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Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme

Focus: GS III- Agriculture

Why in News?

The centrally sponsored Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme, launched under the Aatmanirbhar Bharat Abhiyan, to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector, marks the completion of its two years.

About PM-FME Scheme:

Nodal: Ministry of Food Processing Industries(MOFPI). 

  •  It is a centrally sponsored scheme.
  • Aim is to modernize and enhance the competitiveness of the existing individual micro enterprises and ensure their transition to formal sector 
  • To provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain. 
  • Duration: The PM-FME scheme will be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.  
  • Funding: The expenditure under the PM-FME scheme would be shared in 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs. 
Objectives
  • Increase in access to finance by micro food processing units.
  • Increase in revenues of target enterprises.
  • Enhanced compliance with food quality and safety standards.
  • Strengthening capacities of support systems.
  • Transition from the unorganized sector to the formal sector.
  • Special focus on women entrepreneurs and Aspirational districts.
  • Focus on minor forest produce in Tribal Districts.
Eligibility
  • Scheme is for All India basis.
  • Support to Individual micro units:
    • Micro enterprises will get credit linked subsidy @ 35% of the eligible project cost with ceiling of Rs.10 lakh.
    • Beneficiary contribution will be minimum 10% and balance from loan.
    • On-site skill training & Handholding for DPR and technical upgradation.
  • Support to FPOs/SHGs/Cooperatives:
    • Seed capital will be given to SHGs (@Rs. 4 lakh per SHG) for loan to members for working capital and small tools.
    • Grant for backward/ forward linkages, common infrastructure, packaging, marketing & branding.
    • Skill training & Handholding support.
    • Credit linked capital subsidy.

Milestones achieved under the PMFME Scheme

One District One Product
  • Ministry of Food Processing Industries approved ODOP for 707 districts for 35 States and UTs including 137 unique products as per the recommendations received by States/UTs.
  • The GIS ODOP digital map of India has been launched to provide details of ODOP products of all the States and UTs.
  • The digital map also has indicators for Tribal, SC, ST, and aspirational districts.
  • It will enable stakeholders to make concerted efforts for its value chain development.
Convergence
  • Ministry signed three joint letters with the Ministry of Rural Development the Ministry of Tribal Affairs, and the Ministry of Housing and Urban Affairs.
  • Ministry of Food Processing Industries has signed various Memorandum of Understanding.
  • Agreement has been signed with the Union Bank of India as the Nodal Bank of the scheme and MoUs with 11 banks as official lending partners for the PMFME Scheme.
Capacity Building and Incubation Centres
  • National Institute of Food Technology Entrepreneurship and Management (NIFTEM) and the Indian Institute of Food Processing Technology (IIFPT) have been performing a key role in providing training and research support to selected enterprises/groups/clusters in partnership with the State Level Technical Institutions.
  • The training of 371 Master Trainers has been conducted under the Entrepreneurship Development Programme (EDP) & various food domains.
  • 54 Common Incubation Centres have been approved in the 17 States.
Seed Capital
  • Implemented with the support of the National Rural Livelihood Mission (NRLM) and its network of State Rural Livelihood Mission (SRLMs) operating at the state level.
  • The PMFME Scheme envisages financial support of Rs. 40,000 for working capital and purchase of small tools for each member of SHGs engaged in food processing activities.
Institutional Mechanism
  • All the 35 participating States and UTs have constituted/ identified their respective State Nodal Agencies, State Level Approval Committees, District Level Committees, and State Level Technical Institutions.
  • Moreover, a call centre has been established at NIFTEM to address queries and guide the stakeholders of the Scheme.

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December 2022
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