FNB News - “75 proposals approved for setting up Incubation Centres under PMFME”

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INTERVIEW

“75 proposals approved for setting up Incubation Centres under PMFME”

Monday, 09 May, 2022, 08 : 00 AM [IST]

MoFPI has witnessed several key initiatives in recent times from PLI scheme to PM-FME, as the focus of the government is on increasing value addition to the agri economy. Prahlad Singh Patel, Minister of State for Food Processing Industries, in an email interaction, spoke at length about policies of his ministry and future roadmap with Ashwani Maindola. Excerpts:

1. What are the policy decisions taken by your Ministry for the progress of the food processing sector and the status of their implementation at present? Specifically, how is your Ministry implementing the goal of applying modern technology to the food processing industries and what are your Ministry's plans for research and development in the food processing sector?

Ans. Nearly half of India's population is dependent on agriculture for livelihood and agricultural development often fuels the development of other segments of the economy, agriculture and farmers are one of the main focus areas of the government for the past seven years. In this regard, the food processing sector plays an important role in reducing crop and post-harvest losses of agriculture and allied sector production through investment in preservation and processing infrastructure for value addition in the country, creation of non-farm jobs and plays an important role in doubling the farmers' income.

The Ministry of Food Processing Industries has recently significantly increased its interventions and assistance to ensure the overall development of the sector. It is supporting small and medium food processing enterprises through various component schemes of Pradhan Mantri Kisan Sampada Yojana, promoting micro enterprises through Centrally sponsored Pradhan Mantri Micro Food Processing Enterprises Upgradation (PMFME) and Production Linked Incentive Scheme (PLIS) is helping to build a champion brand in the region. PMKSY is being implemented from the year 2016-17, while PMFME and PLIS have been launched in the year 2020-21 and 2021-22 respectively.

A total of 1082 projects have been approved for assistance under PMKSY. Out of these, 618 projects have been completed resulting in processing and preservation capacity of 184.47 lakh MT. Upon completion of the approved projects, an investment of Rs 14597 crore is likely to benefit about 50 lakh farmers and is expected to result in more than 6 lakh direct/indirect employments.

The scheme has been further restructured and is being implemented from the year 2021-22 to 2025-26 with a total outlay of Rs.4600 crore. The Operation Greens component of PMKSY has been increased from Tomato, Onion and Potato (TOP) to 22 perishable food items.

Further, a total of 75 proposals have been approved for setting up of Incubation Centres under PMFME with an outlay of Rs 200 crore and One District One Product (ODOP) has been finalised for 710 districts of 35 States/UTs and has been approved. Out of these 710 ODOPs, 137 unique products have been identified.

Also, the Ministry provides financial assistance for undertaking demand based R&D work for the benefit of the food processing industry in terms of product and process development, efficient technologies, better packaging, value addition etc. through a dedicated R&D component in PMKSY. Two autonomous institutes under the administrative control of the Ministry- NIFTEM, Kundli and NIFTEM, Thanjavur are also engaged in the development of new technologies for this sector. These institutions have been accorded the status of Institute of National Importance.

2. Your Ministry is also in talks with the Ministry of Commerce to promote export of processed food products.Can you elaborate on this topic and its implementation plan?

Ans. The food processing sector accounts for 10.4% of exports and 8.98% of manufacturing GVA in the country. The Ministry is working closely with the Ministry of Commerce and its affiliated bodies like APEDA, MPDA and Export Promotion Councils to enhance the level of exports and is working towards linking the District Export Hub initiative with the ODOP approach of PMFME. The Ministry works closely with the Ministry of Commerce to resolve tariff issues, RoDTEP matters besides non-tariff barriers faced by our industry in the overseas market.

3. The sector also lacks credit availability for entrepreneurs and has high interest rates (for example the Rs 2000 crore NABARD fund which remains largely underutilised).Do you see the need for availability of low rate credit and how are you planning for it?

Ans. Easy and affordable credit availability is crucial for the development of the sector and the Ministry takes up the issue of utilisation of dedicated funds created in NABARD for designated food parks and food processing units in these designated food parks. However, the government has taken several other measures to ease credit availability to the sector at affordable rates. In May 2020, the government has introduced a flagship National Infrastructure Financing Facility of Rs 1 lakh crore namely Agriculture Infrastructure Fund (AIF) to finance agricultural infrastructure, especially, post-harvest including godowns/silos, packaging units, assaying units, sorting and grading units, cold stores and cold chains, logistics facilities, primary processing centres, ripening, chambers, waxing plants etc. There is an interest subvention of 3% p.a. on all loans under this financing facility to the extent of Rs 2 crore. The loans are backed by a credit guarantee cover of up to Rs 2 crore. Agri-entrepreneurs and processors are being encouraged to take advantage of this major support facility. In addition, a large range of activities under food processing and agro-processing are covered under Priority Sector Lending (PSL) norms.

4. Recently Production Linked Incentive Scheme –PLI was launched with a corpus of Rs.10900 crore for MoFPI. How will this scheme help the processing sector?

Ans. The Production Linked Incentive Scheme for the Food Processing Industry was approved by the Union Cabinet on March 31, 2021. The scheme has been prepared on the basis of NITI Aayog's Cabinet Note on “Atmanirbhar Bharat Abhiyan for Encouraging Indian Manufacturing Capabilities and Increasing Exports”, which linked production in 10 specific product lines including the proposed scheme of PLI for Food Processing Industry. The incentive scheme to launch was approved by the Union Cabinet. The primary objective of this scheme of the Ministry is to support the creation of global food manufacturing champions; Support of Indian brands of food products in international markets; To increase employment opportunities for non-farm jobs and to ensure remunerative prices for agricultural produce and higher income to farmers. The plan has two components. The first pertains to promotion of manufacturing of four major food product segments viz. Ready to Cook/Ready to Eat (RTS/RTE) Foods, Processed Fruits and Vegetables, Marine Products, Mozzarella Cheese.

The latest/organic products of SMEs including free range-eggs, poultry meat, egg products in these segments are also covered under this component. The second component relates to support for branding and marketing abroad to encourage the emergence of strong Indian brands. The implementation of this scheme is expected to expand the processing capacity to generate processed food products worth about Rs 33,400 crore. There is a possibility of additional investment of about Rs 9000 crore from this scheme. Also, by the year 2026-27, employment will be created for about 2.5 lakh people. This scheme will give further impetus to the efforts being made by the Indian industry and will be effective in bringing in fresh investments in the processing sector. This sector will definitely touch new heights by taking advantage of this incentive scheme.

5. MoFPI had a plan to build mini parks, what is the status of this plan?Apart from this, what is the status of Mega Food Park scheme?What is the impact of these schemes on the food processing sector?

Ans. The Ministry is implementing Agro-Processing Cluster (APC) Infrastructure Scheme to create common modern food processing/preservation infrastructure facilities for food processing/preservation units. The scheme is similar to the Mega Food Park scheme, but on a much smaller scale, as the area for the APC is 10 acres as against the 50 acres required for the Mega Food Park. Hence this scheme is also called as Mini Food Park (MNFP). The Ministry has approved 68 Mini Food Parks out of which 12 are operational resulting in processing and preservation capacity of 4.07 MT. A total capacity of 19.65 lakh metric tonnes will be added to this area upon completion of all the projects. The Ministry of Food Processing Industries is implementing Mega Food Park Scheme (MFPS), a component scheme under PMKSY, to create modern infrastructure for the food processing sector along the value chain from farm to market. Under this scheme, the Ministry has approved 41 Mega Food Park projects. Out of this 23 parks are operational. The scheme has been discontinued by the Government with effect from April 1, 2021, with the provision of committed liabilities for ongoing projects. Processing and preservation capacity of 28.69 lakh tonnes has been expanded by the operating units of Mega Food Park scheme. Apart from this, 59277 farmers have got the benefit of the scheme and 6.6 lakh jobs have been created.