How To Select An Appropriate Dairy Farm Location?

. 7 min read
How To Select An Appropriate Dairy Farm Location?

Table of Contents:

1. Selection Of Site For Dairy Farm

2. Factors For Selecting Dairy Farm Location

3. How To Make Selection Of Site For Dairy Farm In India?

FAQs On Dairy Farm Location

1. Selection Of Site For Dairy Farm

The dairy business has a special place in the Indian economy; traditionally, milk enjoyed a special status from ancient times. A focus on dairy development has led to India's emergence as the top milk-producing country globally.

An estimated bovine population of over 300 million produces 185 million + tonnes of milk. The per capita consumption is a little less than 400 gm.

Several small and marginal farmers across India are employed in dairy farming India. Under the cooperative model, a strong dairy development initiative has been a significant success story in India's dairy sector.

Rising income level, convenience, increased awareness of hygiene and associated health factors are the growth drivers in this business. One more factor impacting growth, particularly in major cities and urban areas, is introducing innovative milk-based products that have expanded the consumer base. The general scenario of the dairy industry in India is bright and offers an attractive business option of starting a dairy farm business.

Planning a new business is a detailed and extensive exercise involving several studies, analysis, data verification, finally leading to the preparation of a business plan. A critical criterion of the business document is to plan the location for setting up the dairy. A large number of cows/buffaloes have to be housed scientifically for ensuring proper milk production. Let us first understand the primary reasons for land selection or how to choose a location for your business.

2. Factors For Selecting Dairy Farm Location

1. Usage status of the land

Land for a dairy business usually will be available in a rural location; it (the ground) has to be finalised at the Panchayat/municipality level. It is necessary to check whether the particular area/locality has no bar on setting up the type of unit you have planned. Though such restrictions are generally meant for polluting industries or specific types of chemical production, it is better to be clear on the land usage pattern at the planning stage itself.

2. Land infrastructure

It would help if you categorically ascertained the existing physical condition of the land. Historically, rural locations are used for agricultural activities; the ground levels may vary; you need to determine whether it requires land-filling to match the ground level with the neighbouring areas; otherwise, rainwater accumulation problems may occur.

Are there water bodies within the parcel of land? This can be detrimental because there are strict rules in many parts of the country against filling up water bodies; this will reduce the actual usage area and have commercial implications. Whether full-grown trees are required to be cut for construction of the dairy facilities - this is another critical area, which requires environmental clearance.

3. Connectivity

A vital location issue surrounding infrastructure of approach roads, nearness to highways (or main roads) and straightforward accessibility need to be considered. Distances to the nearest electricity point, water source are other factors that need checking.

herd of cows in cowshed stable on dairy farm
Selection Of Site For Dairy Farm

4. Transport

Transport facilities and options are important points for consideration in how to choose a business location. You need to check out the nearest commercial transport hub for organising your milk supplies. You have to also find out the facilities of public transport in reaching the dairy. How convenient will it be to reach the place? An easy connection is essential because a large number of associates like vendors, technicians, consultants and even customers will be coming to the site.

5. Peaceful area

Is the proposed site located in a peaceful neighbourhood? Is it free from all kinds of disturbances? These are some of the essential questions you need to answer and take into consideration before arriving at the final decision.

6. Special points

Is there an inherent advantage of the location? Like, closeness to a large colony or a township?  Residential areas nearby can serve as a potential customer base.

There may be other factors to be considered for the location choice specific to your requirements and the piece of land.

The final decision has to be taken after a thorough review of all the issues.

7. Cost budget

One issue that remains to be clarified in the finalisation process is the cost of land.  Your choice of location must be in line with the provision in the business plan.

The significance of a business plan is well established. You have to provide for all the planned activities in the program and monitor them closely during implementation.  Overstepping the limit of one activity may disturb the balance of your plan and put the whole project into jeopardy.

3. How To Make Selection Of Site For Dairy Farm In India?

Few additional points

We have considered the primary issues that govern the selection of an ideal location and land for a dairy. In the next step, we look at the animals' specific infrastructural needs, which can influence the selection. Among the many factors contributing to the success of a business, the quality of raw materials (or input, in case of service) play a significant role.

Also Read: Best Milk Brands in India

1. In the dairy business, you have to handle living animals as the input resource. Therefore, it is imperative to plan proper shelter and other facilities for taking good care of the animals. Your location decision must consider the land requirement with the following in mind:

  • Well-ventilated sheds or barns for the cattle, adequately protected from the weather.
  • Irrigation system for pasture
  • Milking area
  • Facility for pasteurisation and storage of milk
  • Feed storage
  • Manure storage
  • Proper waste management system

2. A dairy business plan should include provision for the cultivation of fodder crops for the cattle. Growing your crop gives you control over the quality and nutritional aspects of the feed for the cattle, leading to better yield in milk production; you can decide on the correct type of manure for growing the crop.

3. Adequate water (which helps in fodder cultivation) is a crucial requirement. It is essential to understand that breed of the cattle, a proper vaccination schedule, and quality fodder contribute to better milk yields.

4. One more from the list of experts' recommendations; locating your dairy in proximity to other farms can result in better support systems. Easy availability of inputs, veterinary support, transport arrangements, marketing can work favourably for the new entrepreneur. Besides, competition among the local units can improve both yield and quality.

5. Similarly, if there is a milk cooperative operating nearby, you can take advantage of selling additional quantities of milk (if any) to them.

6. A ballpark estimate of 1 acre of land is considered sufficient for suitable nurturing of 8 to 10 cows/buffaloes. It is also recommended to provide a space of about 60 to 100 sq. ft of open space per animal. The thumb rule for fodder cultivation is one acre of land for every five animals.

herd of cows eating hay in cowshed on dairy farm
Dairy Farm Location


A dairy firm business in India is a feasible business proposition; it is eco-friendly. Inclusive planning can take care of energy generation from cow-dung and manure for fodder cultivation from decomposed organic matters.

Choosing the location is a crucial decision, and you must know well how to select the right place for your business. Better land infrastructure or closeness to residential areas, near another dairy or proximity to transport facilities - all combined gives you the best choice. But practicality demands you select the one (location) that best meets your planned requirements.

Also read:

1) How To Start An Organic Farm Business In India?
2) What are Some Beneficial Government Policies for Small Home-Based Businesses in India?
3) Best Tips To Get Started With Farming And Agriculture
4) Should Agricultural Income be Taxed in India?
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs On Dairy Farm Location

Q. How much land is needed to start a dairy farm?

Ans. For a dairy to be economically viable, a dairy should have 15 to 20 cows and buffalos, depending on the location (rural /semi-urban). Generally, 1.5 to 2 acres of land is considered sufficient for managing 7 to 10 cows. Including a plan for fodder, cultivation will not only increase the viability of your unit but will give you better milk quality.

Q.  How do I benefit from locating my dairy near an existing one?

Ans. Look at the issue from the support facility angle. Suppliers can visit you regularly (they are coming to the nearby dairy in any case); veterinary doctors also will find it easy to call your dairy. Since the level of competition is not intense due to high consumption, there may be good cooperation between the two dairies leading to benefits for both.

Q. What is the most critical consideration for selecting a location for a dairy?

Ans. There are many equally crucial factors to consider, but the land and neighbourhood infrastructure, mainly transport, can be critical.