The proposed ₹500 crore price stabilisation fund (PSF) to protect farmers from distress sale of select horticulture commodities such as onion and potato is likely to be made operational soon.

The Ministry of Agriculture has come out with draft operational guidelines for the proposed PSF and has invited comments from the State Governments and other agencies on the same by February 2.

The PSF scheme would be implemented during 2014-15 to 2016-17.

Finance Minister Arun Jaitley had announced the creation of a PSF in Budget 2014-15 to mitigate the hardships faced by the farmers due to volatile prices.

The proposed intervention is expected to regulate price volatility through procurement by Central/State Governments and agencies of select produce, maintenance of buffer stocks and regulated release into the market.

The PSF would also to protect consumers from abnormal price rise through calibrated supplies and distribution of such commodities.

Draft norms According to the draft norms, a price stabilisation fund management committee, under the chairmanship of Agriculture Secretary, will manage the fund.

Losses incurred by the Central agencies on account of interventions under the scheme will be met from the fund, while profits earned would be ploughed back fully.

In case of State agencies, the losses will be partially (50 per cent) met from the fund, while profits to an extent of 50 per cent would be ploughed back into the fund.

Though the scheme would be implemented till 2016-17 starting this financial year, the fund may be allowed to roll on to the future years also.

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