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Centre Launches PM FME Scheme For Micro Food Processing Sector; Aims To Generate Jobs

Modi government launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme which will be implemented over a period of five years

PM FME scheme

With a view to providing financial, technical, and business support for up-gradation of existing micro food processing enterprises, the Modi government on Monday launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme. The scheme will be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.

Minister for Food Processing Industries, Harsimrat Kaur Badal launched PM FME and said the scheme would generate a total investment of Rs 35,000 crore and generate 9 lakh skilled and semi-skilled employment and benefit 8 lakh units through access to information, training, better exposure, and formalization.

The PM-FME scheme aims to take “local brand to global” by addressing the challenges of credit, technology and retail market access, Badal said.

"Strengthening of micro food processing units will lead to a reduction in wastage, creation of off-farm job opportunities and help in achieving the overarching government objective of doubling farmers’ income," she added.

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Details of PM FME

The expenditure under the scheme would be shared in a 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and the Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs, the government said. 

PM FME adopts One District One Product (ODODP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products. The States would identify food product for a district keeping in view the existing clusters and availability of raw material.

The ODOP product could be a perishable product, cereal-based or a food product widely produced in a district and their allied sectors. The products could be 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.

However, units producing other products would also be supported. Support for common infrastructure and branding and marketing would be for ODOP products. The scheme also focusses on waste to wealth products, minor forest products and aspirational districts, she added.

Under the scheme, the government said existing individual micro food processing units desirous of upgrading their units can avail credit-linked capital subsidy at 35 per cent of the eligible project cost with a maximum ceiling of Rs 10 lakh per unit.

A seed capital of Rs 40,000- per Self Help Group (SHG) member would be provided for working capital and purchase of small tools. Farmer producer organisations (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 through credit linked grant at 35% for development of common infrastructure including common processing facility, lab, warehouse, cold storage, packaging, and incubation center through FPOs/SHGs/cooperatives or state owned agencies or private enterprise to be used by micro units in the cluster.

Support for marketing and branding would be provided to develop brands for micro units and groups with 50% grant at a state or regional level which could benefit large numbers of micro units in clusters.

The scheme would place a special focus on capacity building and research. The training would be provided in collaboration with NIFTEM and IIFPT, two academic and research institutions under the Food Processing Ministry along with state-level technical institutions. The training would include product development, appropriate packaging and machinery for micro units, the statement added.

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