The Ministry of Food Processing Industries (MoFPI) under the ambit of the ‘Atmanirbhar Bharat Abhiyan’ has introduced the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme. This initiative aims to garner a total investment of Rs. 35,000 crore while facilitating employment for up to 9 lakh skilled and semi-skilled workers.
One District One Product Approach
The PM FME scheme accentuates on the “One District One Product (ODOP)” method. It empowers the States to single out food items for districts considering existing clusters and raw material availability. The product identified could be perishable produce-based, cereal-based or a popularly produced food item in a specific locale. Examples include mangoes, potatoes, pickles, millet-based products, fisheries, poultry, among others.
Other Focus Areas
In addition to the ODOP approach, the scheme also emphasizes on Waste to Wealth products, minor forest products, and Aspirational Districts to harness maximum development and growth.
Capacity Building and Research
The MoFPI seeks to collaborate with academic and research institutions at state level to extend support in training units, devising new products, determining appropriate packaging, and supplying machinery for micro-units, thereby aiding capacity building and research.
Financial Support
Micro food processing units intending to upgrade their setups can receive credit-linked capital subsidy, which stands at 35% of the eligible project cost, capped at a maximum of Rs. 10 lakh per unit. Moreover, support will be extended through credit linked grants at 35% for developing common infrastructure such as common processing facility, laboratory, warehouse etc. A seed capital of Rs. 40,000 per Self Help Group (SHG) member will serve as an initial aid for managing working capital and purchasing small tools.
Scheme Duration
The implementation of the PM FME scheme will span over five years, from 2020-21 to 2024-25.
Funding Details
This centrally sponsored scheme has an outlay of Rs. 10,000 crore. The expenditure will be divided in a 60:40 ratio between Central and State Governments, in a 90:10 ratio with North Eastern and Himalayan States, a 60:40 ratio with Union Territories with legislature, and borne wholly by Centre for other Union Territories.
Necessity of the Scheme
Nearly 25 lakh units, comprising 74% of the unorganized food processing sector, contribute significantly to employment in the food processing realm. Approximately 66% of these units are based in rural areas, with 80% functioning as family-based enterprises that support rural livelihoods and impede migration to urban areas. However, these units face a multitude of challenges such as limited access to modern technology & equipment, institutional credit, inadequate awareness on quality control of products, and lack of branding & marketing skills, which hinders their growth and productivity. Therefore, the introduction of the PM FME scheme is anticipated to revitalize this sector.
