Uttar Pradesh’s government has rolled out subsidies under the Dairy Development Policy 2022 to strengthen milk cooperatives, offering capital and interest subsidies for dairy units, cattle feed plants, and technological upgrades. Aimed at boosting milk production and farmer incomes, the initiative includes training and infrastructure support to modernize the dairy sector and enhance rural livelihoods.
Uttar Pradesh Bolsters Dairy Sector with Subsidies for Milk Cooperatives
The Uttar Pradesh government has launched a series of subsidies under its Dairy Development Policy 2022 to empower milk cooperatives and elevate the state’s dairy industry. Aimed at increasing milk production and improving farmer livelihoods, these measures focus on infrastructure development, technological upgrades, and financial support for dairy cooperatives and farmers.
A key component of the policy is a 10% capital subsidy, up to ₹5 crore, for establishing new milk processing and dairy manufacturing units, covering machinery, technical civil works, and spare parts. Additionally, an interest subsidy of 5% or the actual loan amount, whichever is lower, is provided for five years, with a maximum limit of ₹10 crore for dairy units and ₹7.5 crore for cattle feed units. Technological upgrades, such as quality control equipment and traceability systems, are also supported with a 5% interest subsidy for up to ₹2.5 crore over five years.
The policy includes training programs for milk producers, Micro, Small, and Medium Enterprises (MSMEs), Farmer Producer Organizations (FPOs), and Milk Producer Companies. Conducted by reputed institutes, these programs focus on clean milk production, breed improvement, and technical and financial aspects of dairy management. The state is also integrating advanced technologies like Supervisory Control and Data Acquisition (SCADA) systems for better traceability and information management in dairy units.
To address power reliability issues, the policy offers electric subsidies for new dairy milk units after assessment by the electricity department. Additionally, stamp duty subsidies are provided to ease the financial burden on cooperatives setting up new infrastructure. The reform of the Regional Cooperative Dairy Federation Limited (PCDFL) is also underway to streamline operations and enhance efficiency.
Uttar Pradesh, a significant player in India’s dairy sector, aims to leverage these subsidies to increase milk procurement and processing capacities. The state’s efforts align with India’s broader goal of maintaining its position as the world’s largest milk producer, contributing 23% to global milk production with 209.96 million tonnes in 2020-21. By strengthening cooperatives, the government seeks to ensure fair prices for farmers and meet the rising demand for milk and value-added dairy products.
The policy also emphasizes sustainable practices, encouraging cooperatives to adopt solar energy with a proposed 30% subsidy, reducing reliance on grid electricity and diesel. This aligns with the national Kisan Urja Suraksha Evam Utthaan Mahaabhiyan (KUSUM) scheme, enabling farmers to sell surplus solar power to the grid, further boosting their income.
Challenges such as low milk prices, high feed costs, and inadequate veterinary services persist, but the subsidies aim to mitigate these by improving access to resources and modern equipment. The state’s focus on cooperatives draws inspiration from successful models like Amul in Gujarat, which has empowered farmers through collective bargaining and efficient supply chains.
Disclaimer: This article is based on information from government announcements, official websites like Invest UP, and reports from sources such as Times of India, Hindustan Times, and Agri Farming, accessed for real-time data as of September 2, 2025. Readers are advised to verify details with local authorities or NABARD for specific eligibility and application processes.