The Department of Agriculture & Cooperation has approved the establishment of the Price Stabilisation Fund (PSF) as a Central Sector Scheme, with a budget of Rs. 500 crores.
Mission
During the fiscal years of 2014-15, 2015-16, and 2016-17, authorities implemented measures to intervene in the market with the aim of controlling prices of perishable agri-horticultural commodities.
Objectives
- Encourage direct purchasing from farmers or farmers associations at the farm gate or Mandi.
- Establish a strategic buffer stock to deter hoarding and speculative practices.
- Safeguard consumers by supplying essential commodities at fair prices through controlled release of stock.
Working
- The Price Stabilization Fund (PSF) will extend interest-free loans to State Governments/Union Territories and Central agencies to support their working capital and procurement expenses for commodities.
- Initially, the fund will focus on onion and potato interventions.
- The first-time advance to States/UTs, along with matching funds from them, will establish a revolving fund. This fund will cater to future market interventions for controlling onion and potato prices, subject to approval by State-level Committees.
- In the case of North Eastern States, the State-level corpus will comprise 75% funds from the Centre and 25% from the State.
- While the advance is repayable, the Central Government will share 50% of losses (75% for NE states) upon settlement of the advance by March 31, 2017.
- Any profits, if generated, will also be distributed in the same proportion.
- States can enlist Central Agencies to conduct operations on their behalf, funded from the State corpus.
- The Centre may also request Central Agencies like SFAC, NAFED, etc., to undertake price control operations for onion and potato.
Fund management
- The Price Stabilization Fund (PSF) Management Committee (PSFMC) will oversee the Price Stabilization Fund (PSF) and centrally manage and approve proposals from both State Governments and Central Agencies.
- SFAC (Small Farmers Agri-Business Consortium) will serve as the Fund Manager, responsible for maintaining the PSF in a Central Corpus Fund account.
- Commodities under the PSF will be sourced directly from farmers or farmers organizations at the farm gate or mandi.
- These commodities will then be made available to consumers at a more reasonable price, contributing to stabilizing market prices.
Read also: Open Market Sale Scheme (OMSS)
