Government unveils draft norms to operate Price Stabilisation Fund

NEW DELHI: The Agriculture Ministry has come out with draft guidelines of the " Price Stabilisation Fund" to be made operationalised this fiscal for procurement and distribution of potato and onion.

The Price Stabilisation Fund (PSF), with a corpus of Rs 500 crore, aims to check price volatility through procurement of selected perishable horticulture produce, maintenance of buffer stocks and regulated release into the market.

"To begin with, interventions would be supported for onions and potato only. However, other commodities may be added later," according to the draft operational guidelines of PSF.

PSF will be implemented during 2014-15 to 2016-17. The Fund may be allowed to roll on to future years also, it added.

According to the draft norms, a corpus of Rs 500 crore would be created for providing interest-free working capital to eligible agencies to enable procurement of horticulture produce. To begin with, it will be used for onion and potato.

The corpus would be kept in a separate savings bank account to be opened and maintained by the government's Small Farmers Agri-Business Consortium (SFAC).

Losses if any, incurred by central agencies, on account of interventions under this scheme, will be met from this fund.

However, losses incurred by state governments or agencies will be met to the extent of 50 per cent only.

Similarly, profits earned on interventions will plough back into the fund to the extent of 100 per cent in case of central government agencies and 50 per cent in case of state government agencies.

"No diversion of either the corpus fund or the interest accrued thereon is permitted. The accounts of the Fund will be subject to audit by CAG," the guidelines said.

The administrative, monitoring and other expenses would be limited to one per cent of the advances made in a year, duly approved by seven-member Price Stabilisation Fund Management Committee (PSFMC).

"PSFMC will invite, appraise and approve proposals received from agencies. It will approve the amount and period of advance and also lay down the schedule for repayment," it added.