PRICE STABILIZATION SCHEME

Subject: Economy

Concept:

The scheme provides for maintaining a strategic buffer of commodities for subsequent calibrated release to moderate price volatility and discourage hoarding and unscrupulous speculation.
For building such stock, the scheme promotes direct purchase from farmers/farmers’ association at farm gate/Mandi.
The PSF is utilized for granting interest free advance of working capital to Central Agencies, State/UT Governments/Agencies to undertake market intervention operations.
Apart from domestic procurement from farmers/wholesale mandis, import may also be undertaken with support from the Fund.
Fund will be maintained in a Central Corpus Fund account to be opened by Small Farmers Agri-Business Consortium (SFAC), which will act as Fund Manager.

Funding

It is a Central Sector Scheme.
The States will have to set up a revolving fund to which Centre and State will contribute equally (50:50).
The Ratio will be 75:25 in North East states.

Commission for Agricultural Costs and Prices (CACP)

CACP is an expert body which recommend minimum support prices (MSPs) to Government (CCEA) by taking into account cost of production, trends in domestic and international prices.
It is a statutory panel under the Ministry of Agriculture
It makes the recommendations for MSPs for 23 kharif and rabi crops.
Currently, CCEA comprises Chairman, Member Secretary, one Member (Official) and two Members (Non-Official).
The non-official members are representatives from farming community and usually have active association with farming community.
Its suggestions are not binding on the government.