The Union Agriculture Ministry recently approved the setting up of a price stabilisation fund (PSF) that was announced by Finance Minister in his July 2014 budget.
- The fund, with a corpus of Rs. 500 crore, will be used to support market interventions for managing prices of perishable agri-horticultural commodities.
- Initially, the fund is proposed to be used for onion and potato only. Losses incurred, if any, in the operations will be shared between the Centre and the States.
- The fund will be used to advance interest-free loans to State governments and Central agencies to support their working capital and other expenses on procurement and distribution interventions for such commodities.
- These commodities will be procured directly from farmers or farmers’ organisations right at the farm gate or mandi levels and be made available at reasonable prices to consumers.
- For this purpose, the States will set up a revolving fund to which the Centre and State will contribute equally. The ratio of Centre-State contribution to the State-level corpus in respect of northeast States will, however, be 75:25.
- The revolving fund is being mooted so that requirements for all future interventions can be decided and met at the State level itself. The Central agencies will, however, set up their revolving fund entirely with
advance from the Centre.
Sources: The Hindu.