MSME

Government's scheme will help unorganised micro food enterprises scale up

Our Bureau New Delhi | Updated on May 15, 2020

In line with the vision to promote "Vocal for Local" with global outreach, the Central Government's scheme for formalisation of micro food enterprises will help them become more competitive and enable economies of scale across the production value chain, experts said.

The scheme aims to help nearly two lakh unorganised micro-food enterprises achieve technical upgradation in line with FSSAI's standards as well give them marketing and branding support.

Union Minister for Food Processing Harsimrat Kaur Badal said, " The new scheme for micro-food processing enterprises, with an outlay of ₹10,000 crore, shall leverage the collective strength of our FPOs, SHGs, Cooperatives and existing FP enterprises in unorganized sector, to position India as a World Food Factory."

"The micro FP enterprises constitute almost 98 per cent of the sector and 66 per cent amongst them are based in rural areas. Their potential was hitherto untapped. They shall now act as the new growth engine for India’s rural economy," she added.

The government will adopt a cluster-based approach across states for products such as mangoes, kesar, foxnuts, tapioca, chills, ragi, among other products.

Satyam S Sundaram, Partner, Government and Public Sector, EY India said, "Micro Food Enterprise Fund through cluster-based approach would help farmgate processing, adding to the farmers’ income. The cluster-based approach enables economies across the production value chain and will make the micro food enterprises more competitive."

The government is also hoping to focus on scaling up the value chains with focus on health and wellness, nutritional, herbal and organic products.

Prashant Parameswaran, MD & CEO, Kottaram Agro Foods known for brand Soulfull said, " Today's announcements leverage on India's bio-diversity through the cluster-based approach. It is important to build on health and wellness product value chains, and India’s ancient grains have the answer to this. Marketing this on a global scale requires lots of investments, and the government’s move on this is a positive step. We are looking at how to strengthen partnership with the farmer community further and make Ragi & Millets known at a global level by offering relevant products to consumers."

Meanwhile, the Central government has also decided to extend Operation Greens Scheme, implemented by the Ministry of Food Processing Industries from tomato, onion and potato crops to include all fruits and vegetables for better price realisation for farmers and reduction in wastage.

"An allocation of ₹ 500 crores is provided for assistance under short term price stabilisation measures for the coming six months on a pilot basis. Subsidy at the rate of 50 per cent of the cost of transportation and storage, including cold storage, will be provided for the evacuation of fruits and vegetables from the surplus production area to consumption centres/markets," an official statement said.

Published on May 15, 2020

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