PM FME Scheme

Introduction

The PM Formalization of Micro Food Processing Enterprises (PM FME) Scheme, launched in June 2020, is a flagship initiative under the Atmanirbhar Bharat Abhiyan. It is a centrally sponsored scheme by the Ministry of Food Processing Industries (MoFPI) that aims to enhance the competitiveness, capacity building, and formalization of the unorganized micro food processing sector in India.

With a financial outlay of ₹10,000 crore over five years (2020-25), the scheme promotes One District One Product (ODOP) approach, credit-linked subsidies, and skill upgradation for individual micro-enterprises and SHGs/FPOs.

Objectives of the PM FME Scheme

1. Formalize the informal food processing sector.
2. Enhance access to credit and subsidies.
3. Improve market access and branding.
4. Strengthen backward and forward linkages.
5. Empower women and SC/ST entrepreneurs.
6. Promote ODOP-based cluster development.

Key Features of the PM FME Scheme

Feature	Description
Tenure	2020–2025
Financial Outlay	₹10,000 crore (₹5,000 crore from Centre, ₹5,000 crore from States)
Coverage	All 35 States and UTs
Approach	One District One Product (ODOP)
Implementation Model	Decentralized at State/UT level

Target Beneficiaries

• Individual micro food processing units (unorganized).
• Farmer Producer Organizations (FPOs).
• Self Help Groups (SHGs).
• Cooperatives.

Note: Over 66% of units in the unorganized food processing sector are family-run, and 80% of these are micro-enterprises.

Components of the PM FME Scheme

1. Support to Individual Micro Enterprises

• Credit-linked capital subsidy of 35% (max ₹10 lakh) on project cost.
• Beneficiary contribution: 10%, bank loan: 55%.

2. Group-Based Support

• Support to FPOs/SHGs/Cooperatives for:
  • Common infrastructure (warehousing, processing units).
  • Branding and marketing.
  • Training and handholding.

3. Capacity Building

• Entrepreneurship Development Programs (EDPs).
• Technical know-how and quality certification training.

4. Support for Common Infrastructure

• Grants up to 35% for setting up shared processing facilities.
• Cold chains, warehouses, logistics, testing labs.

5. Branding and Marketing Support

• For ODOP-based products: packaging, labelling, barcoding, digital marketing.

Alignment with Sustainable Development Goals (SDGs)

The PM FME Scheme aligns with various UN Sustainable Development Goals:

SDG Goal	Alignment
Goal 1: No Poverty	Rural employment generation and income security
Goal 2: Zero Hunger	Reduction in post-harvest losses, food availability
Goal 5: Gender Equality	Prioritizing SHGs and women entrepreneurs
Goal 8: Decent Work and Economic Growth	Skill development and formalization
Goal 9: Industry, Innovation and Infrastructure	Upgradation of micro food units and infrastructure
Goal 12: Responsible Consumption and Production	Efficient use of raw food materials and value addition

One District One Product (ODOP) Framework

• Promotes a district-specific niche product.
• Aligns with ‘Vocal for Local’ movement.
• Examples:
  • Mango pulp in Krishnagiri (TN)
  • Pickles in Guntur (AP)
  • Bamboo shoots in Assam
  • Jackfruit in Kerala

Progress So Far (as of 2025)

Metric	Achievement
Units assisted	Over 75,000 individual enterprises
SHG/FPO support	1,200+ collectives
ODOPs identified	710+ districts
Training sessions	2,000+ EDPs
Common infrastructure	200+ projects sanctioned

Financial Assistance and Subsidy Flow

Stakeholder	Contribution
Beneficiary	10% (minimum)
Bank Loan	55%
Subsidy (Govt.)	35% (shared 60:40 between Centre:State)

Benefits of the PM FME Scheme

For Enterprises

• Access to formal credit and subsidies.
• Better machinery and hygiene standards.
• Improved packaging and branding.

For the Economy

• Enhanced value addition in agri-produce.
• Employment generation in rural areas.
• Growth of rural entrepreneurship.

For Consumers

• Better quality and safety of processed foods.
• Promotion of local and traditional foods.

Eligibility Criteria

Beneficiary Type	Eligibility
Individuals	Must own a micro food processing unit, preferably ODOP-based
SHGs/FPOs/Cooperatives	Engaged in food processing, ODOP alignment preferred
Others	Women, SC/ST, OBC, and minority entrepreneurs are encouraged

Implementation Structure

Level	Entity
Central	Ministry of Food Processing Industries (MoFPI)
State	State Nodal Departments/Agencies
District	District Resource Persons (DRPs), Local institutions
Support	National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) and Indian Institute of Food Processing Technology (IIFPT)

Digital Initiatives

• MIS Portal for application tracking and progress monitoring.
• Udyam Portal linkage for micro-enterprise registration.
• Online training and capacity building modules.

India vs. Other Nations

Country	Approach to MSME Food Processing	Comparison with PM FME
Thailand	SME-focused agri-food clusters, export-oriented	Similar ODOP strategy
Philippines	Local value addition + tech upgradation	More advanced in co-op use
Vietnam	Government-backed rural micro-units for rice, seafood	Similar support structure, less formalization
India	Credit + capacity + ODOP + branding	Holistic & large-scale integration through PM FME

Synergy with Other Government Schemes

The PM FME Scheme complements several other initiatives aimed at agricultural and rural development:

Scheme	Synergy with PM FME
Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)	Infrastructure development and cold chain creation
Agriculture Infrastructure Fund (AIF)	Shared credit facilities for common processing infrastructure
National Rural Livelihoods Mission (NRLM)	Support for SHGs and rural women-led micro-enterprises
Pradhan Mantri Mudra Yojana (PMMY)	Micro-credit assistance to budding food processors
Startup India	Entrepreneurship support for innovative food startups
Make in India	Boosting indigenous processing and packaging technologies

Challenges

Challenge	Explanation
Credit access	High NPAs and reluctance from banks
Low awareness	Especially in remote districts
Supply chain bottlenecks	Lack of cold chains and storage
Certification and compliance	Difficult for small units

Way Forward

• Strengthening district-level convergence with other schemes (e.g., SFURTI, AIF).
• Promoting digital marketing tools for rural entrepreneurs.
• Creating ODOP e-commerce platforms.
• Improving FSSAI registration compliance.
• Encouraging PPP models for common infrastructure.

Conclusion

The PM FME Scheme is a transformative step toward building a self-reliant India by formalizing the unorganized micro food processing sector. By providing credit, infrastructure, branding support, and training, the scheme is empowering thousands of micro-entrepreneurs, especially in rural India. It stands as a model of inclusive growth, rural industrialization, and sustainable value chain development.