In order to support market interventions for price control of perishable agri-horticultural commodities during 2014-15, 2015-16 and 2016-17, the Department of Agriculture & Cooperation, Ministry of Agriculture, has approved the Price Stabilisation Fund (PSF) as a Central Sector Scheme, with a corpus of Rs 500 crores. PSF will be used to advance interest free loan to State Governments, Union Territories and Central agencies to support their working capital and other expenses on procurement and distribution interventions for such commodities. Initially the fund is proposed to be used for onion and potato only.
The Price Stabilization Fund will be managed centrally by a Price Stabilisation Fund Management Committee (PSFMC) which will approve all proposals from State Governments and Central Agencies. The PSF will be maintained in a Central Corpus Fund account to be opened by Small Farmers Agri-Business Consortium (SFAC), which will act as Fund Manager. Funds from this Central Corpus will be released in two streams, one to the State Governments and UTs as a one time advance and the other to the Central Agencies. The Central Corpus Fund has already been established by SFAC in 2014-15.
The one time advance to the States and UTs based on their first proposal will form a revolving fund, which can then be used for all future market interventions to control prices of onions and potatoes based on approvals by State level Committee set up explicitly for this purpose. In case of North Eastern States, the State level corpus will comprise of 75 percent funds from Centre and 25 percent from the State. While the advance is returnable, the Central Government will share 50 percent of losses, 75 percent in case of NE states.
Procurement of these commodities will be undertaken directly from farmers or farmers’ organisations and made available at a more reasonable price to the consumers.
This information was given by the Minister of State for Agriculture Mohanbhai Kundaria in Lok Sabha.