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PM FME – Formalization of Micro Food Processing Enterprises Scheme.

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PM FME – Formalization of Micro Food Processing Enterprises Scheme.

  • 03 Sep
The Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme, launched under the Atmanirbhar Bharat Abhiyan, completed its one year on 29th June.

 

Union Minister for Food Processing Industries has virtually inaugurated the capacity building component of the Pradhan Mantri Formalisation of Micro food processing Enterprises scheme (PM-FME Scheme).

 

About the capacity building component of the PM-FME scheme

Under the capacity building component of the PM-FME scheme, training of the Master Trainers would be delivered through online mode, classroom lecture and demonstration, and self-paced online learning material.NIFTEM and IIFPT are playing a key role by providing training and research support to selected enterprises/groups/clusters in partnership with State Level Technical Institutions.

 

About the PM-FME Scheme

  • Pradhan Mantri Formalisation of Micro food processing Enterprises (PM-FME) Scheme is a centrally sponsored scheme launched under the Aatmanirbhar Bharat Abhiyan.
  • The Scheme adopts One District One Product (ODOP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
  • The scheme would provide support to FPOs/SHGs/Producer Cooperatives for capital investment along the entire value chain with credit linked grant at 35%.

 

Ministry of Food Processing Industries (MoFPI), in partnership with the State/ UT Governments, has launched an all India Centrally Sponsored PM Formalisation of Micro food processing Enterprises Scheme (PM FME Scheme) for providing financial, technical and business support for upgradation of existing micro food processing enterprises.

Ministry of Food Processing Industries (MoFPI), in partnership with the States, has launched an all India centrally sponsored "PM Formalisation of Micro Food Processing Enterprises Scheme (PM FME Scheme)" for providing nancial, technical and business support for upgradation of existing micro food processing enterprises. The objectives of the scheme are :

(i) Support for capital investment for upgradation and formalization with registration for GST, FSSAI hygiene standards and Udyog Aadhar;

(ii) Capacity building through skill training, imparting technical knowledge on food safety, standards & hygiene and quality improvement;

(iii) Hand holding support for preparation of DPR, availing bank loan and upgradation;

(iv) Support to Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), producers cooperatives for capital investment, common infrastructure and support branding and marketing.

 

Overview

 The unorganized food processing sector in the country comprises nearly 25 lakh food processing enterprises which are unregistered and informal. With only 7% of investment in plant & machinery and 3% of outstanding credit, the unorganized enterprises contribute to 74% of employment (a third of which are women), 12% of output and 27% of the value addition in the food processing sector. Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises . Most of these units falls under category of micro manufacturing units in terms of their investment in plant & machinery and turnover.

The unorganized food processing industry in India faces challenges that limit its development and weakens performance. These challenges include:

(a) lack of productivity and innovation due to limited skills and access to modern technology and machinery for production and packaging;

(b) deficient quality and food safety control systems, including lack of basic awareness on good hygienic and manufacturing practices;

(c) lack of branding & marketing skills and inability to integrate with the supply chains, etc.;

(d) capital deficiency and low bank credit.

 

Aims

The scheme aims to:

i) Enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector; and 1NSSO, 2015 5

 ii) Support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.

 

Objectives

The objectives of scheme are to build capability of microenterprises to enable:

 i) Increased access to credit by existing micro food processing entrepreneurs, FPOs, Self Help Groups and Co-operatives;

 ii) Integration with organized supply chain by strengthening branding & marketing;

iii) Support for transition of existing 2,00,000 enterprises into formal framework;

iv) Increased access to common services like common processing facility, laboratories, storage, packaging, marketing and incubation services;

v) Strengthening of institutions, research and training in the food processing sector; and vi) Increased access for the enterprises, to professional and technical support.

 

One District One Product

 The Scheme adopts One District One Product (ODOP) approach to reap benet of scale in terms of procurement of inputs, availing common services and marketing of products. The States would identify food product for a district keeping in view the existing clusters and availability of raw material. The ODOP could be a perishable agri-produce, cereal based product or a food product widely produced in a district and their allied sectors. Illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet based products, sheries, poultry, meat as well as animal feed among others. Preference would be given to those producing under ODOP approach. However, units producing other products would also be supported. Support for common infrastructure and branding & marketing would only be given for products under ODOP approach.

 

Upgradation of Individual Micro Food Processing Units

Individual micro food processing units desirous of upgradation of their unit can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit. The beneciar y contribution should be minimum 10% and the balance should be loan from a Bank.

 

Support to FPOs / SHGs / Cooperatives

The scheme would provide support t o F P O s/ S H G s/ P r o d u c e r Cooperatives for capital investment along the entire value chain with credit linked grant @ 35%.

 

Seed Capital to SHG

Seed capital @ Rs. 40,000/- per SHG member would be provided to those engaged in food processing for working capital and purchase of small tools. Seed capital as grant would be provided to the SHG federation which, in turn, would be extended to members as loan through the SHGs.

 

Common Infrastructure

Credit linked grant @35% would be provided to FPOs, SHGs, cooperatives, State owned agencies and private entrepreneurs for development of common infrastructure including common processing facility, lab, warehouse, cold storage, packaging and incubation center.

 

Branding and Marketing Support

Marketing and branding support would be provided at State or regional level to FPOs/ SHGs/ Cooperatives or an SPV of micro food processing enterprises under the scheme following the ODOP approach for developing common packaging & branding with provision for quality control, standardization and adhering to food safety parameters for consumer retail sale. These organisations would be supported based on DPR prepared by them and recommended by the State Nodal Agency. Support for branding and marketing would be limited to 50% of the total expenditure.

 

Procedure for applying

Existing food processing units desirous of seeking assistance could apply online on FME portal. The Resource Persons (RPs) engaged for eld level support would provide handholding support for preparation of DPR, availing bank loan, obtaining necessary registration and licences including food standards of FSSAI, Udyog Aadhar and GST. Applications for support for FPOs / SHGs / cooperatives, common infrastructure and marketing & branding could be submitted to the State Nodal Agency (SNA) along with a DPR. The SNA would appraise the project and recommend it for bank loan. Grant by the Government would be deposited in the account of beneciary in the lending bank. If after a period of three years from the disbursement of last tranche of the loan, the beneciary account is still standard and the Unit is operational, this amount would be adjusted in the bank account of beneciary.

 

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