Prices of some of the horticulture commodities especially onion and potato are highly volatile. At the harvest time and soon thereafter, a steep fall in the wholesale and retail prices is normally observed. With depletion of the stored stocks, the prices tend to increase. This phenomenon is more apparent in the case of onions and potatoes. Price volatility affects consumers in a big way. Abnormal increase in price of these commodities affect the consumers by way of increase in food consumption budget. Wide price fluctuations also lead to speculation which further impact prices in retail market.
Price Stabilisation Fund is being created to mitigate hardships to consumers, for providing working capital and other incidental expenses for procurement and distribution of perishable agri-horticultural commodities.
To begin with, interventions would be supported for onions and potatoes only. However, other commodities may be added later.
- To promote direct purchase from farmers /farmers’ associations at farm gate/Mandi.
- To maintain a strategic buffer stock that would discourage hoarding and unscrupulous speculation.
- To protect consumers by supplying such commodities at reasonable prices through calibrated release of stock.
- Creation of Corpus fund and its Management by Price Stabilisation Fund Management Committee (PSFMC) and other Incidental Arrangements Relating to Funds.
Corpus Fund for Procurement and Distribution of Identified Agri-Horticultural Commodities:
A corpus of Rs. 500 cr. for providing interest free advance towards working capital to eligible proposals to enable procurement of perishable agri-horticulture produce. The fund shall be called “Corpus Fund for Procurement and Distribution of Identified Agri-Horticultural Commodities.
Corpus fund for procurement and distribution of perishable agri-horticultural commodities:
A separate savings bank account as “Corpus fund for procurement and distribution of perishable agri-horticultural commodities” shall be opened by Small Farmers Agri-Business Consortium (SFAC), which will act as Fund Manager, and the amount made available by the Government would be kept in this account. The account will be in a nationalised bank with flexi deposit facility.
Scheme will be implemented during 2015-16 to 2016-17. The Fund may be allowed to roll on to future years also.
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