pmfme scheme

PM Formalisation of Micro food processing Enterprises (PMFME) Scheme


The scheme adopts the 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. ODOP for the scheme will provide the framework for value chain development and alignment of support infrastructure. There may be more than one cluster of ODOP products in one district. There may be a cluster of ODOP products consisting of more than one adjacent district in a State – Consultants for PM FME Scheme

The States would identify the food product for a district, keeping in perspective the focus of the scheme on perishables. A baseline study would carried out by the State Government. The ODOP product could be a perishable Agri produce, cereal-based product, or a food product widely produced in a district and their allied sectors.

An 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. Besides, certain other traditional and innovative products including waste to wealth products could supported under the Scheme. For example, honey, minor forest products in tribal areas, traditional Indian herbal edible items like turmeric, amla, haldi, etc.

Support for agricultural products would be for their processing along with efforts to reduce wastage, proper assaying, and storage and marketing. For providing support existing individual micro-units for capital investment, preference would given to those producing ODOP products.

However, existing units producing other products would also be support. In the case of capital investment by groups, predominately those involved in ODOP products would supported


1. Credit Linked Subsidy

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. The beneficiary contribution should be a minimum of 10% and the balance should be a loan from a bank.

2. Capacity Building /Training support for the micro enterprise

Training support would be provided to individual units that are being provided support for capital investment. The training support would also be provided to other existing units in the districts that are processing ODOP products.

The following are the focus areas for capacity building under the Scheme:

Entrepreneurship development, essential functions of enterprise operations, marketing, bookkeeping, registration, FSSAI standards, Udyog Aadhar, GST Registration, general hygiene, etc.;

Specific training designed for ODOP product or the product produced by the unit including operations of necessary machines, hygiene issues, packaging, storage, procurement, new product development etc.


The scheme would support clusters and groups such as FPOs/SHGs/ producer cooperatives along their entire value chain for sorting, grading, assaying, storage, common processing, packaging, marketing, processing of agri-produce, and testing laboratories.

1. FPOs and Producer Cooperatives would be provided the following support

Grant @35% with credit linkage

Training support

The maximum limit of grant in such cases would be as prescribed.

2. SHGs would be provided with the following support:

Seed capital: Seed capital @ Rs40,000/- per member of SHG for working capital and purchase of small tools would be provided under the scheme.

Support to individual SHG members as a single unit of food processing industry with credit linked grant @35% with the maximum amount being Rs 10 lakh.

Support for capital investment at the federation of SHG level, with credit linked grant @35%. The maximum limit of grant in such cases would be as prescribed.

Training & Handholding Support to SHGs: For support to SHGs, a large number of trained resource persons are available with State Rural Livelihood Missions (SRLMs). These local resource persons of SRLM having expertise in agro-produce would utiliz for training, upgradation of units, DPR preparation, handholding support, etc.


Seed capital @ Rs. 40,000/- per SHG member would be provided to those engaged in food processing for working capital and purchase of small tools. Priority would given for SHGs involved in ODOP produce in giving seed capital. Seed capital as a grant would provid to the SHG federation which, in turn, would extend to members as a loan through the SHGs. The SHG federation would provide this amount as a loan to the members of SHGs to repaid to the SHG.

Eligibility Criteria for Seed Capital for SHGs:

1. Only SHG members that are presently engage in food processing would eligible.

2. The SHG member has to commit to utilize this amount for working capital and purchase of small tools and give a commitment in this regard to the SHG and SHG federation.

3. Before providing the seed capital, SHG Federation should collect the following basic details for each of the members:

  • Details of the product processed;
  • Other activities undertaken;
  • Annual turnover;
  • Source of raw materials and marketing of produce.


would provided to FPOs, SHGs, cooperatives, any Government agency, or private enterprises. it created under the PM FME scheme should also be available for other units and the public to utilize on a hiring basis for a substantial part of the capacity. The eligibility of a project under this category would decide based on the benefit to farmers and industry at large, viability gap, absence of private investment, criticality to value chain, etc. Credit linked grant would be available @ 35%. The maximum limit of the grant in such cases would be as prescribed.

The following are the focus areas for capacity building under the scheme:

1. Premises for assaying of agriculture produce, sorting, grading, warehouse and cold storage at the farm-gate;

2.Common processing facility for processing of ODOP produce;

3. Incubation Centre should involve one or more product lines, which could utilized by smaller units on a hire basis for the processing of their produce. The Incubation Centre may partly used for training purposes. It should run on a commercial basis.

FPOs/SHGs/Cooperatives seeking funding for the common infrastructure and capital investment under the Scheme should follow the following procedures:

1. A DPR for seeking assistance under the Scheme for capital investment and common infrastructure should prepared, based on the format as prescribed.

2. The DPR should have the necessary details of the proposal, detailed project cost, proposed manpower, turnover, marketing channel, sources of raw material, estimated profit & loss account, cash flow statement, etc.

3. The DPR should sent to the State Nodal Agency (SNA). After approval of the proposal by SLAC, SNA should recommend the proposal to MoFPI. Any proposal for assistance to a group for a grant above Rs.10 lakh shouldbe sent tothe Ministry of Food Processing Industries (MoFPI) for approval.

4. After approval of the proposal by MoFPI, the proposal should forwarded to the financial institution for sanction of loan.

5. The DPR may also contain a proposal for training support to the group members based on the training hours & modules, as prescribed and the cost norms of the Ministry of Skill Development and Entrepreneurship. Components of training and capacity building would fully funded under the Scheme.

6. The assistance of Rs. 50,000/- per case would be provided to FPOs/SHGs/ Cooperatives for preparation of DPR.

7. Disbursement of the grant should take place in the bank account of the applicant organization after the sanction of the loan by the bank.


Marketing and branding support would be provided to groups of FPOs/SHGs/ Cooperatives or an SPV of micro food processing enterprises under the scheme. Following the ODOP approach, marketing & branding support would only be provided for such a product at the State or regional level.

Eligible items for support under the scheme:

1. Training relating to marketing to fully fund under the scheme;

2. Developing a common brand and packaging including standardization to participate in common packaging;

3. Marketing tie-up with national and regional retail chains and state-level institutions;

4. Quality control to ensure product quality meets the required standards.

Support for marketing and branding requires developing a common brand, common packaging, and product standardization. The appropriate level for common branding and packaging would differ from place to place, case to case, and product to product. Whether it should district, regional, or state level would decided by the concerned SNA in each case.

Therefore, the proposal for support to marketing and branding should prepared by the SNA. Support for branding and marketing would limited to 50% of the total expenditure. The maximum limit of grant in such cases would be as prescribed. No support would be provided for opening retail outlets under the scheme.

Vertical products at the national level could also be provided support for branding & marketing on the same lines as described above for ODOP focus. Such support for common branding/packaging and marketing would be provided at the national level. Proposal for that support should sent to MoFPI by the states or national level institutions or organizations or partner institutions.

Eligibility criteria:

The proposals should fulfill the following conditions: –

1. The proposal should relate to ODOP

2. The minimum turnover of product to be eligible for assistance should be Rs 5 crore

3 The final product should be the one to sold to the consumer in a retail pack

4. Applicant should be an FPO/SHG/cooperative/ regional – State levels SPV to bring a large number of producers together

5. Product and producers should be scalable to larger levels

6. Management and entrepreneurship capability of promoting entities should established in the proposal.

Procedure for applying for assistance under Branding & Marketing

Detailed Project Report preparation

1. A DPR should prepared for the proposal, comprising essential details of the project, product, strategy, quality control, aggregation of produce, common packaging, and branding, pricing strategy, promotional details, warehousing and storage, marketing channel, plans for an increase in sales, etc.

2. Support up to Rs.5 lakh would be available from SNA for preparing DPR for proposals for marketing & branding.

3. The proposal should also contain a flow chart of activities from the procurement of raw material to marketing, critical control points, ensuring quality control, plans for five years in terms of promotional activities, increasing the number of participating producers, and turnover.

There should be an agreement with a business plan, executed between the cooperatives/SHG/FPO/SPV, the lead buyer(s) if any, and the SNA, which would describe the capital and services needs of the producers and proposed improvements that would allow them to upgrade their production capacities and skills to strengthen their linkage with the market, i.e. the lead buyer(s).


Under the scheme, it is envisage to provide training to 9 lakhs individuals from micro-food processing enterprises, various groups, such as SHGs/FPOs/Cooperatives, workers of micro-food processing enterprises and other stakeholders connected with the implementation of the PMFME scheme such as government officials, project officials, etc.

The PMFME Scheme under the Capacity Building component could provide training for the following categories of persons:-

Individual micro-food processing enterprises with credit linked grant under the Scheme;

Individual existing micro-food processing enterprises that are not taking loan under the Scheme;

Workers of micro-food processing enterprises and groups, such as SHGs/FPOs/Cooperatives;

Members of SHGs/FPOs/Cooperatives that are engagein food processing activities;

Government officials and other resources person engaged in the implementation of the PMFME Scheme- Training of Orientation of the Scheme.

The Framework of training would be as following:

  1. Entrepreneurship Development Skilling (EDP+) program modified to meet the requirement of the food processing industry.
  2. Product Specific Skilling.

Three-level of training would conductunder the Scheme:

  1. Master Trainers- EDP & product specific trainers would nominated by SNA and the Training would be conducted at IIFPT & NIFTEM;
  2. District Level Trainers- Each district to have a minimum of two trainers, one for EDP+ and one for ODOP/ product specific training;
  3. Beneficiaries- Individuals entrepreneurs and Groups of existing and new entrepreneurs who are involv in food processing at micro level. Leading to their formalization, up-gradation & scaling.

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