The state government is considering a proposal to extend 25 per cent subsidy on capital expenditure made on setting up small-scale dairy units of five to ten animals each.
According to Somashekhar, additional director (animal husbandry), the gap between milk supply and demand is growing and milk production is now mostly undertaken by small and marginal farmers.
To promote dairy production, the government had introduced a mini-dairy promotion scheme, which did not take off as the subsidy offered was only on the interest.
A revision of the scheme offering a 25 per cent subsidy on capital expenditure was before the government, and is expected to be cleared in a month.
Somashekhar said a dairy unit of five animals would cost Rs 4 lakh and would suit large farmers who can mobilise bank funding on their own. For small and marginal farmers, other schemes are already in place, he said.
Earlier, Fapcci president VS Raju announced a one-day conference on development of dairy industry in Andhra Pradesh to be held on September 9.
He said the state accounted for 9 per cent of the national milk production, which is at 94.5 million tonnes this year. As a low-cost producer, the state could gain from exporting to perennially milk-deficient countries in southeast Asia.
K Bhaskar Reddy, chairman, Fapcci agriculture committee, said milk production was growing at 3 per cent while consumption growth was at 6 per cent a year. He said the selling price of milk had increased 35 per cent in the last one year, while the procurement price grew 30 per cent.
