Executive Summary:
This document outlines the Indian government's initiatives to support farmers in linking with food processors and adopting quality standards. It details provisions under schemes like PMKSY, PLISFPI, and PMFME, focusing on financial assistance, infrastructure development, and capacity building. These initiatives aim to enhance farmer income through direct linkages and improved food processing practices.
Key Points / Main Content:
Financial Support and Scheme Provisions:
* MoFPI implements Central Sector Schemes PMKSY and PLISFPI, along with the Centrally sponsored PMFME scheme, for which FPOs are eligible to apply.
* Under PMKSY, FPOs receive preferential treatment, including:
* Reduced Net Worth requirement to equal the grant sought.
* Lower Term Loan requirement at 10% of eligible project cost.
* Equity requirement reduced to 10% of eligible project cost.
* Enhanced grant quantum at 50% of eligible project cost.
* Minimum project cost reduced to Rupees One Crore for Creation/Expansion of Food Processing/Preservation Capacities Scheme projects.
Infrastructure Development:
* The Integrated Cold Chain and Value Addition Infrastructure component scheme of PMKSY mandates farm-level infrastructure creation in the targeted produce's catchment area.
* Under Integrated Value Chain Development Projects of Operation Greens, new FPOs, temperature-controlled vehicles, and marketing infrastructure are mandatory.
Capacity Building and Quality Standards:
* The PMFME scheme provides support for formalization and operationalization of micro food processing enterprises, including FSSAI registration/licensing.
* Capacity building under PMFME includes training on FSSAI regulations, safety and hygiene practices, and food quality testing norms.
* MoFPI provides grants for training various groups, including trainers, entrepreneurs, SHGs, FPOs, and Cooperatives.
* Grants of up to 50% are available for branding and marketing support to FPOs, SHGs, Cooperatives, or a Special Purpose Vehicle of Micro Food Processing Enterprises.
Impact Analysis:
Farmers:
* Impact: Farmers benefit from direct linkages with food processors, potentially leading to fairer prices and increased income. They also receive support for adopting quality standards and certifications through training and financial assistance.
* Action Required: Farmers should explore opportunities to form or join FPOs, participate in training programs, and apply for grants under the PMKSY and PMFME schemes.
Food Processors:
* Impact: Food processors can benefit from improved supply chain efficiency through contract farming and aggregators. They can also access higher quality produce from farmers who have adopted quality standards.
* Action Required: Food processors should consider establishing direct linkages with farmers and FPOs to secure a stable supply of raw materials and potentially improve product quality.
Farmer Producer Organizations (FPOs):
* Impact: FPOs are eligible for preferential treatment under PMKSY, including reduced financial requirements and enhanced grant support.
* Action Required: FPOs should apply for schemes under PMKSY and PMFME to avail of financial assistance, infrastructure development, and capacity building opportunities.
Micro Food Processing Enterprises:
* Impact: These enterprises receive handholding support for formalization and operationalization, including FSSAI registration/licensing. They can also access training programs and grants for branding and marketing.
* Action Required: Micro food processing enterprises should participate in the PMFME scheme to formalize their businesses, improve food safety practices, and enhance their market presence.
Key Entities Referenced
Ministry of Food Processing Industries: The Indian government ministry responsible for food processing policies and initiatives. Also referred to as MoFPI.
Pradhan Mantri Kisan SAMPADA Yojana (PMKSY): A Central Sector Scheme implemented by the Ministry of Food Processing Industries, aimed at creating modern infrastructure for food processing.
Production Linked Incentive Scheme for Food Processing Industry (PLISFPI): A Central Sector Scheme implemented by the Ministry of Food Processing Industries to incentivize food processing.
PM Formalization of Micro Food Processing Enterprises (PMFME): A Centrally sponsored scheme focused on formalizing and upgrading micro food processing enterprises.
Farmer Producer Organization (FPO): An organization of farmers to improve their collective bargaining power and access to resources. FPOs are eligible to apply under PMKSY, PLISFPI and PMFME schemes.
Operation Greens: A component scheme of PMKSY focusing on integrated value chain development projects.
Food Safety and Standards Authority of India (FSSAI): An autonomous body established under the Ministry of Health & Family Welfare, Government of India that sets science-based standards for food products.
Self Help Groups (SHGs): A financial intermediary committee, usually composed of 10–25 local women or men.
GOVERNMENT OF INDIA
MINISTRY OF FOOD PROCESSING INDUSTRIES
LOK SABHA
UNSTARRED QUESTION NO. 1958
ANSWERED ON 31ST JULY, 2025
SUPPORT TO FARMERS FOR ADOPTING QUALITY STANDARDS
1958. SHRI ANUP SANJAY DHOTRE:
Will the Minister of FOOD PROCESSING INDUSTRIES be pleased to state:
(a) the manner in which the Government is facilitating direct linkages between farmers and
food processors to ensure fair prices;
(b) the details of the existing initiatives to promote contract farming and aggregators for
supply chain efficiency;
(c) the manner in which the farmers are supported in adopting quality standards and
certifications; and
(d) the details of the training and capacity-building programmes available to farmers for
value addition?
ANSWER
THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES
(SHRI RAVNEET SINGH)
(a) & (b): Ministry of Food Processing Industries (MoFPI) is implementing two Central Sector
Schemes namely Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) and Production Linked
Incentive Scheme for Food Processing Industry (PLISFPI). Further, a Centrally sponsored
scheme namely PM Formalization of Micro Food Processing Enterprises (PMFME) scheme is
also being implemented.
Farmer producer organization (FPO) are eligible to apply under these schemes. Under
PMKSY, the following preferential provisions have been made in component scheme
guidelines of PMKSY for FPOs:
i. Net Worth requirement reduced to amount equal to grant sought, in comparison to
1.5 times for proposals from general areas;
ii. Term Loan requirement reduced to 10% of eligible project cost, in comparison to
20% for proposals from general areas;
iii. Equity requirement reduced to 10% of eligible project cost, in comparison to 20%
for proposals from general areas;
iv. Quantum of grant at enhanced level of 50% of eligible project cost, in comparison
to 35% for proposals from general areas (Subject to the maximum ceiling under respective sub-
schemes);
v. Requirement of minimum project cost reduced to Rupees One Crore, in comparison
to rupees Three Crores in respect of Creation / Expansion of Food Processing & Preservation
Capacities Scheme projects [for other component schemes, no such criteria is fixed]
Under Integrated Cold Chain and Value Addition Infrastructure component scheme of
PMKSY, creation of farm level infrastructure in the catchment area of the targeted produce is
mandatory. Similarly, under Integrated Value Chain Development Projects of Operation
Greens component scheme of PMKSY, formation of new FPOs, Controlled temperature/
ventilated vehicle and Marketing Infrastructure (Retail chain of outlets for perishable productswith facilities such as frozen storage/ cold room/ cold storage/ deep freezers/ refrigerated
display cabinets/ chillers/ packing/ packaging/ ripening chamber etc.) are mandatory.
All these help in creation of linkage between farmers & food processors and thereby
increasing the income of the farmers.
(c) & (d): PMFME scheme provides for handhold support for formalization and
operationalization of the micro food processing enterprises including FSSAI
registration/licensing, as applicable. Under Capacity building component of the PMFME
scheme, trainings in FSSAI regulations, safety and hygiene practices, food quality testing
norms etc. is provided to ensure the outreach of food safety and hygiene practices to all micro
food enterprises.
MoFPI also provide Grants for training of Trainers (Master Trainers, District Level
Trainers), District Resource Persons, Food Processing Entrepreneurs and various other groups
(SHGs/ FPOs/ Cooperatives). Grants upto 50% for branding and marketing support to groups
of FPOs/ SHGs/ Cooperatives or a Special Purpose Vehicle of Micro Food Processing
Enterprises is available under related component of PMFME Scheme.
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