Overview Of Scheme For Formalization Of Micro Food Processing Enterprises (FME)

Background

Mobile App The unorganized food processing sector in the country comprising nearly 25 lakh food processing enterprises which are unorganized and unregistered. With only 7% of investment in plant & machinery and 3% of outstanding credit, the unorganized enterprises contribute to 74% of employment (a third of which are women), 12% of output and 27% of the value addition in the food processing sector. Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises.

The sector faces a number of challenges including the inability of the entrepreneurs to access credit, high cost of institutional credit, lack of access to modern technology and inability to integrate with the food supply chain and compliance with the health and safety standards. To address these problems, through a comprehensive package of interventions. Government of India has approved an all India Centrally Sponsored Scheme “Scheme for Formalisation of Micro food processing Enterprises (FME)”

Aim

To modernize and enhance the competitiveness of the existing individual micro enterprises and ensure their transition to formal sector
To support FPOs/ SHGs/ Cooperatives for delivery of package of services, creation of common infrastructure along the value chain, ensure backward & forward linkages, branding & marketing, etc.

Objectives

Increase access to finance Increase in revenues of target enterprises
Enhanced compliance with food quality and safety standards
Strengthening capacities of support systems
Special focus on Women entrepreneurs and Aspirational Districts
Encourage Waste to Wealth activities
Focus on minor forest produce in Tribal Districts Transition from the unorganized sector to the formal sector

Salient features

All India Centrally Sponsored Scheme with an Outlay of Rs.10,000 crore for 5 years from 2020-21 to 2024-25
Coverage of 2,00,000 enterprises
Expenditure to be shared by Government of India and States at 60:4
About Rs. 25,000 Cr investment is expected under the program
Cluster approach and Focus on perishables
Assisted units to have unique identity

Scheme Components

Support to Individual Micro Units

Support for FPOs/SHGs/ Cooperatives

Capacity building

Brand Building and Marketing

Common infrastructure facilities

Support from the existing schemes under implementation by the Government of India and State Governments
To fill in the gaps, where support is not available from other sources, especially for capital investment, handholding support, training and common infrastructure

Employment Generation Potential

The project is likely to generate nine lakh skilled and semi-skilled jobs.
Nearly eight lakh micro- enterprises will benefit through access to information,
better exposure and formalization