PM Formalisation of micro food processing Enterprises Scheme (PM FME Scheme)

PM FME scheme is a centrally sponsored scheme that is designed to address the challenges faced by the micro enterprises and to tap the potential of groups and cooperatives in supporting the upgradation and formalization of these enterprises. The expenditure under the scheme would to be shared in 60:40 ratios between Central and State Governments.

Aims

The scheme aims to:

• Enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector; and
• Support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.

Financial Assistance

The objectives of scheme are to build capability of microenterprises to enable:

• Increased access to credit by existing micro food processing entrepreneurs, FPOs, Self Help Groups and Co-operatives;
• Integration with organized supply chain by strengthening branding & marketing;
• Support for transition of existing 2,00,000 enterprises into formal framework;
• Increased access to common services like common processing facility, laboratories, storage, packaging, marketing and incubation services;
• Strengthening of institutions, research and training in the food processing sector; and
• Increased access for the enterprises, to professional and technical support.

Coverage:

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.

One District One Product:

The 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. 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 a district. A state may have a cluster of ODOP product consisting of more than one district. With respect to support to existing individual micro units for capital investment, preference would be given to those producing ODOP products. However, existing units producing other products would also be supported. In case of capital investment by groups, predominately those involved in ODOP products would be supported. New units, whether for individuals or groups would only be supported for ODOP products.

Support for common infrastructure and marketing & branding would only be for ODOP products. In case of support for marketing & branding at State or regional level, same products of districts not having that product as ODOP could also be included.

Programme Components:

The programme has four broad components addressing the needs of the sector:

• Support to individual and groups of micro enterprises;
• Branding and Marketing support;
• Support for strengthening of institutions;
• Setting up robust project management framework.

Support to Individual Micro Enterprises:

Individual micro food processing units would be provided credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10.0 lakh per unit. Beneficiary contribution should be minimum of 10% of the project cost with balance being loan from Bank.

1. Eligibility criteria for individual micro enterprises under the scheme:
   • Existing micro food processing units in operations
   • Existing units should be those identified in the SLUP for ODOP products or by the Resource Person on physical verification. In case of units using electrical power, electricity bill would support it being in operations. For others units, existing operations, inventory, machines and sales would form the basis
   • The enterprise should be unincorporated and should employ less than 10 workers
   • The enterprise should preferably be involved in the product identified in the ODOP of the district. Other micro enterprises could also be considered;
   • The applicant should have ownership right of the enterprise;
   • Ownership status of enterprise could be proprietary / partnership firm;
   • The applicant should be above 18 years of age and should possess at least VIII standard pass educational qualification;
   • Only one person from one family would be eligible for obtaining financial assistance. The “family” for this purpose would include self, spouse and children
   • Willingness to formalize and contribute10% of project cost and obtain Bank loan

Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental work shed could be included in the project cost. Lease rental of workshed to be included in the project cost should be for a maximum period of 3 years only.

Applications would be invited at the district level on an ongoing basis for Units, from those interested in availing the benefits under the Scheme. District Level Committee should study the report submitted by Resource Persons for each Unit and interview the interested persons. For the cases recommended by the District Level Committee, the DPR along with necessary documents should be submitted to the Banks for sanction of loan.

 Group category: FPOs / SHGs / Co-operatives

 Farmer Producer Organizations (FPOs)/Producer Cooperatives:

FPOs and Producer Cooperatives would be provided the following support:

• Grant @35% with credit linkage;
• Training support;
• It should preferably be engaged in processing of ODOP produce
• It should have minimum turnover of Rs.1 crore
• The cost of the project proposed should not be larger than the present turnover

 Self Help Groups (SHGs):

 Seed Capital

• Seed capital @ Rs40,000/- per member of SHG for working capital and purchase of small tools would be provided under the scheme.
• Priority would be given for SHGs involved in ODOP produce in giving seed capital
• Seed capital would be provided at the federation level of SHGs.
• This would be given as grant to the SHG federation by SNA/ SRLM.
• SHG federation would provide this amount as a loan to the members of SHGs to be repaid to the SHG.

Support to individual SHG member

as a single unit of food processing industry with credit linked grant @35% with maximum amount being Rs 10 lakh.

The SHGs should have sufficient own funds for meeting 10% of the project cost and 20% margin money for working capital or sanction of the same as grant from the State Government.

The SHG members should have for a minimum period of 3 years’ experience in processing of the ODOP product.

 Support for capital investment

Support for capital investment at federation of SHG level, with credit linked grant @35%.

 Training & Handholding Support to SHGs

Training & Handholding Support to SHGs: Assistance for training with the help of local resource persons in SRLM.

Support for common infrastructure

Support for common infrastructure would be provided to FPOs, SHGs, cooperatives, any Government agency or private enterprises. Credit linked grant would be available @ 35%.Support for ODOP product only.

Common infrastructure created under the scheme should also be available for other units and public to utilize on hiring basis for substantial part of the capacity.

The following common infrastructure would be funded under the Scheme:

• Premises for assaying of agriculture produce, sorting, grading, warehouse and cold storage at the farm-gate.
• Common processing facility for processing of ODOP produce.
• Incubation Centre.

Marketing and branding support

Marketing and branding support would be provided to groups of FPOs/SHGs/ Cooperatives or an SPV of micro food processing enterprises under the Scheme.

Eligible items for support

• Training relating to marketing to be fully funded under the scheme.
• Developing a common brand and packaging including standardization to participate in common packaging.
• Marketing tie up with national and regional retail chains and state level institutions.
• Quality control to ensure product quality meets required standards.
• Branding and marketing - should be at the district, regional or state level.
• Support for branding and marketing would be limited to 50% of the total expenditure.
• The proposal should relate to ODOP
• Minimum turnover of product to be eligible for assistance should be Rs 5 crore.

Online application for PM FME scheme: click here

Contact Details of District Level Officers for the Scheme PM FME

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Directorate of Industries Commerce, Vikas Bhavan P.O,Thiruvananthapuram Kerala 695033

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industriesdirectorate@gmail.com

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+91- 471-2302774