The unorganized food processing sector in the country comprises nearly 25 lakh food processing enterprises which are unregistered and informal. With only 7% of investment in plant & machinery and 3% of outstanding credit, the unorganized enterprises contribute to 74% of employment (a third of which are women), 12% of output and 27% of the value addition in the food processing sector.
Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises. Most of these units fall under category of micro manufacturing units in terms of their investment in plant & machinery and turnover. The unorganized food processing industry in India faces challenges that limits its development and weakens performance:
a. Lack of productivity and innovation due to limited skills and access to modern technology and machinery for production and packaging
b. Deficient quality and food safety control systems, including lack of basic awareness on good hygienic and manufacturing practices.
c. Lack of branding & marketing skills and inability to integrate with the supply chains, etc.
d. Capital deficiency and low bank credit.
Taking cognizance of the contribution and the challenges that impede the unorganized sector of the Food Processing Industry, the Ministry of Food Processing Industries (MoFPI) has implemented “PM Formalization of Micro food processing Enterprises Scheme (PM FME Scheme)”.
The scheme envisages an outlay of Rs.10,000 crore over a period of five years from 2020-21 to 2024-25. Scheme adopts One District One Product (ODOP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
Under the scheme, 2,00,000 micro food processing units will be directly assisted with credit linked subsidy. Adequate supportive common infrastructure and institutional architecture will be supported to accelerate growth of the sector. As the scheme focuses on micro enterprises in unorganized segment of food processing industry and promote formalization of the sector, modalities for implementation of the scheme will be depending upon the activity.
The applications of individual beneficiaries are available online on the URL:
https://pmfme.mofpi.gov.in /pmfme/#/Login.
The above mentioned scheme is launched for group beneficiaries (SHGs, FPOs, Cooperatives, and Common infrastructure). After the scrutiny of loan proposal by the competent authority in the respective states, the same will be forwarded to the lending institutions.