About:

The Ministry of Food Processing Industries (MoFPI) has launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme to bring in new technology, apart from affordable credit to help small entrepreneurs penetrate new markets.

The scheme will be implemented for five years until 2024-25 and is expected to generate a total investment of Rs. 35,000 crore and 9 lakh skilled and semi-skilled employment.

Funding Pattern:

• It is a centrally sponsored scheme with an outlay of Rs. 10,000 crore.
• The expenditure under the 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.

Key Features of the Scheme:

One District One Product (ODOP) Approach: 

• The States would identify food products for districts keeping in view the existing clusters and availability of raw material.
• The ODOP could be a perishable produce based or cereal based or a food item widely produced in an area. E.g. mango, potato, pickle, millet based products, fisheries, poultry, etc.

Credit Linked Capital Subsidy:

• Existing Individual micro food processing units desirous of upgradation of their unit can avail credit-linked capital subsidy at 35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
• Seed capital at Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools.
• FPOs/ SHGs/ producer cooperatives or state owned agencies or private enterprise.would be provided a credit linked grant of 35% for capital investment along the value chain.

Capacity building and research: 

Academic and research institutions under MoFPI along with State Level Technical Institutions would be provided support for training of units, product development, appropriate packaging and machinery for micro units.

What is the need for the scheme?

• There are about 25 lakh unregistered food processing enterprises which constitute 98% of the sector and are unorganized and informal. Nearly 66 % of these units are located in rural areas and about 80% of them are family-based enterprises.
• This sector faces a number of challenges including the inability to access credit, high cost of institutional credit, lack of access to modern technology, inability to integrate with the food supply chain and compliance with the health and safety standards.
• Strengthening this segment will lead to reduction in wastage, creation of off-farm job opportunities and aid in achieving the overarching Government objective of doubling farmers’ income.

https://pib.gov.in/PressReleasePage.aspx?PRID=1635088