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Minister launches the 'PM Formalization of Micro Food Processing Enterprises Scheme'

Published: Jun 29, 2020

By TIOLCORPLAWS News Service

NEW DELHI, JUNE 29, 2020: Minister for Food Processing Industries Harsimrat Kaur Badal, launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme on today as a part of “Atmanirbhar Bharat Abhiyan”. Union Minister said that the Scheme would generate 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 guidelines of the Scheme were released on the occasion.

Highlighting the role of local food processing units, Union Minister said that food products manufactured by the rural entrepreneurs in the villages have a long tradition of supplying Indian food products to the local population. The importance of these local units and their role has been amply emphasised by the Hon'ble Prime Minister in his Address to the Nation on 12.5.2020. 

“In times of crisis, this Local has fulfilled our demand, this Local has saved us. Local is not just the need, it is our responsibility also. Time has taught us that we must make the Local as a mantra of our life. The Global Brands you feel today were sometimes also very local like this. But when people started using them, started promoting them, branding them, proud of them, they became Global from Local Products. Therefore, from today every Indian has to become vocal for their local, not only to buy local products, but also to promote them proudly. I am confident that our country can do this.”

Speaking about the challenges faced by food processing sector, Ms. Badal said that the unorganised food processing sector faces a number of challenges which limit their performance and their 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 shared that owing to these challenges, the unorganised food processing sector contributes much less in terms of value addition and output despite its huge potential .

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

Details of the PM FME scheme

With a view to providing financial, technical and business support for upgradation of existing micro food processing enterprises, the Ministry of Food Processing Industries (MoFPI) has launched an all India “Centrally Sponsored PM Formalisation of Micro food processing Enterprises (PM FME) scheme” to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore . The expenditure under the scheme would to be shared in 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs.

The Scheme adopts One District One Product (ODODP) approach to reap 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 produce based product or cereal based products or a food product widely produced in a district and their allied sectors. Illustrative 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. However, units producing other products would also be supported. Support for common infrastructure and branding & marketing would be for ODOP products. The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.

Existing Individual micro food processing units desirous of upgradation of their unit 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 credit linked grant of 35% for capital investment along the value chain.  Support would be provided through credit linked grant @ 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 use by micro units in the cluster. Support for marketing & branding would be provided to develop brands for micro units and groups with 50% grant at State or regional level which could benefit large number of micro units in clusters.

The Scheme places special focus on capacity building and research . NIFTEM and IIFPT, two academic and research institutions under MOFPI 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 by entrepreneurs, their processing, approval of various projects by the States and MoFPI, release of grant and other funds and monitoring of the project. Individual entrepreneurs and other stake holders desirous of availing assistance under the scheme may contact the State Nodal Agencies of their respective states/ UTs regarding the roll out of scheme and contact points at the district level.

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

Operation Greens Scheme, being implemented by MoFPI has been extended from tomato, onion and potato (TOP) crops to other notified horticulture crops for providing subsidy for their transportation and storage from surplus production area to major consumption centres.  The objective of intervention 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, Lichi, 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 future on the basis of recommendation by Ministry of Agriculture or State Government

Duration of Scheme: – for the period of 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.

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; and/or
  • Hiring of appropriate storage facilities for eligible crops ( for maximum period of 3 months );

Submission of claim for subsidy – Eligible entities, who comply with the aforesaid essential criteria may undertake the transportation and/or storage of notified crops from notified surplus production cluster, without any prior approval from MoFPI and thereafter submit their claim on online portal https://www.sampada-mofpi.gov.in/Login.aspx . The applicant should register on the portal before carrying out transportation/storage of fruits and vegetables.

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

Ms Harsimrat Kaur Badal, informed that MoFPI is planning to start free on-line skilling classes for SC and ST entrepreneurs, in collaboration with NIFTEM and FICSI, for providing e-learning. MoFPI has identified 41 courses and job roles like on baking, making jam, pickles, etc for which access to digital content would be made available. Once certified, these entrepreneurs would have better employment potential, or they can start their own venture. She further 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 on android based app on mobiles.

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