Context: Recently, the Ministry of Food Processing Industries (MoFPI) has launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme as a part of ‘Atmanirbhar Bharat Abhiyan’.
Background

• The unorganised food processing sector faces a number of challenges which limit their performance and their growth.
• These challenges include lack of access to modern technology & equipment, training, access institutional credit, lack of basic awareness on quality control of products; and lack of branding & marketing skills, etc.
• The unorganized food processing sector comprising nearly 25 lakh units contributes to 74% of employment in the food processing sector.
• Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises supporting the livelihood of rural household and minimizing their migration to urban areas.
• These units largely fall within the category of micro-enterprises.

About the PM FME Scheme

• The scheme was launched as part of the Atmanirbhar Bharat Abhiyan.
• It is proposed as a Centrally Sponsored scheme.
• The objective of the scheme is to support local unorganized food processing units in the country.
• Scheme aims to providing financial, technical and business support for up gradation of existing micro food processing enterprises.
• It will be Implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.

The expenditure under the scheme would to be shared in:

• 60:40 ratio between Central and State Governments
• 90:10 ratio with North Eastern and Himalayan States
• 60:40 ratio with UTs with legislature
• 100% by Centre for other UTs.

The Scheme adopts One District One Product (ODOP) approach to reap benefit of scale in terms of procurement of inputs, availing common services and marketing of products.

• The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
• Existing individual micro food processing units desirous of upgrading their unit can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
• Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools.
• FPOs/SHGs/producer cooperatives would be provided credit-linked grant of 35% for capital investment along the value chain.
• Support would be provided through credit-linked grant @ 35% for development of common infrastructure including common processing facility, lab, warehouse, cold storage, packaging and incubation centre through FPOs/SHGs/cooperatives or state-owned agencies or private enterprise to use by micro-units in the cluster.
• Support for marketing & branding would be provided to develop brands for micro-units and groups with 50% grant at State or regional level which could benefit a large number of micro-units in clusters.
• The Minister also announced the extension of Operation Greens from TOP (tomato-onion-potato) to all perishable fruits and vegetables. 

About Operation Green

• It is a price fixation scheme that aims to ensure farmers are given the right price for their produce.
• It aims to promote Farmer Producers Organizations (FPO), Agri-logistics, processing facilities and professional management of agri-produce.
• It focuses on organized marketing of Tomatoes, Onions and Potatoes (TOP vegetables) by connecting farmers with consumers.
• State Agriculture and other Marketing Federations, Farmer Producer Organizations (FPO), cooperatives, companies, Self-help groups, food processors etc. can avail the financial assistance under it.
• To help in the structural and infrastructure part of the scheme, agriculture market committee (APMCs) promoted markets will be connected to the e-NAM platform.
• The government will also help in development of 22,000 agricultural markets.

Additional Facts

• E-NAM (e-National Agriculture Market) is an important initiative of GoI to use pan-India electronic trading portal for bidding and network the existing APMC mandis to create a unified national market for agricultural commodities.
• Agricultural Produce Market Committee (APMC) is a statutory market committee constituted by a State Government in respect of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce Market Committee Act issued by that state government.