Why did early state-led food-processing ventures in India fail? What lessons do they hold for present-day schemes such as PM Formalisation of Micro Food Processing Enterprises (PMFME) and Pradhan Mantri Kisan Sampada Yojana (PMKSY)?

In 1926, a costly state-funded jam factory in the Madras Presidency was wound up after standing "under padlock" for a long time. Its machinery was split up and its building handed to the Sub-Collector [1]. Such ventures failed less for lack of money than for weak links to raw material, markets and scale. Those same links decide whether PMFME and PMKSY succeed.

Why early state-led ventures failed

• Output did not match demand: about 7,000 lbs of jam was still unsold when the factory was wound up [1].
• Slow decisions on idle assets: the plant lay idle for years before any decision, a sign of weak accountability for public money [1].
• Built too big: Mega Food Parks (2008) needed at least 50 acres, which kept small preservation units out. Only 10 of 42 approved parks were running by March 2018 [2].
• Weak support system: banks were slow to lend, states were slow to clear roads, power and water, units got no special incentives, and private co-promoters held back their share [2].
• No chain before the factory: India had 249 pack-houses against a need of 70,080 (2014), and only about 15% of the refrigerated trucks it needed [2]. Fruit rotted before it reached any plant.

Lessons for PMFME and PMKSY

• Stay small and close to the farm: the Standing Committee on Agriculture asked for agro-processing clusters near production areas [2]. PMFME follows this by supporting existing micro units and self-help groups (SHGs) [4].
• Markets before machinery: with PMFME's help on credit, branding and marketing, beneficiaries' average turnover rose about 1.7 times. Over 85% of credit-linked subsidy users reported better market links [4].
• Build the cold chain first: fruit losses are still 6.02–15.05% (NABCONS, 2022), almost the same as in 2015 [3]. PMKSY's cold-chain and Operation Greens components should put pack-houses and refrigerated trucks first.
• Check results independently: PMFME's gains are self-reported [4]. Third-party audits should measure whether less produce is wasted, not just turnover.
• Centre–state coordination: time-bound clearances and assured credit can stop parks from stalling [2].

The padlocked jam factory and the stalled mega parks teach the same lesson: a processing unit works only when it is tied into a supply chain and a market. A decentralised, cluster-based, cold-chain-first approach under PMFME and PMKSY, backed by independent checks of results, can cut post-harvest losses and raise farm incomes. That would also advance SDG target 12.3 on reducing food loss.