The unorganised food processing sector in India faced a myriad of problems. This sector remains weak due to challenges like lack of productivity and innovation due to limited skills, lack of branding and marketing skills, inability to integrate with supply chains, and capital deficiency. While the food processing sector comprises over 25 Lakh units, these challenges have stunted its growth and development. To tackle these issues in a systematic way, the Indian government launched the PMFME Scheme. This article discusses the PMFME Scheme in detail, highlighting its provisions, eligibility requirements, benefits, and application process.
Understanding the PMFME Scheme
The full-form of the PMFME Scheme is Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme. It is a government-backed scheme launched by the Ministry of Food Processing Industries to support the ‘Vocal for Local’ campaign. This Scheme was introduced under the Atmanirbhar Bharat Abhiyaan in 2020 for a period of five years (2020-2021 to 2024-2025) with a total outlay of Rs. 10,000 Crores. According to the PMFME Scheme details, this expenditure is to be shared in a 60:40 ratio between the central and state governments. For North Eastern and Himalayan states the ratio is capped at 90:10.
The PMFME Scheme aims to offer financial, technical, and business assistance to various micro food processing enterprises to help them upgrade their units. It also aims to increase the number of micro enterprises operating the sector and upgrade the unorganised sector into a more formalised and organised framework with special focus on producer cooperatives, Farmer Producer Organisations (FPO), and self-help groups (SHGs).
What is ODOP Under the PMFME Scheme?
The PMFME Scheme works on the principle of One District One Product or ODOP. Under the ODOP approach, the state identifies the food products in the district. The selected food product can be perishable agricultural produce, a food product that’s widely produced in the district, or a cereal-based product. Common ODOP examples include potato, pickles, mango, animal feed, meat, tomato, and fisheries. Herbal items like turmeric and amla as well as honey and minor forest products in tribal areas also qualify for support under the PMFME Scheme. This ODOP approach allows the Scheme to tap into the benefits of scale in terms of procuring inputs, marketing products, and availing common services. The goal is to offer a framework for value chain development and support infrastructure alignment.
PMFME Scheme Subsidy
The PMFME Scheme’s subsidy benefits are listed below:
- The scheme offers 35% credit-linked capital subsidy on the eligible project cost (maximum ceiling of Rs. 10 Lakhs/unit) to eligible micro food processing units.
- The PMFME Scheme offers an initial seed capital of Rs. 40,000 to SGHs to purchase small tools and meet working capital requirements.
- Financial support for branding and marketing by covering 50% of the overall costs.
PMFME Scheme Benefits
The PMFME Scheme offers the following benefits to formalise the micro food processing industry:
- Assistance in capacity building: This Scheme also focuses on helping entrepreneurs to build the capacity to scale operations through skill training, technical knowledge transfers, and various developmental programmes.
- Establish common infrastructure: The PMFME Scheme helps applicants create a food processing line with the value chain and common infrastructure components like incubation centres.
- Marketing and branding support: The PMFME Scheme offers financial assistance for branding and marketing purposes to promote the processed food product and facilitate integration with organised supply chains.
- Improve Food Processing Facilities: Through the PMFME Scheme, over 2 Lakh micro food processing units can access financial aid to improve their food processing facilities with better equipment and upgrades.
PMFME Scheme Eligibility Criteria
All existing and new micro food processing enterprises, farmer producer organisations, self-help groups, and producer cooperatives are eligible to apply for the PMFME Scheme. However, the eligibility criteria for the PMFME Scheme varies depending on the type of assistance required. Let’s understand the PMFME Scheme eligibility requirements for each category in detail:
Eligibility Criteria for Common Infrastructure Development
- All cooperatives, SGHs, and FPOs should be engaged in the processing of the selected ODOP produce for at least 3 years.
- These entities must also have a minimum turnover of Rs. 1 Crore.
- The cost of the proposed project should not be more than the present turnover.
- The covered entities must have internal resources to meet at least 10% of the project cost and funds for working capital.
Eligibility Criteria for Branding and Marketing
- The branding and marketing proposal submitted should be related to the ODOP product.
- The minimum turnover of the product should be at least Rs. 5 Crores.
- The final product should be sold in a retail pack to the customer.
- Both products and producers should be scalable to larger levels.
- The proposal should establish the management and entrepreneurship capabilities of the entity.
Eligibility Criteria for Support for Food Processing Units
- Partnership firms or individuals with ownership rights in the enterprise can apply for the PMFME Scheme.
- The applicant must be above 18 years of age and possess qualification for at least the eighth standard.
- Existing micro food processing units in operations qualify for the PMFME support.
- The unit must be verified by the resource person.
- Only one person per family can apply for financial assistance under the PMFME Scheme.
Eligibility Criteria for Seed Capital for Self-Help Groups
- Seed capital is available to only those SGH members who are currently engaged in food processing.
- The eligible members have to make a commitment to the SGH Federation about using the funds as working capital and for the purchase of small tools.
- The SGH Federation also has to take down details about the annual turnover,sources of materials, and marketing of produce.
Application Process for the PMFME Scheme
If you fit the eligibility criteria for the PMFME Scheme, you can apply online. Here’s a step-by-step guide on how to apply for the PMFME Scheme online:
- Visit the official PMFME website at www.pmfme.mofpi.gov.in/
- Click on the Login option listed on the upper right side of the page.
- From the drop-down menu, select ‘Applicant Registration (New User)’.
- Input the necessary details like your name, mobile number, type of beneficiary, address, state, and district on the application form and click ‘Register’.
- Next, log into the PMFME website using the ‘Applicant Login’ option.
- Enter your credentials – user ID and password and then click submit.
- Choose the ‘Apply Online’ option from the dashboard.
- Fill up the appropriate PMFME application form with the relevant details sought and click the ‘Submit’ button.
