Animal Husbandry Fostering India’s Rural MSME
Dr Sudharsan Sambasivam & Ajanta Khaklari,
Faculty members
NABARD Staff College, Lucknow
Animal husbandry (AH) has emerged as a major contributor for the growth of India’s rural micro, small and medium enterprises (MSME) and overall economic development. The activities like dairy, poultry, meat, and feed processing are the major MSMEs in AH. Apart from contributing to national economy in general and to agricultural economy in particular it also supports asset creation, employment generation, and helps the farmers during crop failure. Value of milk group at current prices is more than Rs.12.21 lakh crore during 2023-24 which is the highest of the agriculture produce and even more than the combined value of Paddy and Wheat. There is constant growth in the value of output of paddy & wheat and Milk. Though the value of Paddy & wheat has grown by 112% the value of milk has grown by 146% over the 9-year period. Rising incomes and shifting dietary preferences are boosting demand for milk, eggs, and meat, encouraging entrepreneurs to venture into MSMEs in these sectors. India’s AH sector is experiencing a “silent revolution”.
The annual milk production in 2023–24 is 239.3 million metric Tonne (MMT), a 64% increase in the last decade. Out of this only 37% was consumed at the farmers’ level, leaving a marketable surplus of 63%. Only 31% of this surplus is handled by the organized sector. The remaining 69% offers additional opportunity for MSME-led dairy processing and value addition. These units can support many micro and small enterprises for milk collection, chilling, processing, value addition and distribution. The rise of chilling and processing MSMEs means that a larger share of India’s milk is pasteurized, packaged, or transformed into products, increasing farm gate price of milk and reducing spoilage. Value-added dairy products has export potential, encouraging entrepreneurs to invest in processing units.
Similar trends are evident in poultry and meat sector as well. India’s poultry industry which used to be small-scale is now witnessing the emergence of MSMEs in the sector. Egg production increased at the rate of 81% over the last decade offering opportunities across the value chain that is Poultry breeding units, hatcheries, feed production units, poultry layer units, cold storage, and Egg processing plants. India produced 10.25 MMT meat in 2023-24 which is a 64% growth in the decade. Notably, poultry meat forms nearly half of India’s meat produced, and its processing is increasing with new integrated poultry processing MSMEs which processes meat, produce value added products and package it for urban markets with better shelf life. These facilities produce value-added products and ensure waste utilization thereby expanding business opportunities. Meat sector, modernization is improving quality and enabling exports.
Feed and fodder processing is another vital area for rural MSMEs. India’s growing livestock population demands large quantities of nutritious feed. As per ICAR-Indian Agricultural Research Institute-Jharkhand, the country faces a net deficit of 44% concentrate feeds. The deficit may further rise due to consistent growth of livestock population. This demand-supply gap in concentrate feed represents a huge opportunity for MSME in compounded feed manufacturing. These enterprises produce scientifically compounded animal feed and mineral supplements that would enable tapping the full genetic potential of the animals. Expanding feed MSMEs improves livestock productivity and lowers input costs for farmers, creating a virtuous cycle of growth in AH.
Government of India is making concerned efforts to support MSMEs, the Union Budget 2026-27 recognized MSMEs as a vital engine of growth, to help them grow as “Champions” a dedicated ₹10,000 crore SME Growth Fund was introduced, and key measures were announced regarding TReDS to leverage its full potential. The existing Animal Husbandry Infrastructure Development Fund (AHIDF) is a landmark scheme with Rs. 30,000 crore to stimulate private and MSME investment in AH infrastructure. AHIDF offers 3% interest subvention, and credit guarantees on loans for Dairy processing and value addition units, Meat processing and cold storage infrastructure, Animal feed manufacturing plants, Veterinary vaccine, drug manufacturing facilities & disease diagnostic laboratories, Animal waste-to -wealth initiatives and Primary wool processing units. Ministry of Food Processing Industries (MoFPI) – Kisan SAMPADA Yojana extends subsidy for establishing or upgrading food processing units, including milk, meat and poultry processing and cold-chain units. MoFPI implements a centrally sponsored “PM Formalisation of Micro food processing Enterprises (PMFME) Scheme” under Aatma Nirbhar Bharat Abhiyaan initiative for providing financial, technical and business support for upgradation of micro food processing enterprises in the country. PMFME Scheme adopts One District One Product (ODOP) approach. The Production-Linked Incentive Scheme supports food manufacturing entities for expansion of processing capacity and branding abroad to incentivise emergence of strong Indian brands.
The growth of AH MSMEs contributes to national food security by increasing the availability of protein-rich foods at affordable prices. Formal processing by MSMEs also improves food safety and quality. Pasteurized milk in sachets, hygienic meat, and quality compounded feed all lead to better outcomes. Indian buffalo meat has a significant export market share, earned through modern abattoir MSMEs that meet global standards.
AH has become a pivot of India’s rural MSME development, driving significant progress in rural industrialization, employment generation and income enhancement. Government initiatives such as from concessional loans, subsidy, and capacity building are critical in enabling this transformation. These policies provide the financial backing for infrastructure creation that allow entrepreneurs to start or expand rural AH MSMEs. As a result, what was once largely an informal, subsistence activity is rapidly formalizing into a network of thriving MSMEs, making AH a powerful vehicle for rural employment, women’s empowerment, and value addition. Continuing to invest in this sector through better credit access, skill development, technology upgradation, and market linkages will further cement AH role as a cornerstone of rural economic development and the MSME growth story of Rural India.
Disclaimer: The views and opinions expressed in this article are those of the authors in their personal capacity and do not necessarily reflect the official policy or position of any government department, institution, or organization. The data and examples cited are for informational purposes only and should not be construed as professional or financial advice. Readers are advised to exercise their own discretion and judgement while using or interpreting the information presented.
