The Department of Agriculture & Cooperation has approved the Price Stabilisation Fund (PSF) as a Central Sector Scheme, with a corpus of Rs.500 crores, to support market interventions for price control of perishable agri-horticultural commodities. PSF will be used to advance interest free loan to State Governments and Central agencies to support their working capital and other expenses on procurement and distribution interventions for such commodities. For this purpose, the States will set up a revolving fund to which Centre and State will contribute equally (50:50). The ratio of Centre-State contribution to the State level corpus in respect of North East States will however be 75:25. The revolving fund is being mooted so that requirements for all future interventions can be decided and met with at the State level itself. Central Agencies will, however, set up their revolving fund entirely with the advance from the Centre. Procurement of these commodities will be undertaken directly from farmers or farmers' organizations at farm gate/mandi and made available at a more reasonable price to the consumers. 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.
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