PM Formalization of Micro Food Processing Enterprises (PM FME) scheme

PM Formalization of Micro Food Processing Enterprises (PM FME) scheme

Union Minister for Food Processing Industries Smt. Harsimrat Kaur Badal launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme on 29th June 2020 as a part of “Atmanirbhar Bharat Abhiyan”. PM FME Scheme would generate total investment of Rs 35,000 crore and generate 9 lakh skilled and semi-skilled employment and benefit 8 lakh units through access to information, training, better exposure and formalization. 

The un-organized food processing sector comprising nearly 25 lakh units contribute to 74% of employment in food processing sector. Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises supporting livelihood rural household and minimizing their migration to urban areas. These units largely fall within the category of micro enterprises.

Union FPI Minister

Details of the PM FME scheme

  • Centrally Sponsored PM Formalisation of Micro food processing Enterprises (PM FME) scheme” to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.
  • The expenditure under the scheme would to be shared in 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs.
  • The Scheme adopts One District One Product (ODODP) approach to reap benefit 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 product could be a perishable produce based product or cereal based products or a food product widely produced in a district and their allied sectors. Support for common infrastructure and branding & marketing would be for ODOP products. 
  • The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.
  • Existing 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.
  • Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools. 
  • FPOs/ SHGs/ producer cooperatives would be provided credit linked grant of 35% for capital investment along the value chain. 
  • Support would be provided through credit linked grant @ 35% for development of common infrastructure including common processing facility, lab, warehouse, cold storage, packaging and incubation center through FPOs/SHGs/cooperatives or state owned agencies or private enterprise to use by micro units in the cluster.
  • Support for marketing & branding would be provided to develop brands for micro units and groups with 50% grant at State or regional level which could benefit large number of micro units in clusters.
  • The Scheme places special focus on capacity building and research. NIFTEM and IIFPT, two academic and research institutions under MOFPI along with State Level Technical Institutions selected by the States would be provided support for training of units, product development, appropriate packaging and machinery for micro units.
  • All the processes of the Scheme would take place on an MIS including applications by entrepreneurs, their processing, approval of various projects by the States and MoFPI, release of grant and other funds and monitoring of the project.
  • Individual entrepreneurs and other stake holders desirous of availing assistance under the scheme may contact the State Nodal Agencies of their respective states/ UTs regarding the roll out of scheme and contact points at the district level.
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