PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme

The PM Formalization of Micro Food Processing Enterprises (PMFME) scheme is a pioneering initiative launched by the Ministry of Food Processing Industries (MoFPI) in the year 2020. This visionary scheme is designed to bring about a significant transformation in the unorganized segment of the food processing industry in India. It seeks to enhance the competitiveness of both new and existing micro-enterprises while promoting the formalization of this vital sector. In this comprehensive article, we will delve into the details of the PMFME scheme, its objectives, components, funding patterns, eligibility criteria, and the impact it is poised to have on India’s food processing industry.

Scheme Overview

1. Scheme Name: PM Formalization of Micro Food Processing Enterprises (PMFME) scheme
2. Year of Implementation: 2020
3. Total Fund Allocation: ₹10,000 crores for the coverage of 2,00,000 enterprises over a span of 5 years
4. Type of Government Scheme: Centrally Sponsored Scheme
5. Sponsored by: Ministry of Food Processing Industries (MoFPI)
6. Where to Apply: Any Banks

Features

The PMFME scheme is characterized by its unique features and funding patterns, which have been carefully structured to cater to the diverse needs of micro-food processing enterprises across the country. Let’s take a closer look:

Funding Pattern

The scheme’s funding pattern varies depending on the region

1. Central and State Union Territories (UTs) with the legislature: The central government provides 60%, while the state government contributes 40%.
2. Centre and North Eastern and Himalayan States: The central government provides 90%, and the state government contributes 10%.
3. Centre for other UTs: The central government provides 100% funding.

Programme Components

The PMFME scheme encompasses several key components to support micro-food processing enterprises effectively:

1. Support to Individual Micro Enterprises

• Under this component, individual micro food processing units are provided with a credit-linked subsidy of 35% of the eligible project cost, with a maximum ceiling of ₹10 Lakhs per unit.
• Beneficiaries are required to contribute a minimum of 10% of the project cost, with the remaining amount being availed as a loan from a bank.

2. Training Support to Individual Units

• To ensure the skill development and capacity building of micro-enterprises, training support is provided.

3. Support to Clusters and Groups (FPOs/SHGs/Producer Cooperatives)

• Farmer Producer Organizations (FPOs) and Producer Cooperatives receive grants at 35% with credit linkage, subject to specific criteria.
• Self Help Groups (SHGs) are granted seed capital of ₹40,000 per member for working capital and the purchase of small tools at the federation level.

4. Support for Common Infrastructure

• Credit-linked grants at 35% are available to support the creation of common infrastructure that can be utilized by various units and the public on a hiring basis.

5. Branding and Marketing Support

• This support is extended to groups of FPOs, SHGs, Cooperatives, or Special Purpose Vehicles of micro food processing enterprises.
• Marketing and branding support is provided for products aligned with the One District One Product (ODOP) approach.
• To be eligible for assistance, products must have a minimum turnover of ₹5 crore.
• Support for branding and marketing is limited to 50% of the total expenditure.

6. Capacity Building & Research Support

• The scheme supports national institutions such as the National Institute for Food Technology Entrepreneurship & Management and the Indian Institute of Food Processing Technology (IIFPT).
• State-level technical institutions also receive training support.
• Handholding support is provided to micro food processing enterprises.

Latest News

The PM Formalization of Micro Food Processing Enterprises (PMFME) scheme, under the Ministry of Food Processing Industries (MoFPI), has identified 137 distinct products in 713 districts across 35 States/Union Territories as part of the One District One Product (ODOP) initiative. These selections were made in collaboration with State/UT recommendations and consultations with the Ministry of Agriculture & Farmers Welfare. Additionally, MoFPI has designated 15 unique products from all 24 districts in Jharkhand as ODOP.

Benefits of PMFME Scheme

The PMFME scheme offers a wide array of benefits and opportunities for micro-food processing enterprises in India:

• Formalization: By providing financial assistance and support, the scheme encourages the formalization of micro-food processing enterprises, which is crucial for their growth and sustainability.
• Competitiveness: Through credit-linked subsidies, training, and common infrastructure development, the scheme enhances the competitiveness of these enterprises in a rapidly evolving market.
• Support for Farmer Producer Organizations: FPOs, SHGs, and Producer Cooperatives are pivotal in strengthening the agricultural and food processing sectors, and the scheme offers them the necessary financial backing.
• Employment Generation: As microenterprises expand and become more competitive, they generate employment opportunities for skilled and semi-skilled workers, contributing to economic growth.
• ODOP Approach: The scheme adopts the One District One Product (ODOP) approach, which leverages the strengths and resources of specific regions to drive economic development. This approach provides a framework for value chain development and infrastructure alignment.
• Product Diversification: While the scheme primarily supports ODOP products, it also extends its benefits to existing units producing other products, thereby encouraging diversification in the food processing industry.

Drawback

While the PMFME scheme is undoubtedly a game-changer for the food processing industry, there are certain limitations to consider. It is important to note that the scheme may not be as effective for segments of the farming community that lack access to essential resources and information. Additionally, the success of the scheme is contingent on its efficient implementation at the grassroots level.

How to Apply?

Applying for the PMFME scheme is a straightforward process that can be broken down into several steps.

Step 1: Visit the nearest bank.

Step 2: Fill out the application form with the required details, including information about your micro food processing enterprise.

Step 3: Await the review and approval process, during which your application will be assessed for eligibility and compliance with the scheme’s guidelines.

Step 4: Once your application is approved, you can avail of the scheme benefits for your micro food processing enterprise, including credit-linked subsidies and training support.

Documents Required

• When applying for the PMFME scheme, ensure that you have the following documents ready
• Aadhaar card: As proof of identity and residence.
• Business registration documents: Including licenses and permits required for operating a food processing enterprise.
• Educational qualification certificates: No minimum educational qualification for this scheme.
• Detailed project proposal: Outline your enterprise’s objectives, plans, and the specific project for which you are seeking support.
• Bank account details: For the disbursement of funds and subsidies.
• Any other relevant documents: Such as experience certificates or endorsements from relevant authorities.

Conclusion

The PM Formalization of Micro Food Processing Enterprises (PMFME) scheme represents a significant stride towards the formalization and empowerment of micro food processing enterprises in India. With its emphasis on competitiveness, support for Farmer Producer Organizations, and adoption of the One District One Product (ODOP) approach, this scheme not only boosts economic growth but also paves the way for a more resilient and dynamic food processing sector. By nurturing entrepreneurship, creating employment opportunities, and promoting sustainability, PMFME is poised to leave a lasting impact on India’s food processing landscape, contributing to its growth and prosperity.