For dairy projects with large outlays, detailed project reports will have to be made.

The finance
items would include capital asset items such as purchasing of animals, construction of sheds,
Equipment, etc. The feeding cost during the initial 6 months is capitalized and given as a term
loan.

Cost towards land improvement, digging, fencing, commissioning of diesel engine/pump set,
essential servants’ quarters, go-down, electricity connections, transport vehicle, milk processing
facilities etc., Should be outlined for the loan to be considered.

To be able to prepare a comprehensive project report the team should also indicate
competitors, nearness of dairy farms to such a society, veterinary Centre, artificial insemination
center and such supportive services.

The project report for a dairy farm should detail the following information on technical,
financial, and managerial aspects based on the type of unit and capacity.

Technical Needs for the Business Plan

 Land & land development (Location, proximity, area, suitability to the road, site map
etc.)

 Proposed capacity / No. of milk animals

 Civil structures (Sheds, office quarters, storeroom, milk room, staff room etc.)

 Equipment, Machinery and Plant (Chaff cutter, Feed grinder and mixer, milking
pails/milk cans, Silo pit, Milking machine, Biogas plant, Equipment for manufacture of
feeding products, Bulk coolers, Truck/van)

 Housing Type of Housing (Area requirement – Adults, Calves (less than 1 year),

Heifers (1-3 years)

 Animals (Source of purchase, proposed species, proposed breed, Place of purchase,

Distance, Cost of transport)

 Production Parameters (Milk yield (Ltrs. per day), Order of lactation, Conception rate,
Lactation days, Dry days, Mortality (%) – Adults, Young stock)

 Breeding Facilities (Location-Distance (km.), Availability of semen, Availability of staff,

Source, Expenditure per animal/year)

 Feeding (Source of fodder and feed – Dry fodder, Green fodder, Concentrates. Fodder
crop rotations. Fodder cultivation expenses, costs and Requirement)

 Veterinary Aid Source (Availability of labor and other staff, Location-Distance (km.),

Types of facilities available, if own arrangements are Made-Employed a
stockman/veterinary doctor/consultant, Periodicity of visit, Expenditure per animal per
year)
  Water (Source, Availability of sufficient quantity for drinking, Quality of water, cleaning
and fodder production, type of structure, design and cost)

 Electricity (Source, Connected load, Problems of power failure, Arrangements for

generator)

 Marketing of other products (Animal – age, price expected, place of sale, Manure

Qty./animal, Price/unit, Empty gunny Bags-Number, Cost/bag

 Marketing of milk (Source of sales, Distance (km.), price realized – (per liter of milk),
place of disposal, Basis of payment, Periodicity of payment

Financial Needs to Start the Farm

 Financial viability (Net Present Worth, Internal Rate of Return, Benefit-Cost Ratio)

 The financial position of the borrowers (Whether Income Tax, Debt Equity Ratio & other
tax obligations are paid up to date, Profitability Ratios, Whether the audit is up to date)

 Lending Terms (Rate of Interest, Nature of Security, Repayment Period, Grace Period)

Managerial Overview

Borrower’s profile

 Individual/ Co-operative Society / Corporation/ Partnership /Company /Others

 Proposed business handling capability

 Experience in the proposed activity 

 Financial soundness

 Technical and other specific qualifications

 Managerial/Technical staff and adequacy thereof

(B) Others

 Financing bank’s name

 Training facilities for buffalo farming training

 Support available from State/ Central Government

 Regulatory approvals, if any etc.

Economics of Dairy Farming
The following is an assumption of 10 cows for dairy farming is given below. This indicates the
applicable input and output costs and the parameters observed at the field level, which may be
incorporated. Let’s begin with the buffalo farming information.

Capital Cost of Dairy Faming

Cost of Animals

Cost of Transport

Animal Shed’s Construction

Calf Shed’s Construction

Chaff Cutter & Equipment’s cost

Total
Techno-Economic Parameters in Project Report for a Dairy Farm

Breed of the Dairy Cows

No. of Cows

No.of Animals Per Batch

Breed Price Per Animal 

Transportation Cost Per Animal

Cost of Culled Animal

Average Milk Yield (liter/day) 

Cost of construction per sq.

Floor space (sqft) per adult animal

Floor space (sqft) per calf

Cost of chaff cutter (power-operated)

Cost of equipment per animal

Veterinary cost per anima l/year

Insurance premium (% per annum)

Concentrate feed quantity in one bag(kgs.)

Cost of green fodder (Ksh./kg)

Cost of concentrate feed (Ksh./kg)

Cost of dry fodder (Ksh./kg)

Salary of Labourers per month (Ksh.)

No. of Labourers

Electricity cost and water/animal/year (Ksh)

The selling price of milk/litre (Ksh./Litre)

Margin (%) 

Rate of interest (%)

Repayment Period (years)

Lactation days

Dry days
Feeding Schedule
Lactation Dry
Type of

Feed Price Qty. Cost Per Day Qty. Cost Per Day
(Ksh.) (Ksh.) (Ksh.) (Ksh.) (Ksh.)

Concentrate

Feed

Green
Fodder

Dry Fodder

Total 

Total Concentrate Feed Consumed (Kgs.)

No. of Gunny
Year Lactation Dry Total
Bags

Year 1 

Year 2 

Year 3

Year 4

Year 5 

Lactation Chart
I Batch II Batch

Year Lactation
Lactation days Dry days Dry days
days

II

III

IV

V
Economics the Project Report

Years
Particulars
1st 2nd 3rd 4th 5th

Sale of Milk

Total

Cost of Feeding During Lactation

Cost of Feeding During Dry Period

Veterinary & Breeding Charges

Labour Charges

Electricity and Misc. Charges

Insurance Charges

Total

Surplus 

Balance Sheet

1st Year 2nd Year 3rd Year 4th Year 5th Year

Capital Costs 

Recurring Cost 

Total Costs

Gross Profit

Net Profit