Prime Minister Formalisation of Micro Food Processing Enterprises (PMFME) scheme is the Government of India’s flagship initiative that involves uplifting the informal micro food processing sector. Started under the flag of Atmanirbhar Bharat Abhiyan, its purpose is to improve competitiveness as well as greater efficiency in micro food processing units found all over India.
With a prime focus on developing local production and enabling global competitiveness, the PMFME scheme has been the first step in India’s way towards formalizing and growing the food processing sector of the country.
This blog provides an in-depth overview of the PMFME scheme, showing the objectives, the eligibility criteria, and the wide-ranging benefits given to a micro food processing enterprise.
Introduction About PMFME Scheme
India’s food processing sector is among the largest in the world, supporting employment and the GDP. Most of this segment, however, operates in the unorganized segment; it faces major issues such as limited access to credit, lack of modern technology, and no market linkage. The government of India, therefore, realized the need and launched the PMFME scheme in 2020 to facilitate and formalize micro-food processing enterprises (MFPs).
This Scheme meets the critical requirements of the sector and is also in line with the vision of the government, which is to promote a self-reliant India (Atmanirbhar Bharat). The PMFME scheme supports small-scale food processing units through financial, technical, and infrastructural support in order to unleash their potential in competing with markets in the country and worldwide.
Objectives of the PMFME Scheme
The following are the significant objectives of the PMFME Scheme:
- Formalization of Sector- To put unorganized micro food processing units under a proper formal framework.
- Support to Local Products- To further promote one district-one product approach for enhancing branding and marketing of traditional and local food products
- Improving Competitiveness- Enhance the efficiency, productivity, and quality of micro food processing enterprises.
- Job creation- Empowerment through the generation of jobs in rural and semi-urban regions, more specifically for women and the socially backward.
- Availability of credit- Enable easy credit availability to help modernize and upgrade technology.
Eligibility for the PMFME Scheme
The PMFME scheme targets all entities dealing with food processing. It provides a wide outreach and is also available to unorganized sector entities. The eligibility criteria are as follows:
1. Individual Enterprises
- Existing Units- The Scheme is very helpful for small food processing units that are already working but are unregistered or informally registered. These units are required to change their processes and work according to the Scheme.
- New Entrepreneurs- All those who intend to establish a new food processing unit can apply. This makes it easier for innovation and entrepreneurship to develop in the industry.
- The location and alignment- They give priority to units, which are aligned with One District One Product initiative. They are those special local specialities like spices, fruits, or traditional snacks.
2. Farmer Producer Organizations
FPOs are groups of farmers who jointly process and market their produce. PMFME schemes support these bodies through provision for the purchase of equipment, branding, and training to increase the earnings of farmers from value addition.
3. Self-Help Groups
Seed capital for self-help groups, especially women-managed SHGs, would be available under the Scheme. With financial support, the Scheme equips SHGs to expand their operations and reach larger market systems.
4. Cooperatives
The registered cooperative engaged in food processing would also be eligible for support. The system stimulates collective efforts in branding, marketing, and infrastructural developments to allow cooperatives access to wider markets.
5. One District, One Product
The ODOP framework remains the core of PMFME. Units making products identified as district specialities, such as mangoes in Maharashtra or chillies in Andhra Pradesh, receive preference for financial and technical support in order to promote local economic development.
Benefits of the PMFME Scheme
The PMFME scheme encompasses a broad spectrum of advantages tailored to address unique challenges faced by micro-food processing enterprises-
1. Financial Support
- Seed Capital for SHGs- Rs 40,000 per member is provided as seed capital so that SHGs can buy raw materials and small equipment or undertake minor upgrades.
- Credit-Linked Subsidy- Individual units are eligible for 35% of the project cost as a subsidy to a maximum amount of Rs 10 lakh. The burden on the entrepreneur is minimized, and it encourages modernization.
- Support for Common Infrastructure- Funding for shared infrastructures like warehouses, cold storage, and processing units can be accessed by FPOs and cooperatives.
2. Technology Upgradation
Outdated equipment and practices are the most common challenges in the unorganized sector. PMFME scheme funds modern machinery and technology procurement that improves productivity, quality, and compliance with safety standards.
3. Capacity Building and Skill Development
Training and skill development along with food safety and hygiene practices, quality control and assurance techniques, packaging, branding, and marketing strategies are addressed in this Scheme, which will help entrepreneurs compete strongly in the domestic as well as overseas markets.
4. Branding and marketing support
- ODOP Branding- The program encourages making branding strategies on district-specific products.
- Access to markets- It provides support in digital marketing, e-commerce enablement, and attendance to trade fairs to reach larger markets.
5. Creation of Employment Opportunities
The Scheme facilitates the employment generation process, particularly in rural and sub-urban towns, through the support for microenterprises. Moreover, it augments the locality’s economy thus preventing the migrating trend to bigger cities.
6. Focus on Women and the Poor Segment
Schemes, especially for women entrepreneurs, Scheduled Castes / Scheduled Tribes, and other marginalized sections, give equal opportunities by promoting their share in economic participation.
7. Improved Market Linkages
The Scheme enables enterprises to establish direct contacts with larger markets, retailers, and wholesalers to ensure better profitability and reduced dependence on middlemen.
Beneficiaries of the PMFME Scheme
- Mango Processing in Maharashtra
Under the ODOP approach, financial assistance was given to a cluster of SHGs in Maharashtra to modernize the mango processing units. This helped the SHGs enhance the quality of the products, expand market reach, and generate employment in the region.
- Litchi Farmers in Bihar
PMFME initiated a high-tech litchi processing unit in a farmer-producer organization in the state of Bihar that reduced wastage and increased the income of the litchi farmers.
Conclusion
PMFME is a transformative initiative that looks toward formalizing and empowering the micro-food processing sector in India. The Scheme provides an integrated frame of action for growth and sustainability to address critical issues such as lack of infrastructure, limited access to credit, and outdated technology.
The PMFME scheme has been a tremendous opportunity for food processing sector entrepreneurs and organizations to upgrade their operations, increase their competitiveness, and contribute to becoming a global food processing hub. Through this, businesses can have long-term impacts on their community and economy.
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