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PM Formalization of Micro Food Processing Enterprises Scheme

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Under the ‘Atma Nirbhar Bharat Abhiyan’ and ‘Vocal for Local’ initiatives, India’s Prime Minister, Mr. Narendra Modi, inaugurated the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme on June 29, 2020. The program is designed to provide micro food processing businesses in the country with technical, financial, and business assistance.

Features of the PM Formalization of Micro Food Processing Enterprises Scheme:

  • The PMFME Scheme has borrowed the One District One Product (ODOP) concept from the Uttar Pradesh (UP) government’s ODOP program, which was introduced in 2018. 
  • Under this technique, the state determines and picks a food product for the district, which might be a perishable agricultural crop, such as cereals, or a food product mainly produced in the community.
  • Some of the food products covered by the ODOP are tomato, mango, potato, litchi, millet-based commodities, fishing, poultry, meat, and animal feed.
  • The initiative also supports traditional and creative products such as honey, minor forest products in tribal areas, and herbal items such as turmeric.
  • Under the PMFME plan, micro food processing firms (owned individually or collectively) that adopt the ODOP strategy receive aid in the form of new micro food processing equipment and marketing and branding support. As of June 2021, approximately 707 districts in 35 states and union territories had chosen ODOP, which included 137 different goods.

Funding Details of the PM Formalization of Micro Food Processing Enterprises Scheme:

  • The following structure elaborates upon Pradhan Mantri’s Formalization of Micro Food Processing Enterprises’ scheme allocation of funds.
  • Under this scheme, the unorganized microprocessing units are given a credit-linked capital grant of 35% of the project’s total cost, with a maximum ceiling cost of ₹10 lakh per unit. This amount is given for improvisations in the capital. In addition, members involved in micro food processing are eligible to receive a seat funding of ₹40,000 for working capital and the purchase of small tools.
  • As of June 2021, the State Nodal Agency has approved seed capital for 8,040 members and disbursed funds. The State Rural Livelihood Mission would receive Rs. 25.25 crores.

Period of Implementation & Eligibility of the PM Formalization of Micro Food Processing Enterprises Scheme:  

Narendra Modi announces the Micro Food Processing Enterprises initiative to help India’s economy and citizens. The following entities are eligible under the Pradhan Mantri Formalization of Micro Food Processing Enterprises scheme:

  1. The scheme encompasses people from all over India. 
  2. It intends to support and guide individual micro-enterprises. 
  3. The micro-unit will receive a credit link subsidy only at 35% of the total cost of the project, which would have a ceiling of ₹10 lakh. 
  4. The beneficiary’s contribution has to be a minimum of 10%, and the balance should be from the loan itself. 
  5. The scheme provides skills training and guidance based on all sites for DPR and the up-gradation of technology.

Conclusion:

The unorganized food processing sector comprises 75% of 25 lakh units. 66% are based in rural areas, and around 80% are family-based enterprises that assist the livelihood of rural households reducing their migration to urban areas. These businesses are primarily categorized as micro-businesses. This food processing sector faces several issues that have led to its limited performance and growth. These issues include lack of access to modern technology and equipment, training, access to institutional credit, lack of essential awareness of quality control of products, lack of marketing and branding skills, etc.

 


Last Updated : 03 Nov, 2022
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