Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

About Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

• Launched on June 29, 2020, PMFMPE is a Centrally Sponsored Scheme by the Ministry of Food Processing Industries.
• It is designed to address the challenges faced by micro-enterprises and to tap the potential of groups and cooperatives to support the upgradation and formalization of these enterprises.
• Objectives: To build the capability of microenterprises to enable:
  • Increased access to credit by existing micro food processing entrepreneurs, FPOs, self-help groups, and co-operatives.
  • Integration with an organized supply chain by strengthening branding & marketing.
  • Support for the transition of existing 2,00,000 enterprises into a formal framework.
  • Increased access to common services like common processing facilities, laboratories, storage, packaging, marketing, and incubation services.
  • Strengthening of institutions, research, and training in the food processing sector; and
  • Increased access for enterprises, to professional and technical support.
• Outlay:
  • The scheme envisages an outlay of ₹ 10,000 crores over a period of five years from 2020-21 to 2024-25.
  • The expenditure under the scheme would be shared in a 60:40 ratio between Central and State Governments, in a 90:10 ratio with the Northeastern and the Himalayan States, a 60:40 ratio with UTs with the legislature and 100% by the Center for other UTs.
• Coverage:
  • Under the scheme, 2,00,000 micro food processing units will be directly assisted with credit-linked subsidies.
  • Adequate, supportive common infrastructure and institutional architecture will be supported to accelerate the growth of the sector.
• Benefits: The program has four broad components addressing the needs of the sector:
  • Support to individuals and groups of micro-enterprises.
  • Branding and Marketing support.
  • Support the strengthening of institutions.
  • Setting up a robust project management framework.
• Financial Support:
  • Support to Individual micro-units:
    • Micro enterprises will get credit-linked subsidy at 35% of the eligible project cost, with a ceiling of Rs.10 lakh.
    • The beneficiary contribution will be a minimum of 10%, and the balance from the loan.
  • Support to FPOs/SHGs/Cooperatives:
    • Seed capital will be given to SHGs (at Rs. 4 lakh per SHG) for loans to members for working capital and small tools.
    • Grant for backward/ forward linkages, common infrastructure, packaging, marketing, and branding.
• The Eligible Borrowers for PMFMPE can be:
  • Farmer Producer Organization (FPO)
  • Self-Help Groups
  • Co-operatives
  • Existing Micro Food Processing Entrepreneurs
  • New Units, whether for individuals or groups, would only be supported for One District One Product (ODOP).

Q1) What is a Farmer Producer Organization (FPO)?

A Farmer Producer Organization (FPO) is a type of Producer Organisation (PO) where farmers are its members. The PO is an organisation of any produce, such as non-farm products, agricultural, artisan products, etc., by producers. The Small Farmers’ Agribusiness Consortium (SFAC) provides support for FPOs promotion.

Source: PMFME scheme awareness camp held in Srinagar