Effectiveness of PM-FME scheme on small food processing enterprises in Andhra Pradesh: A study on ragi (Eleusine coracana) processing units

Introduction

Ragi (Eleusine coracana), commonly known as finger millet, is an important nutri-cereal crop widely cultivated in rainfed and semi-arid regions of India. It is valued for its high calcium, dietary fibre, iron and essential amino acids, and is increasingly preferred in healthoriented diets. In Andhra Pradesh, ragi is processed into flour, malt, snacks and other valueadded products, creating opportunities for rural employment and agro-based entrepreneurship. Studies have reported increasing demand for millet-based foods and the growing importance of small processing enterprises in value addition and income generation (FAO 2021; Ministry of Food Processing Industries 2022). Despite its potential, many small ragi processing units face problems such as inadequate finance, outdated machinery, poor packaging, weak market linkages, low technical knowledge and limited awareness of government support programmes. These constraints reduce productivity, profitability and competitiveness. To address such issues, the Government of India launched the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PM-FME) Scheme to provide credit-linked subsidy, skill development, branding, common infrastructure and market support to micro food enterprises (Ministry of Food Processing Industries 2020). However, limited empirical evidence is available on the effectiveness of PM-FME support for ragi or finger millet processing units in Andhra Pradesh. Therefore, the present study was undertaken to analyse the objectives of socio-economic profile of unit owners, assess awareness and utilisation of PM-FME benefits, evaluate financial and technical support received, measure its impact on production, income, profitability and technology adoption, and identify major constraints and challenges faced by entrepreneurs.

The study was guided by the hypothesis that PM-FME beneficiary units perform better in terms of production efficiency, income and enterprise development than nonbeneficiary units. The findings may help improve policy implementation and promote sustainable growth of milletbased micro enterprises in Andhra Pradesh.

Materials and Methods

The present study was conducted to evaluate the effectiveness of the PM-FME scheme on ragi processing units in Andhra Pradesh during the agricultural years 2024-2026. The study covered two major ragi-producing districts, namely Anantapur and Kurnool, selected purposively based on the intensity of finger millet (Eleusine coracana L.) cultivation, presence of small and medium-scale processing units, and implementation of PM-FME scheme interventions.

A multi-stage stratified random sampling design was adopted. A total of 120 ragi processing units were selected randomly from official lists obtained from District Industries Centres and PM-FME implementation agencies. Data were collected from owners/managers of processing units using a pre-tested structured interview schedule. Information was collected on socio-economic characteristics, scheme awareness, production levels, cost of processing, income, marketing channels, and constraints.

Sampling Design: The study followed a multi-stage sampling procedure consisting of district selection, mandal selection, village selection, and final selection of ragi processing units and stakeholders. The study was conducted in Anantapur and Kurnool districts of Andhra Pradesh, selected due to their high ragi cultivation and presence of small and medium-scale processing units under the PM-FME scheme. From each district, two mandals (Roddam, Hindupur in Anantapur; Adoni, Yemmiganur in Kurnool) were selected to represent variation in production scale, market access, and scheme awareness.

A total of 120 ragi processing units were randomly selected from official District Industries Centre records and PM-FME beneficiary lists. The units were classified into small (<10 tonnes), medium (10-25 tonnes), large (25-50 tonnes), and very large (>50 tonnes) categories to facilitate comparative analysis. In addition, key stakeholders including PM-FME officers/cluster coordinators, traders/wholesalers, and retailers/local buyers were included to assess scheme implementation and market linkages.

The study is based on both primary and secondary data. Primary data were collected through structured interviews from processing unit owners covering socio-economic characteristics, production, income, scheme awareness, adoption, and constraints. Secondary data were obtained from government reports, PM-FME guidelines, District Industries Centres, agriculture departments, and published literature. The study period covered the agricultural years 2024-2026.

Analytical Techniques Employed

The following statistical tools were used:

Percentage Analysis Formula

Where

• f = number of respondents in a category

• N = total sample size (120 units)

How it was calculated

Percentage was used to measure:

• Level of PM-FME awareness • Adoption of scheme benefits • Distribution of unit categories (small/medium/large) • Marketing channel usage Each response category (for example "aware" or "not aware") was divided by total respondents (120) and multiplied by 100 to obtain percentage distribution.

Arithmetic Mean (Average Calculation) Formula

Cost and Return Analysis

Used to evaluate economic performance of ragi processing units.

(i) Total Cost (TC) TC = Fixed Cost + Variable Cost

Variables and Factors Considered

The study considers several independent variables such as the age of the entrepreneur, education level, experience in processing, unit size, and access to the PM-FME scheme, which may influence the performance of the enterprises. The dependent variables include production output, income, profitability, and the level of scheme utilization, as these outcomes reflect the effectiveness and impact of the scheme on small food processing units.

Measurement Standards • All economic variables expressed in INR (₹)

• Production in kg/tonnes • Time in years/months • All statistical procedures followed SI units and standard econometric practices (IUPAC guidelines)

Results and Discussion

The present chapter presents the results and discussion of the study on the effectiveness of the PM-FME scheme on ragi processing units in Andhra Pradesh. Data were collected from 120 ragi processing units across Anantapur and Kurnool districts. The results are organized based on socio-economic profile, scheme awareness, utilization, impact, and constraints. Interpretation: Most respondents are middle-aged, moderately educated, and operate small to medium-scale units, indicating the dominance of micro and small enterprises in ragi processing. Interpretation: Family labour plays a major role in reducing labour cost and supporting small-scale processing activities. Interpretation: Market linkage is the most critical constraint, followed by high capital cost and delayed financial assistance.

Conclusion

The findings of the study indicate that government support to small food processing enterprises has contributed to improved production efficiency, income generation, and adoption of modern processing practices in ragi processing units. The intervention has strengthened rural entrepreneurship and enhanced the overall value chain of millet-based products in the region. However, the extent of benefits varies depending on access to resources, awareness, and timely support. Further improvements in market access, skill development, and infrastructure are necessary to achieve sustained growth. The results highlight the potential of such initiatives in promoting agricultural processing, though careful implementation is essential for wider impact.

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