The Prime Minister Formalization of Micro Food Processing Enterprises (PMFME) Scheme, launched in 2020 under the Atmanirbhar Bharat Abhiyan, is a transformative initiative aimed at enhancing and formalizing micro food processing enterprises (MFPs) across India. With an outlay of ₹10,000 crore, the scheme is set to operate over five years (2020-21 to 2024-25) and seeks to uplift nearly 2 lakh micro food processing units by offering financial, technical, and business support to the sector. The scheme adopts the One District One Product (ODOP) approach, emphasizing the promotion and specialization of locally produced goods.

This guide provides detailed insights into the objectives, benefits, eligibility criteria, and application process for the PMFME Scheme, helping micro food processing units understand how they can leverage this opportunity for growth and formalization.

Key Objectives of PMFME Scheme

The PMFME scheme is designed to address several critical issues faced by the micro food processing sector in India. Its key objectives include:

1. Formalization of Micro Food Processing Units:
   • One of the core goals of PMFME is to transition the unorganized micro food processing units into the formal sector. This move will improve access to finance, technical assistance, and market linkages.
2. Enhancing Competitiveness and Value Addition:
   • The scheme aims to enhance the competitiveness of existing micro food processing enterprises through infrastructure improvements, product quality upgrades, and the adoption of better packaging and marketing practices.
3. Adoption of One District One Product (ODOP) Approach:
   • A unique feature of the PMFME Scheme is the ODOP approach, which promotes a product associated with each district in India. This helps local units specialize in producing and marketing a specific product, leveraging the unique resources of that region.
4. Providing Financial and Technical Support to SHGs and FPOs:
   • Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), and cooperatives are given special attention under PMFME. The scheme encourages group enterprises to upgrade their processes and take advantage of available subsidies.
5. Encouraging Food Safety and Standards Compliance:
   • A key aspect of the scheme is to help micro-enterprises meet food safety and quality standards, making their products more competitive both in domestic and international markets.

Key Features of the PMFME Scheme

1. Credit-Linked Capital Subsidy:
   • The PMFME scheme provides a 35% subsidy on eligible project costs for individual micro-enterprises seeking upgradation. The maximum subsidy per unit is ₹10 lakh.
   • Entrepreneurs are required to contribute a minimum of 10% of the project cost from their own funds, with the remaining amount covered by loans from financial institutions.
2. Support for SHGs and FPOs:
   • Seed Capital: SHG members engaged in food processing activities can receive up to ₹40,000 per member as seed capital for working capital needs or to purchase small tools.
   • Capital Investment: FPOs, SHGs, and cooperatives can avail capital investment grants of up to 35% of the project cost for establishing common processing facilities or expanding existing ones.
3. Marketing and Branding Assistance:
   • The PMFME scheme provides assistance for branding and marketing initiatives, especially for ODOP products. This includes the development of common branding strategies, better packaging, and participation in marketing campaigns.
   • Support is also provided for e-commerce and establishing market linkages to connect micro-entrepreneurs with broader markets.
4. Capacity Building and Training:
   • Training programs are organized to upskill workers and entrepreneurs involved in micro food processing. These include programs focused on food safety standards, packaging, marketing, and financial management.
   • The National Institute of Food Technology, Entrepreneurship, and Management (NIFTEM) and the Indian Institute of Food Processing Technology (IIFPT) play a central role in providing capacity-building support.
5. Common Infrastructure Support:
   • The scheme encourages the development of common infrastructure, such as cold storage, laboratories, incubation centers, and processing facilities, which can be used by multiple micro-enterprises. This shared infrastructure reduces the overall cost for individual units and improves efficiency.

Eligibility Criteria for PMFME Scheme

1. Individual Enterprises:

• Existing Micro Food Processing Units: The scheme is open to existing unorganized food processing units seeking to upgrade their operations. These units must be involved in processing activities such as fruits, vegetables, milk, meat, poultry, fish, grains, spices, or any other locally produced food products.
• New Entrepreneurs: Individuals looking to set up new food processing units are also eligible for the scheme, provided they meet the required project funding and other criteria.

2. SHGs, FPOs, and Cooperatives:

• Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), and cooperatives involved in micro food processing are eligible for capital investment assistance to establish or expand food processing operations.

Application Process for PMFME Scheme

The application process for the PMFME Scheme is streamlined and accessible through an online platform.

1. Online Application Submission:
   • Applicants, whether individuals or group enterprises (FPOs, SHGs, cooperatives), can apply through the official PMFME portal: PMFME e-portal.
   • The application form requires details about the business, project plan, ODOP product (if applicable), and financial requirements.
2. Required Documents:
   • Business Plan: A detailed project report (DPR) outlining the planned upgradation or new venture.
   • KYC Documents: Aadhaar card, PAN card, and other relevant identity proofs.
   • Proof of Ownership or Rent Agreement: For the processing unit premises.
   • Bank Loan Sanction Letter: In cases where financial support is being sought.
3. Loan and Subsidy Sanction:
   • Upon submission and verification, the project is reviewed by the District Level Committee (DLC) for approval.
   • Once approved, the subsidy amount is credited to the loan account linked to the project.

Recent Developments in the PMFME Scheme

1. Focus on ODOP and Regional Specialties:
   • As of 2023, the PMFME scheme has made significant strides in promoting ODOP products, with many states actively participating in the program. Regional specialties such as Bihar’s Makhana, Uttar Pradesh’s mango products, and Kerala’s spices have been marketed through the scheme.
   • In partnership with organizations like NAFED, several ODOP products are being branded and sold in markets, both locally and internationally.
2. Expansion to Rural and Remote Areas:
   • The scheme has placed special emphasis on expanding to rural and remote areas where food processing enterprises operate informally. Through better access to credit and infrastructure, these units are transitioning to the formal sector.
3. Collaboration with E-Commerce Platforms:
   • The scheme has also collaborated with e-commerce platforms like Amazon, Flipkart, and others to promote micro-enterprise products, enabling them to reach larger consumer bases across India.

Impact of PMFME Scheme

The PMFME scheme has already made a significant impact on the food processing sector, particularly in rural and semi-urban regions. Some key areas of impact include:

• Formalization of the Unorganized Sector: The scheme is helping thousands of informal micro food processing units become part of the formal economy, allowing them to access finance, markets, and government benefits.
• Employment Generation: With a focus on local food products, the scheme is creating employment opportunities in processing, packaging, branding, and marketing, especially for women and marginalized communities.
• Economic Growth in Rural Areas: By encouraging micro-entrepreneurs to specialize in regional food products, the scheme contributes to economic growth and income generation in rural districts.

Challenges and Recommendations

Challenges:

1. Awareness and Outreach: Despite its benefits, awareness about the PMFME scheme remains limited in some regions, particularly in remote and underserved areas.
2. Access to Credit: While the scheme offers subsidies, accessing credit can still be challenging for some micro-enterprises due to stringent banking regulations or lack of documentation.

Recommendations:

1. Improve Awareness Campaigns: Increased efforts are needed to educate micro-entrepreneurs about the scheme through workshops, seminars, and collaborations with local authorities.
2. Simplify Loan Application Processes: Streamlining loan approval processes and offering easier access to credit through financial literacy programs could improve the participation of micro-enterprises.

Conclusion

The PMFME scheme is a groundbreaking initiative that aims to transform India’s micro food processing sector by formalizing unorganized units and promoting value addition and branding through the ODOP approach. With the potential to reach over 2 lakh micro-enterprises, the scheme is not only promoting entrepreneurship but also enhancing the economic landscape of rural and semi-urban areas. For businesses in the food processing sector, the PMFME scheme offers an unparalleled opportunity for growth, modernization, and market access.

For more information and to apply, visit the official PMFME portal.