The Price Stabilisation Scheme for agro commodities may not exist for sometime now as the cabinet did not approve the modified and renovated scheme proposed by the ministry of Commerce.
Citing cash crunch, the ministry of finance has objected the new features proposed by commerce. The primary commodities covered under this scheme are tea, coffee, tobacco and rubber.
The old scheme launched in 2003 expired on March 2013 and then extended for six months till September 2013.
However the ministry decided to re-launch the scheme with modifications as in its original form, not many farmers opted for it. According to officials, the salient features of the original scheme lacked touch with real prices. Out of two million small farmers in all four plantations crops, only 26000 farmers opted for the scheme, said official sources.
In the new scheme, the government proposed to increase the relief to farmers to Rs 12,000 per hectare per grower at times of distress compared to Rs 1000 per hectare earlier . According to officials, the amount should at least help the farmer to continue with the plantations next year for which Rs 12,000 is a moderate amount.
Going by this estimate, the total allocation for a year works out to Rs 300 crore for one crop and total of Rs 1,250 crore if all crops fail in a single year which is a hypothetical, said an official source.
The new scheme called the Modified Price Stabilisation Fund (MPSF) scheme is to be extended to plantation sector covering tea, coffee, rubber, tobacco and cardamom. As per the new modified scheme, no compensation will be paid in a normal or boom year. Only during distress years, eligible member growers would be compensated to the tune of Rs 12,000 per hectare of operational landholding up to 10 hectares subject to a ceiling of Rs 60,000.
In case of consecutive distress years, the level of compensation would be enhanced by 15% of normal compensation. No claim bonus of Rs 12,000 per hectare subject to a ceiling of Rs 60,000 is payable if there is no distress in any of the five years of operation of the scheme
Besides, the scheme envisages an evaluation of the performance of the scheme by an independent agency in the fourth year and depending on the findings further extension of the scheme would be considered.
All the grower members of the scheme would be eligible to join the MPSF scheme without paying any entry fee. The respective commodity boards would certify the landholding details of the growers.
The Price Spectrum Band (PSB) would be determined on the basis of the preceding five years’ (including the price of the year under consideration) moving average of the international price of the commodity.
In its original form, the usual corpus is Rs 500 crores with 96% of government contribution and rest from growers. In distress year, grower is permitted to withdraw Rs 1,000 while in normal year of productivity of a certain crop, Rs 500 is deposited by the government and the grower each. In boom year, the grower deposits Rs 1,000 with no withdrawal.
