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

1 min read
Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme Blog Image


A one-day awareness programme on the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme was recently held in Srinagar.

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