Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME)
Background & Objective – Why this Scheme?
The Indian food processing sector is dominated by micro enterprises—small-scale units run mostly by individuals or small groups.
However, these Micro Food Processing Enterprises (MFPEs) face numerous challenges:
- Lack of formal recognition
- Limited access to credit and technology
- Poor infrastructure
- Inadequate branding and market reach
Objective:
To upgrade these existing micro units by offering them financial, technical, and business support, so that they become more competitive and sustainable.
This aligns with the government’s larger vision of Atmanirbhar Bharat (Self-Reliant India), focusing on formalisation and growth of rural and urban livelihoods through value addition in food processing.
Basic Features – What is this Scheme?
| Feature | Details |
| Type | Centrally Sponsored Scheme |
| Tenure | 5 years (2020–21 to 2024–25) |
| Nodal Ministry | Ministry of Food Processing Industries (MoFPI) |
| Nodal Bank | Union Bank of India |
| Target Units | 2,00,000 micro food processing units |
Target Beneficiaries – Who Gets the Benefit?
This scheme is not for large corporations or new start-ups, but for those already working in the food processing sector at the grassroots:
- Existing Micro Food Processing Enterprises (individuals or groups)
- Self-Help Groups (SHGs)
- Farmer Producer Organizations (FPOs)
- Producer Cooperatives
Special focus is also on urban SHG members (especially through seed capital support).
Nature of Support – What Help is Offered?
The support is multi-dimensional and divided into key components:
(a) Seed Capital Support
- ₹40,000 per SHG member
- Especially for working capital, purchase of tools, or petty machinery
- Implemented through DAY-NULM portal, in collaboration with Ministry of Housing & Urban Affairs
(b) Credit-linked Subsidy for Capital Investment
- Subsidy of up to 35% of eligible project cost
- Maximum limit: ₹10 lakh per unit
- Must be credit-linked → i.e., one has to take a loan, and subsidy comes after
(c) Credit-linked Grant for Common Infrastructure
- Again, 35% grant for shared facilities like processing units, storage, packaging, etc.
(d) Support for Branding & Marketing
- 50% grant
- Applicable at State or Regional level
- Focus on collective marketing, packaging, product design
Focus Areas – Where and What is Prioritized?
The scheme adopts a cluster-based approach through:
🟢 One District One Product (ODOP)
- Each district identifies a unique food product based on local raw material and existing production
- Example: Mango in Malihabad (UP), Pineapple in Meghalaya, etc.
- Govt provides infra and branding support to develop this local strength
🟢 Geographic & Thematic Priorities
- Aspirational Districts
- Waste to Wealth products (agri-waste converted into usable products)
- Minor Forest Produce (MFPs) from tribal areas
These areas are chosen for their potential and need for support.
Capacity Building & Research
Alongside financial help, technical capacity is developed via:
- Training in hygiene, quality, food standards
- Product development and packaging
- Machinery selection, etc.
This is handled by premier institutions:
- NIFTEM (National Institute of Food Technology Entrepreneurship and Management)
- IIFPT (Indian Institute of Food Processing Technology)
- State-Level Technical Institutions
Implementation Flow (At a Glance)
| Component | Channel/Agency |
| Seed Capital for SHG | Via DAY-NULM portal (Urban focus) |
| Credit-linked Subsidy | Through banks, coordinated by Union Bank |
| Training and R&D | NIFTEM/IIFPT/State agencies |
| ODOP selection & planning | By State Governments, with support from MoFPI |