One District One Product (ODOP) Under PMFME Scheme
The PMFME scheme has embraced the One District One Product (ODOP) strategy to enhance the procurement of inputs, common services, and marketing of products. This initiative aims to establish a framework for aligning support infrastructure and developing the value chain.
Through the ODOP approach, states will identify and promote specific food products within each district. These products may include perishable agricultural crops, cereal-based items, or any food product predominantly produced in the area.
Examples of products under the ODOP initiative include tomatoes, litchis, potatoes, millet-based goods, fishery products, mangoes, animal feed, poultry, and meat. Additionally, traditional Indian herbal products such as turmeric, amla, honey, and minor forest products from tribal regions will also be supported by this scheme. The ODOP approach will provide robust infrastructure facilities, along with branding and marketing assistance.
PMFME Scheme list
The PMFME Scheme is a multi-faceted program designed to uplift the micro food processing sector. It encompasses:
- Common Infrastructure Development: Establishing facilities that benefit clusters of food processing units.
- Branding and Marketing: Assisting enterprises in developing brand identity and marketing strategies.
- Capacity Building and Research: Offering training and research support to improve production quality and efficiency.
- Support to Food Processing Units: Providing financial aid to individual micro food processing units to enhance their competitiveness.
- Seed Capital for SHGs: Empowering Self-help Groups with seed capital to facilitate loans to their members.
PMFME Scheme subsidy
The PMFME Scheme subsidy is a Government of India initiative aimed at supporting micro food processing enterprises. Here's how it works:
- Financial assistance: The scheme provides financial assistance to eligible enterprises for technology upgrades, infrastructure development, and capacity building.
- Technology upgrades: Subsidy funds can be used to invest in modern equipment and machinery to enhance production efficiency and product quality.
- Infrastructure development: Enterprises can utilize the subsidy to improve their infrastructure, including building and upgrading facilities for food processing.
- Capacity building: The scheme supports capacity building initiatives such as training programs to enhance the skills and knowledge of personnel involved in food processing.
- Competitiveness boost: By availing of the subsidy, micro food processing enterprises can enhance their competitiveness in the market, leading to increased market share and profitability.
- Sustainability: The scheme promotes sustainable growth in the food processing sector by enabling enterprises to adopt modern technologies and practices.
- Market reach expansion: With improved infrastructure and product quality, enterprises can expand their market reach and explore new business opportunities.
Overall, the PMFME Scheme Subsidy plays a vital role in facilitating the growth and formalisation of micro food processing enterprises in India, thereby contributing to the development of the food processing industry.
Leveraging business loans for growth
While the PMFME scheme provides a solid foundation, integrating business loans can further empower micro food processing enterprises. Business loans can supplement the financial assistance from the PMFME scheme, covering additional expenses that are critical for scaling up operations. These loans can be used for a variety of purposes, including purchasing new equipment, upgrading technology, expanding facilities, or even for working capital management.
Financial institutions and banks offer specialised business loans tailored for the food processing sector, with attractive interest rates and repayment schedules. Entrepreneurs should leverage these loans strategically to bridge any funding gaps, ensuring that their enterprise can grow without financial constraints.
Features of the PMFME scheme
- Credit-Linked Capital Subsidy: Under the PM FME Scheme, a 35% subsidy is offered on eligible project costs, up to Rs. 10 lakh per unit. This is available for individuals, proprietorships, partnerships, FPOs, NGOs, cooperatives, SHGs, and private limited companies.
- Common Infrastructure: Provides a 35% subsidy on eligible project costs for groups like FPOs, FPCs, cooperatives, SHGs, and government agencies, with a maximum subsidy of Rs. 3 crore (up to Rs. 10 crore project cost).
- One District One Product (ODOP): Encourages scale advantages in sourcing inputs, using common facilities, and marketing products.
- Seed Capital for SHGs: Offers Rs. 40,000 per SHG member to support working capital and purchase of small tools.
- Marketing & Branding Support: Provides a 50% financial grant to help with branding and marketing of products.
- Capacity Building: Includes training programmes to develop entrepreneurship skills in food processing.
Benefits of PMFME Scheme
Managing expenses effectively is crucial for the success of any micro food processing enterprise. The PMFME scheme, coupled with business loans, offers a financial backbone, but entrepreneurs must also adopt sound financial management practices. This includes:
- Budgeting and Cost Control: Keeping a close eye on expenditures and identifying areas where costs can be minimised without compromising on quality.
- Investing in Technology: Utilising part of the funds to invest in technology that can automate processes, reduce wastage, and increase efficiency.
- Market Research and Branding: Allocating resources towards understanding market trends and consumer preferences, and using this knowledge to create strong brand identities.
- Quality and Compliance: Ensuring compliance with food safety and quality standards, which is critical for gaining consumer trust and accessing broader markets.
Opting for the PMFME Scheme offers numerous benefits, including financial subsidies, training programs, and market access. This scheme is particularly advantageous for entrepreneurs looking to formalise their operations and tap into a larger consumer base. Eligibility criteria are designed to be inclusive, targeting existing micro food processing enterprises seeking to upgrade or expand their operations.
PMFME Scheme Eligibility Criteria
Different types of assistance under the PM FME Scheme require specific eligibility criteria, outlined as follows:
Common infrastructure development
- Farmer Producer Organisations (FPOs), cooperatives, and Self-Help Groups (SHGs) must have been engaged in processing ODOP (One District One Product) produce for at least 3 years.
- FPOs and cooperatives should have a minimum turnover of Rs. 1 crore, with the project cost not exceeding the current turnover.
- SHGs, cooperatives, and FPOs must have internal resources to contribute 10% of the project cost and provide margin money for working capital.
Branding and marketing
- The proposal must be related to ODOP products.
- The product should have a minimum turnover of Rs. 5 crore.
- The final product must be sold in a retail pack directly to consumers.
- The product and producer should have the potential for scalability.
- The entity must demonstrate management and entrepreneurship capabilities for product promotion.
Capacity building and research
- Support is available for individual units and groups that receive capital investment.
- Existing units and groups involved in processing ODOP products in the district are eligible.
- Groups receiving assistance for branding and marketing are also included.
Support to food processing units
- Individuals or partnership firms with ownership rights over the enterprise are eligible.
- Existing micro food processing units currently in operation can apply.
- The unit must be verified by an authorised resource person.
- Applicants must be at least 18 years old and have a minimum educational qualification of VIII standard pass.
- Only one person per family can receive financial assistance, with ‘family’ including the applicant, spouse, and children.
Seed capital for SHGs
- Only SHG members actively engaged in food processing are eligible.
- SHG members must commit to using the funds for working capital and purchasing small tools, with a formal commitment to the SHG federation and their SHG group.
Application process for the PMFME Scheme
The application process for the PMFME Scheme is streamlined for convenience. Interested entrepreneurs can apply online through the PMFME portal (PMFME login), where the application form and detailed instructions are available. For those preferring offline methods, applications can be submitted through local nodal agencies. The process involves submitting a detailed project report and requisite documents, following which the application is reviewed and processed.
PMFME online application
If you want to apply for the PMFME scheme online, follow these steps:
- Visit the official PMFME website.
- Click on ‘Login’ and then select ‘Applicant Registration.’
- Fill in the required information on the application form and click ‘Register.’
- Return to the PMFME website, click on ‘Login,’ and select the ‘Applicant Login’ option.
- Enter your User ID and password, then click ‘Submit.’
- From the dashboard, select the ‘Apply Online’ option.
- Complete the relevant form with all necessary details and click ‘Submit.’
The PMFME scheme is designed to support the unorganised food processing sector, which consists of 2.5 million units. By leveraging this scheme, these units will be better equipped to tackle challenges related to modern technology, equipment, institutional credit, training, and more, ultimately contributing to the improvement of the sector and the overall economy.
Facts about the PM FME scheme
Key points about the PM FME Scheme:
- The scheme primarily supports individual entrepreneurs, proprietorships, partnerships, and private limited companies. It also benefits groups such as Farmer Producer Organisations (FPOs), Self-Help Groups (SHGs), Micro Food Processing Entrepreneurs, and cooperatives across the food processing value chain.
- Food processing units can avail a credit-linked subsidy of up to 35% of the eligible project cost, with a maximum limit of Rs. 10 lakh per unit.
- The scheme’s funding is shared between the Central and State governments in a 60:40 ratio. For North-Eastern and Himalayan States, the ratio is 90:10, while in Union Territories with legislatures it is 60:40, and in those without legislatures, it is fully funded (100%) by the Central Government.
- Self-Help Groups (SHGs) receive seed capital of Rs. 40,000 per member to cover working capital needs and purchase small tools.
Conclusion
The Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME) is a landmark initiative that offers a lifeline to micro food processors across India. By providing financial support, training, and market access, it lays the groundwork for these enterprises to thrive. However, to fully realise their growth potential, entrepreneurs should also consider integrating business loans into their financial strategy. This dual approach can provide the necessary capital infusion to manage expenses effectively and scale operations.
As the food processing sector continues to evolve, initiatives like the PMFME scheme and the strategic use of business loans will be instrumental in driving the growth of micro enterprises. By embracing these opportunities, entrepreneurs can build sustainable businesses that contribute to the economic fabric of India, creating jobs and promoting regional cuisines on a national and international stage.
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