Handling of wasted food product is a challenging task in municipal solid waste management. Dumping fast degradable material to landfills generates greenhouse gases as well as foul smell. Such biodegradable waste can be processed scientifically to obtain useful products. By utilizing these wastes in an anaerobic digester, biogas rich with methane gas (upto 60%) is generated and the residue slurry is used as organic fertilizer. It is the best means to deal with food/organic waste in rural as well as urban areas. Performance analysis of anaerobic digesters is reported in the literature since last few decades. Bio digestion involves slow chemical reactions. It is well reported in literature that high retention time makes this system less attractive. Additional iron content in the digestion process increases the production rate as it helps in reducing CO2 to form CH4. Increase in methane quantity increases the quality of biogas. Since pure iron may generate toxic free radicals in the system additional iron oxides powders are used. Generally nanoparticles catalyzes better than its bulk analogs. Bio degradable iron oxide nanoparticles produced by polyol method is added to the digester to enhance the rate of production.