The Indian food processing sector has been bustling with numerous initiatives lately, aimed at improving agricultural marketing, formalizing the micro food processing enterprises, and enhancing the competitiveness of these enterprises. The most recent among these initiatives is the launch of three One District One Product (ODOP) brands under the Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme.
The Launch of ODOP Brands
In a significant development, the Ministry of Food Processing Industries and the National Agricultural Cooperative Marketing Federation of India Limited (NAFED) unveiled three ODOP brands under the PMFME Scheme. The Ministry has also entered into an agreement with NAFED to create 10 additional brands from selected 20 ODOPs under the branding and marketing segment of the PMFME scheme.
Understanding the PMFME Scheme
Initiated under the Atmanirbhar Abhiyan in 2020, the PMFME Scheme is designed to increase competitiveness in the unorganised sector of the food processing industry by encouraging the formalization of individual micro-enterprises. The scheme intends to extend its support to Farmer Producer Organisations, Self Help Groups, and Producers Cooperatives throughout their value chain.
The PMFME Scheme applies the ODOP approach to benefit from economies of scale in buying inputs, availing common services, and marketing products. The scheme will be rolled out over a span of five years, from 2020-21 to 2024-25.
Key Aspects of the PMFME Scheme
The PMFME Scheme adopts the ODOP approach where states identify food products for districts considering existing clusters and raw material availability. This product could range from perishable produce like mango or potato to cereal-based or widely produced food items such as millet based products, fisheries, poultry etc.
Additional focus areas encompass waste to wealth products, minor forest products, and Aspirational Districts. The scheme envisages capacity building and research in partnership with academic and research institutions under the Ministry of Food Processing Industries (MoFPI) besides State Level Technical Institutions. These institutions will offer support for unit training, product development, appropriate packaging, and machinery for micro units.
Financial Assistance Under PMFME Scheme
The PMFME Scheme provides financial aid for existing individual micro food processing units looking to upgrade. Such units can avail credit-linked capital subsidy at 35% of the eligible project cost, capped at Rs.10 lakh per unit. Support is also extended for the development of common infrastructure including common processing facility, lab, warehouse, etc. through credit linked grants at 35%. This support is provided through Farmer Producer Organisations, Self Help Groups, cooperatives, state owned agencies, or private enterprises.
Need for the PMFME Scheme
Approximately 25 lakh units form the unorganised food processing sector, contributing to 74% of employment in this sector. About 66% of these units are rural based while around 80% of them are family-based enterprises supporting the livelihood of rural households and reducing their urban migration. These units primarily belong to the micro-enterprises category. However, they face several challenges including lack of access to modern technology & equipment, training, institutional credit, awareness on quality control of products, branding and marketing skills etc.
About NAFED
NAFED is a top marketing cooperatives organisation for agricultural produce in India. Marking its inception on 2nd October 1958, it is registered under the Multi-State Co-operative Societies Act, 2002. It serves as one of the largest procurement and marketing agencies for agricultural products in the country. It aims to organise, promote and develop the processing, marketing and storage of agricultural, horticultural and forest produce. Additionally, it works towards distributing agricultural machinery, implements and other inputs, undertaking inter-state, import and export trade, and offering technical advice in agricultural production.