Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

About Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

• It is a centrally sponsored scheme launched by the Ministry of Food Processing Industries(MOFPI).
• Nodal Ministry: It was launched in 2020 as part of the Aatmanirbhar Bharat Abhiyan.
• Budget outlay: It has a budget outlay of Rs. 10,000 crore.
• Duration: It has been approved for implementation from 2020-21 to 2024-25 and has been extended till September 2026.
• Aim: It aims to
  • Modernize and enhance the competitiveness of the existing individual micro enterprises and ensure their transition to formal sector.
  • Provide support to Farmer Producer Organizations, Self Help Groups, and Producers Cooperatives along their entire value chain. 
• Funding Pattern: The expenditure under the PM-FME scheme would 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.
• Key Components of PMFME Scheme
  • Credit-Linked Subsidy for Individual Micro Food Processing Enterprises: A 35% subsidy (up to ₹10 lakh) is provided to individuals for setting up or upgrading micro food processing units.
  • Credit-Linked Subsidy for Common Infrastructure: Farmer Producer Organisations (FPOs), Farmer Producer Companies (FPCs), Self Help Groups (SHGs), and similar entities are eligible for a 35% credit-linked subsidy (up to ₹3 crore) to establish or upgrade common infrastructure facilities.
  • Seed Capital Assistance: Financial support of ₹40,000 per SHG member engaged in food processing is available for working capital requirements and the purchase of small tools and equipment.
  • Capacity Building: Structured training programs are offered, including Entrepreneurship Development Programme (EDP) training for both individual and group applicants and specialised training for SHG members receiving seed capital assistance.
  • Incubation Centres: Support is provided for establishing and strengthening Common Incubation Centres that serve as local hubs for food processing, training, testing, and entrepreneurship development.
  • Branding & Marketing Support: A 50% financial grant is available for branding and marketing initiatives for groups such as FPOs, SHGs, cooperatives, regional/state-level SPVs, and state agencies.
    • Assistance also includes trademark registration, product standardisation, packaging development, e-commerce integration, and trade promotion for ODOP brands.
  • Handholding Support: Dedicated resource persons at the state and district levels assist applicants throughout the formalisation process.
• One District One Product (ODOP): The scheme follows the One District One Product (ODOP) approach to scale up procurement, services, and marketing.
  • States identify products, with priority on perishables such as fruits, vegetables, spices, fisheries, and traditional foods like honey and turmeric.
  • Support is focused on processing, storage, branding, and reducing wastage.
  • Capital investment is prioritised for ODOP units, and new enterprises are eligible only for ODOP products.
• Coverage: Under the scheme, 2,00,000 micro food processing units will be directly assisted with credit-linked subsidies.
  • Adequate supportive common infrastructure and institutional architecture will be supported to accelerate the growth of the sector.
• Benefits: The program has four broad components addressing the needs of the sector:
  • Support to individuals and groups of micro-enterprises.
  • Branding and Marketing support.
  • Support for strengthening institutions.
  • Setting up a robust project management framework.