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MOFPI launches PM Formalization of Micro Food Processing Enterprises scheme as a part of “Atmanirbhar Bharat Abhiyan”.

Minister for Food Processing Industries Smt. Harsimrat Kaur Badal launched the PM Formalization of Micro Food Processing Enterprises scheme(PM FME) on 29th June 2020 as a part of “Atmanirbhar Bharat Abhiyan”. Union Minister said that the Scheme would generate a total investment of Rs 35,000 crore and generate 9 lakh skilled and semi-skilled employment. The scheme will benefit 8 lakh units through access to information, training, better exposure, and formalization.

Smt. Badal said that the unorganized food processing sector faces several challenges that limit their performance and growth. She added that these challenges include lack of access to modern technology & equipment, training, access institutional credit, lack of basic awareness on quality control of products, and lack of branding & marketing skills, etc. She said that due to these challenges, the unorganized food processing sector contributes much less in terms of value addition and output despite its huge potential.

Smt. Badal said that the unorganized food processing sector comprising nearly 25 lakh units which contribute 74% of employment in the food processing sector. Nearly 66% of these units are located in rural areas. About 80% of them are family-based enterprises supporting livelihood rural households and minimizing their migration to urban areas. These units largely fall within the category of micro-enterprises.

Details of the PM FME scheme

The Ministry of Food Processing Industries (MOFPI) has launched an all India centrally sponsored “PM Formalization of Micro food processing Enterprises scheme”. It is to be implemented over five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore. This will provide financial, technical, and business support for the up-gradation of existing micro food processing enterprises. The expenditure under the scheme would be shared in 60:40 ratio between Central and State Governments. Additionally, 90:10 ratio with North Eastern and the Himalayan States, 60:40 ratio with UTs with the legislature, and 100% by Centre for other UTs.

The Scheme adopts One District One Product (ODODP) approach to gain benefits in terms of procurement of inputs, availing common services and marketing of products. The ODOP product could be a perishable produce based product or cereal-based products or a food product widely produced in a district and their allied sectors. A list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet-based products, fisheries, poultry, meat as well as animal feed among others. Preference would be given to those producing ODOP products. Support for common infrastructure, branding & marketing would be given for ODOP products.  However, units producing other products would also be supported. The Scheme also focuses on waste to wealth products, minor forest products, and Aspirational Districts.

Existing Individual micro food processing units can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit. Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools. FPOs/ SHGs/ producer cooperatives would be provided with a credit-linked grant of 35% for capital investment along the value chain. Support would be provided for the development of common infrastructure. It includes common processing facility, lab, warehouse, cold storage, packaging, and incubation centre through FPOs/SHGs/cooperatives or state-owned agencies or private enterprise for use of micro-units in the cluster. Support for marketing & branding would be provided to develop brands for micro-units with a 50% grant at the State or regional level.

The Scheme especially focuses on capacity building and research. NIFTEM and IIFPT, two academic and research institutions along with State Level Technical Institutions selected by the States would be provided support for training of units, product development, appropriate packaging and machinery for micro-units. All the processes of the Scheme would take place on an MIS including applications.

Extension of Operation Greens from TOP (Tomato-Onion-Potato) crops to all Perishable Fruits & Vegetables (TOP to Total)

Operation Greens Scheme has been extended from tomato, onion, and potato (TOP) crops to other notified horticulture crops. This is done to provide subsidies for their transportation and storage from the surplus production areas to major consumption centres. The main objective is to protect the growers of fruits and vegetables from making distress sale due to lockdown and reduce the post-harvest losses.

Eligible Crops:

Fruits– Mango, Banana, Guava, Kiwi, Litchi, Papaya, Citrus, Pineapple, Pomegranate, Jackfruit.

Vegetables: – French beans, Bitter Gourd, Brinjal, Capsicum, Carrot, Cauliflower, Chillies (Green), Okra, Onion, Potato, and Tomato.

Any other fruit/vegetable can be added in the future based on a recommendation by the Ministry of Agriculture or State Government.

Duration of Scheme: – for six months from the date of notification i.e., 11/06/2020.

Eligible entities: – Food Processors, FPO/FPC, Co-operative Societies, Individual farmers, Licensed Commission Agent, Exporters, State Marketing/Co-operative Federation, Retailers, etc. engaged in processing/ marketing of fruits and vegetables.

The pattern of Assistance: – Ministry will provide subsidy @ 50 % of the cost of the following two components, subject to the cost norms:

  • Transportation of eligible crops from surplus production cluster to consumption centre.
  • The hiring of appropriate storage facilities for eligible crops (for a maximum period of 3 months).

Submission of a claim for subsidy – Eligible entities may undertake the transportation or storage of notified crops from notified surplus production cluster, without any prior approval from MOFPI and thereafter submit their claim on the online portal The applicant should register on the portal before carrying out transportation/storage of fruits and vegetables.

Free on-line Skilling program for the SC/ST Food Processors

Smt Harsimrat Kaur Badal informed that MOFPI is planning to start free on-line skilling classes for SC and ST entrepreneurs. This is to be done in collaboration with NIFTEM and FICSI, for providing e-learning. MOFPI has identified 41 courses and job roles like baking, jam making, pickles, etc for which access to digital content would be made available. She informed that the participant handbooks and the facilitator’s guide created by the Ministry, through NIFTEM, will be converted into e-learning format with suitable digital content and online assessment service. These will be made available in English, Hindi and other regional languages by FICSI on web and android based app on mobiles.

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