PMFME

Ministry of Food Processing Industries (MoFPI) launched a pan India scheme called ‘Pradhan Mantri Formalisation of Micro Food Processing Enterprises’, in partnership with the State/ UT Governments under Aatmanirbhar Bharat Abhiyan which aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector and support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.

Objectives of PMFME

The objectives of the scheme are 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 the formal framework;

• Increased access to common services like common processing facility, laboratories, storage, packaging, marketing, and incubation services;

• Strengthening of institutions, research, and training in the food processing sector;

• Increased access for the enterprises, to professional and technical support;

Aims of PMFME

The scheme aims to:

• Enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector; and 

• Support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.

Components of PMFME

The programme has four broad components addressing the needs of the sector: 

• Support to individuals and groups of micro enterprises; 

• Branding and Marketing support; 

• Support for strengthening of institutions; 

• Setting up a robust project management framework.

Support to Individual Micro Enterprises

Individual micro food processing units would be provided credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10.0 lakh per unit. Beneficiary contribution should be a minimum of 10% of the project cost with balance being loan from Bank.

Eligibility Criteria for Individual Micro Enterprises under PMFME

Following are the eligibility criteria for individual micro enterprises under PMFME

• Existing micro food processing units in operations; 

• Existing units should be those identified in the SLUP for ODOP products or by the Resource Person on physical verification. In case of units using electrical power, electricity bill would support it being in operations. For others units, existing operations, inventory, machines and sales would form the basis; 

• The enterprise should be unincorporated and should employ less than 10 workers; 

• The enterprise should preferably be involved in the product identified in the ODOP of the district. Other micro enterprises could also be considered;

• The applicant should have ownership right of the enterprise; 

• Ownership status of enterprise could be proprietary / partnership firm; 

• The applicant should be above 18 years of age and should possess at least VIII standard pass educational qualification; 

• Only one person from one family would be eligible for obtaining financial assistance. The “family” for this purpose would include self, spouseand children; 

• Willingness to formalize and contribute10% of project cost and obtain Bank loan; 

• Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental workshed could be included in the project cost. Lease rental of workshed to be included in the project cost should be for a maximum period of 3 years only

Group Category

The Scheme would support clusters and groups such as FPOs/SHGs/ producer cooperatives along their entire value chain for sorting, grading, assaying, storage, common processing, packaging, marketing, processing of agri-produce, and testing laboratories. 

Farmer Producer Organizations (FPOs)/Producer Cooperatives 

FPOs and Producer Cooperatives would be provided the following support:

• Grant @35% with credit linkage; 

• Training support; 

• Maximum limit of grant in such cases would be as prescribed.

Eligibility Criteria for Co-operatives/FPOs

Following are the eligibility criteria for co-operative/ FPOs

• It should preferably be engaged in processing of ODOP produce; 

• It should have minimum turnover of Rs.1 crore; 

• The cost of the project proposed should not be larger than the present turnover; 

• The members should have sufficient knowledge and experience in dealing with the product for a minimum period of 3 years. 

• The cooperative/FPO should have sufficient internal resources or sanction from the State Government to meet 10% of the project cost and margin money for working capital;

Self Help Groups (SHGs)

A number of SHGs are undertaking food processing activities. The Scheme proposes to provide following support to SHGs:- 

• Seed capital

• Seed capital @ Rs40,000/- per member of SHG for working capital and purchase of small tools would be provided under the scheme; 

• Priority would be given for SHGs involved in ODOP produce in giving seed capital; 

• All the members of an SHG may not be involved in the food processing. Therefore, seed capital would be provided at the federation level of SHGs; 

• This would be given as a grant to the SHG federation by SNA/ SRLM. SHG federation would provide this amount as a loan to the members of SHGs to be repaid to the SHG.

• Support to individual SHG members as a single unit of the food processing industry with credit linked grant @35% with maximum amount being Rs 10 lakh. 

• Support for capital investment at federation of SHG level, with credit linked grant @35%. Maximum limit of grant in such cases would be as prescribed. 

• Training & Handholding Support to SHGs: For support to SHGs, a large number of trained resource persons are available with State Rural Livelihood Missions (SRLMs). These local resource persons of SRLM having expertise in agro-produce would be utilized for training, upgradation of units, DPR preparation, handholding support, etc.

Eligibility Criteria for Seed Capital for SHGs (Self Help Groups)

Following are the eligibility criteria for seed capital for SHGs

• Only SHG members that are presently engaged in food processing would be eligible; 

• The SHG member has to commit to utilize this amount for working capital and purchase of small tools and give a commitment in this regard to the SHG and SHG federation; 

• Before providing the seed capital, SHG Federation should collect the following basic details for each of the members: 

• Details of the product being processed; 

• Other activities undertaken; 

• Annual turnover; 

• Source of raw materials and marketing of produce.

Eligibility Criteria for Credit Linked Grant for Capital Investment for SHG

Following are the eligibility criteria for credit linking frant for capital investment for SHG

• The SHGs should have sufficient own funds for meeting 10% of the project cost and 20% margin money for working capital or sanction of the same as grant from the State Government; 

• The SHG members should have for a minimum period of 3 years’ experience in processing of the ODOP product.

Support for Common Infrastructure

Support for common infrastructure would be provided to FPOs, SHGs, cooperatives, any Government agency or private enterprises. Common infrastructure created under the scheme should also be available for other units and the public to utilize on a hiring basis for a substantial part of the capacity. Eligibility of a project under this category would be decided based on benefit to farmers and industry at large, viability gap, absence of private investment, criticality to value chain, etc. Credit linked grant would be available @ 35%. Maximum limit of grant in such cases would be as prescribed. 

Types of Common Infrastructure to be Funded under PMFME

The following common infrastructure would be funded under the Scheme: 

• Premises for assaying of agriculture produce, sorting, grading, warehouse and cold storage at the farm-gate; 

• Common processing facility for processing of ODOP produce; 

• Incubation Centre should involve one or more product lines, which could be utilized by smaller units on a hire basis for processing of their produce. The Incubation Centre may partly be used for training purposes. It should be run on a commercial basis.

Branding and Marketing Support

Marketing and branding support would be provided to groups of FPOs/SHGs/ Cooperatives or an SPV of micro food processing enterprises under the Scheme. Following the ODOP approach, marketing & branding support would only be provided for such products at the State or regional level.

Eligible items for Branding and Marketing Support

Following are the eligible items for branding and marketing support.

• Training relating to marketing to be fully funded under the scheme; 

• Developing a common brand and packaging including standardization to participate in common packaging; 

• Marketing tie up with national and regional retail chains and state level institutions;

• Quality control to ensure product quality meets required standards

Eligibility Criteria for Branding and Marketing Support

The proposals should fulfill the following conditions:- 

• The proposal should relate to ODOP; 

• Minimum turnover of product to be eligible for assistance should be Rs 5 crore; 

• The final product should be the one to be sold to the consumer in retail pack; 

• Applicant should be an FPO/SHG/cooperative/ regional - State levels SPV to bring large number of producers together; 

• Product and producers should be scalable to larger levels; 

• Management and entrepreneurship capability of promoting entity should be established in the proposal.

References

While crafting this guide, we have consulted reliable and authoritative sources, including official government directives, user manuals, and pertinent content sourced from government websites.

• PMFME

• PMFME Guidelines