PM Formalization of Micro Food Processing Enterprises Scheme

PM Formalization of Micro Food Processing Enterprises Scheme

News: The Ministry of Food Processing Industries (MoFPI) is implementing a centrally sponsored PM Formalisation of Micro Food Processing Enterprises Scheme (PMFME) Scheme for providing financial, technical, and business support to micro food processing enterprises in India.

About PMFME:
 The PMFME scheme aims to enhance the competitiveness of new and existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector.
 The PMFME scheme is operational for a period of five years from 2020-21 to 2024-25 with an outlay of Rs. 10,000 Crore.
 The scheme adopts the One District One Product (ODOP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
 It also focusses on waste to wealth products, minor forest products and Aspirational Districts.

What kind of assistance is available under PMFME scheme? (Please note you are not advised to remember every figure in detail but understand how and who are the beneficiaries of such schemes)
 Credit-linked capital subsidy of 35% of the eligible project cost, with a maximum ceiling of Rs.10 lakh per unit.
 Seed capital up to Rs. 40,000/- per member of SHG engaged in food processing for working capital and purchase of small tools, subject to a maximum of Rs. 4 lakh per SHG.
 Credit-linked capital subsidy of 35%, with a maximum of Rs. 3 crore, to support FPOs, SHGs, Cooperatives, and any Government agency for setting up of common infrastructure.
 The scheme envisages training for Entrepreneurship Development Skilling (EDP+), a program modified to meet the requirements of the food processing industry and product specific skilling.
 District Resource Persons (DRPs) have been appointed to provide handholding support to micro food processing enterprises for the compliance of FSSAI and other statutory requirements.

What are various initiatives taken by government to improve the FPIs?
 A favourable policy environment is said to have played a major role in the rapid expansion of this sector.
 The government has allowed 100% foreign direct investment under the automatic route for manufacturing and retail trading, including e-commerce, of food products made in India.
 Besides, it has extended the Production-Linked Incentive Scheme to this industry to impart further impetus to its growth.
 Pradhan Mantri Kisan SAMPADA Yojana – It seeks to create modern infrastructure for Food processing mega food parks/clusters and individual units. Creates effective backward and forward linkages linking farmers, processors, markets.

Why should small and micro food processing enterprises be promoted?
 They are economically viable as compared to larger enterprises due to reasons such as perishable and seasonal nature of farm produce, shortage of commodity-specific warehousing and transportation facilities and issues related to product quality, especially in terms of its suitability for processing.

Way forward
 Value-enhancing treatment needs to be stepped up substantially and facilitate year round availability of seasonal agricultural products.
 Promote small-scale and village-level agro-processing units even while continuing to support the organised sector food-processing industry.
 Farmers should be encouraged to set up mini or micro agro-processing centres, individually or collectively, through cooperatives or farmers’ producer organisations. 

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