May 16, 2020
Scheme worth Rs. 10,000 crore will be implemented on the lines of PM’s vision of ‘vocal for local with global outreach’, to help two lakh micro food enterprises (MFE); improved health and safety standards, integration with retail markets and improved incomes to be key focus areas, said the minister.
To support the millennials during the crisis, finance minister Nirmala Sitharaman announced a scheme to give relief to micro food enterprises, farmer producer’s organizations, self-help groups and cooperatives. This moves was rolled out after PM Modi announced massive government support to sections of industries and economy lately.
Scheme worth Rs. 10,000 crore will be implemented on the lines of PM’s vision of ‘vocal for local with global outreach’, to help two lakh micro food enterprises (MFE); improved health and safety standards, integration with retail markets and improved incomes to be key focus areas, said the minister.
The unorganized MFEs units need technical up-gradation to attain (FSSAI) food standards, to build brands and marketing, stated Sitharaman.
According to the specific data, there are around 25 lakh unregistered food processing enterprises comprising of 98 per cent of the sector, are basically unorganized. Out of these nearly 66 per cent of these units are situated in rural areas. And about 80 per cent of them are family-oriented ventures.Sitharaman said that the focus mainly will be on cluster-based approach with focus on perishable foodstuffs like saffron in Jammu & Kashmir, bamboo shoots in north east, makhana (Lotus Seeds) in Bihar, mango in Uttar Pradesh, chilli in Andhra Pradesh and Tapioca in Tamil Nadu.
Along with health, government is also aiming to improve safety standards, assimilate it with retail markets for better and improved incomes. This action will also help in reaching untapped export markets in view of improved health consciousness, she said.
She further added that strengthening this segment will lead to reduction in wastage, creation of off-farm job opportunities and aid in achieving the government objective of doubling farmers’ income.
According to a govt official, in totality, the scheme will be shared between the centre and states at the ratio of 60:40 per cent. The micro enterprises will be supported with credit linked subsidy and the scheme will be implemented over a five year period starting from 2020-21 to 2024-25.
The official further added that the micro enterprises with investment in plant and machinery up to Rs. 25 lakh will get credit linked subsidy at 35% of the project cost with ceiling of Rs. 10 lakh, he said. The beneficiary contribution will be minimum 10% and balance from loan.
The food processing sector faces a number of challenges including the inability to access credit, high cost of institutional credit, lack of access to modern technology, inability to integrate with the food supply chain and compliance with the health &safety standards, expressed the official.