PMFME – Prime Minister’s Formalisation of Micro Food Processing Enterprises Scheme

The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme is a Centrally Sponsored Scheme launched by the Ministry of Food Processing Industries (MoFPI), Government of India, as part of the Aatmanirbhar Bharat Abhiyan. Operational for a period of five years (2020-21 to 2024-25) with a total outlay of ₹10,000 Crore, the scheme aims to enhance the competitiveness and formalize the unorganized micro food processing sector in the country.

This sector comprises a vast number of unorganized units, facing challenges such as lack of access to credit, modern technology, packaging, branding, and compliance with food safety standards. The PMFME scheme is designed as a comprehensive solution to address these issues.

Key Objectives of PMFME:

• Formalization: To bring the existing unorganized micro food processing units into the formal framework.

   

• Increased Access to Credit: Facilitate credit access for existing and new micro food processing entrepreneurs, Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), and Producer Cooperatives.

   

• Technology Upgradation: Support the upgradation of individual micro-enterprises through credit-linked subsidies for modern machinery, improved packaging, and better storage facilities.

   

• Integration with Supply Chains: Strengthen backward and forward linkages to integrate micro-enterprises with the organized food supply chain.

   

• Branding & Marketing Support: Provide financial assistance for branding and marketing to help micro food processing enterprises promote their products.

   

• Capacity Building: Enhance the capabilities of entrepreneurs through skill training, technical knowledge transfer, and entrepreneurial development programs.

   

• Common Infrastructure Development: Support the creation of common infrastructure facilities like common processing facilities, laboratories, cold storage, warehouses, and incubation centers for shared use.

   

• Focus on 'One District One Product' (ODOP): Promote specialization and scale by adopting the ODOP approach, where specific products are identified for promotion and support in each district.

Key Features & Components:

1. Credit-Linked Capital Subsidy for Individual Units:

   • 35% of the eligible project cost with a maximum ceiling of ₹10 Lakh per unit.

      

   • Beneficiary contribution should be a minimum of 10% of the project cost, with the balance being a bank loan.

      

   • Eligible project costs include the cost of plant & machinery and technical civil works (excluding land cost).

      

   • Applicable for existing units for expansion/upgradation and for new units (preferably for ODOP products).

      

2. Seed Capital for Self Help Groups (SHGs):

   • ₹40,000 per SHG member for working capital and purchase of small tools.

      

   • This is provided as a grant to the SHG Federation, which then disburses it as a loan to eligible SHG members engaged in food processing activities.

      

3. Support for FPOs, SHGs, and Producer Cooperatives (Group Category):

   • Credit-linked grant of 35% for capital investment, typically for common infrastructure development (e.g., incubation centers, cold storage, common processing lines).

      

   • Maximum limit for common infrastructure is ₹3 Crore of the eligible project cost.

      

   • These groups also receive support for training, handholding, and technical assistance.

      

4. Branding & Marketing Support:

   • 50% financial grant for branding and marketing expenses to FPOs, Cooperatives, SHGs, or a Special Purpose Vehicle (SPV) of micro food processing enterprises.

      

   • This component aims to help promote their existing or proposed brands, especially those aligned with the ODOP.

      

5. Capacity Building & Research:

   • Provides training on food processing entrepreneurship and development programs for beneficiaries.

      

   • Supports research activities in the food processing sector.

      

6. One District One Product (ODOP) Approach:

   • The scheme identifies specific food products unique to each district based on raw material availability and existing clusters.

      

   • Support for common infrastructure, branding, and marketing is preferably given to units producing the ODOP. However, other existing units can also be supported.

Eligibility Criteria (Simplified):

• Individual Micro Enterprises: Existing individual micro food processing units (unincorporated and employing fewer than 10 workers) that are willing to formalize and contribute 10% of the project cost. New units are also eligible, preferably for ODOP products. Applicants must be 18+ and have at least an 8th standard pass. Only one person per family is eligible.

   
   
   

• Self Help Groups (SHGs): Members of SHGs engaged in food processing activities. Seed capital is provided to the SHG Federation.

   
   

• FPOs/Producer Cooperatives: Should be engaged in food processing activities and meet specific financial and operational criteria (e.g., minimum turnover, experience).

   

• Common Infrastructure: Support for groups (FPOs, SHGs, Cooperatives, Government Agencies) establishing common infrastructure.

   

Application Process:

1. Preparation: Develop a detailed project report (DPR) aligned with the scheme's guidelines and ODOP for your district.

    

2. Contact Resource Persons (DRP): District Resource Persons (DRPs), appointed by the State Nodal Agency, provide handholding support to beneficiaries, including DPR preparation and assistance with bank loan applications.

3. Bank Loan Application: Approach a bank for a term loan for the project.

4. Online Application: Applications are generally submitted through the PMFME Portal (pmfme.mofpi.gov.in).

    

5. Evaluation & Sanction: Applications are evaluated by a District Level Committee and subsequently by the bank. Once the loan is sanctioned, the subsidy is released to the bank.

    

The PMFME Scheme is a comprehensive initiative that not only provides financial assistance but also integrates technical, marketing, and formalization support, empowering micro food processing entrepreneurs to grow, become more competitive, and contribute significantly to India's food economy