential
to complete the construction of shed. Further, the interest
during the first year is calculated for 4 months, i.e. from
December 2007 to March 2008 for the loan to be availed for
construction of the shed, and during the 2nd year it is
calculated for 12 months to the loan component of the cow-
shed and for 6 months for the remaining loan component.
As the full income flow begins only during the 3rd financial
year, the interest of the first two years may have to be
deferred to the last year.

AVAILABILITY OF INPUTS

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 All the inputs like cross-breed cows, feeds, fodder, etc.
are available in this taluka itself. Dairy Development has
been propagated in this district since 1960 and now most of
the households have cross-breed cows. Thanks to the high
quality insemination facility as well as vaccination provided
by BAIF (Bharatiya Agro-Industries Foundation, Pune)
management of dairy has become quite easy. Further, Govt.
of Karnataka has also opened Veterinary Hospitals in various
villages and they are also providing medical facilities. In
fact, there is a veterinary hospital in this village as well as
the Taluka Head Quarter – Honnavar.
MARKETING
Milk has got good market. Now, KMF as well as private
companies like Krishna Dairy procure milk from the farmers.
Further, the hotels purchase milk in bulk quantity directly
from the farmers. Both KMF & Krishna has its milk
procurement centres in the taluka centre – Honnavar, at a
distance of 35 K.M.s. from the proposed dairy.
CONCLUSION
Agriculture and Animal Husbandry has been the main
source of livelihood for millions of our country. The farmers
were generally regarded to be illiterate poor. But, today,
more and more farmers are entering this field, equipped with
the modern techniques & machinery and are reaping good
returns from the fields. In a country, where every graduate
aspires for white-collared government job, these
entrepreneurs are not only earning for themselves, but are
also creating a livelihood for thousands of others. Thus, this
kind of venture helps the individuals as well as society at
large.
As this project proposal has taken into consideration the
price fluctuations as well as the yield variations and the
minimum yield and income are considered while estimating
the returns, one can expect the returns projected above. The
income from sale of milk and dung would enable the farmer
to repay the loan amount as envisaged in Annexure-II, after
meeting interest commitments and yearly expenditure.

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 From the above, the project may be considered as
economically viable as well as is sure to bring profitable
returns to the owner, lender as well as the nation.

Place : SIRSI
Date : 7/11/2007