PMFME: Strengthening Micro Food Units

As of June 2025, ?3,791.1 crore has been released to States/UTs, with over 1.44 lakh loans sanctioned under the PMFME scheme, reflecting progress in formalising India’s micro food processing sector.

“Vocal for Local”: Building Competitiveness in Food Processing

Introduction

• Launched on 29 June 2020, PMFME is a Centrally Sponsored Scheme under the Atmanirbhar Bharat Abhiyaan.
• Total outlay: ?10,000 crore (2020–21 to 2025–26) with cost-sharing (Centre–State 60:40; 90:10 for NE/Himalayan States; 100% for UTs without legislature).
• Aims: formalisation of 2 lakh micro food units, adoption of ODOP (One District One Product) approach, and strengthening infrastructure.

Key Components of the Scheme

• Support for Individual Units
  • Credit-linked subsidy: 35% of project cost (ceiling ?10 lakh).
  • Beneficiary contribution: 10%; balance via bank loan.
• Support for Groups (FPOs/Cooperatives/SHGs)
  • Seed capital: ?40,000 per SHG member for working capital and tools.
  • Grant support at 35% for FPOs and cooperatives.
  • Branding & marketing assistance for ODOP products at state/regional level.

• Common Infrastructure
  • Facilities for grading, warehousing, cold storage, processing units, incubation centres.
  • Promotes shared facilities for clusters under ODOP.
• Capacity Building
  • Training and R&D support by NIFTEM, IIFPT, ICAR institutes, CSIR labs.
  • Focus on technology adoption, entrepreneurship, and product-specific improvements.

Achievements (As of June 2025)

• ?11,501.79 crore loans sanctioned under credit-linked subsidy (1.44 lakh units).
• Seed capital support for 1.03 lakh SHG members worth ?376.98 crore.
• 93 common infrastructure projects sanctioned (?187.20 crore).
• 27 branding and marketing projects approved (?82.82 crore).
• 16 lakh beneficiaries trained in modern practices.
• Food processing exports:USD 49.4 billion (2024–25), with processed foods forming 4% of the share.

Analysis

• Economic Impact
  • Strengthens linkages between agriculture and industry, creating rural jobs and reducing post-harvest losses.
  • Expands India’s processed food exports, contributing to forex earnings.
• Social Impact
  • Promotes women empowerment through SHGs.
  • Supports traditional foods under ODOP, preserving cultural identity while improving market access.
• Institutional Impact
  • Brings informal enterprises into the formal regulatory and credit system.
  • Enhances skills and innovation via training institutes and incubation centres.

Challenges

• Low awareness among rural entrepreneurs and SHGs.
• Credit access difficulties despite subsidies, especially for first-generation entrepreneurs.
• Logistical gaps in cold chains and last-mile connectivity.
• Quality certification and standardisation remain weak for small producers.

Way Forward

• Awareness Campaigns: Strengthen outreach in rural areas with digital platforms and grassroots mobilisation.
• Ease of Credit: Simplify bank procedures, expand microfinance and fintech involvement.
• Market Linkages: Tie-ups with e-commerce, retail chains, and export councils to boost ODOP visibility.
• Quality Assurance: Provide standardisation and certification facilities at district level.
• Sustainability Integration: Encourage eco-friendly packaging, renewable energy use in processing units.