New scheme of interest subvention on working capital loans for dairy sector
- Posted By
10Pointer
- Categories
Polity & Governance
- Published
15th May, 2020
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- Union Government has introduced a new scheme of Interest Subvention on Working Capital Loans for Dairy sector for supporting Dairy Cooperatives and Farmer Producer Organizations engaged in dairy activities for implementation during 2020-21.
- Due to higher milk procurement and lower sales during the COVID-19 lockdown, the milk and dairy cooperatives have resorted to large scale conversion into high shelf-life products like milk powder, white butter and ghee.
- Such conversion into high shelf-life products resulted in blockage of funds and caused difficulty in payment to the farmers.
- Due to decrease in demand for high valued products like ice-cream, flavoured milk, ghee and cheese, only a small quantity of milk are converted into value added products like Paneer and Dahi impacting the sales turnover and realization.
- In order to meet the working capital needs of the Cooperatives and Farmer owned milk producer companies, interest subvention will be given on working capital loan taken from banks and financial institutions between 1st April 2020 to 31st March 2021.
- The scheme has made provisions for providing interest subvention of two per cent per annum, with an additional incentive of two per cent per annum interest subvention to be given in case of prompt and timely repayment.
