Price Stabilization Fund

Context: 

The Government has initiated the procurement of tomatoes under the Price Stabilization Fund to address the increase in tomato prices.

Key Points:

• The Department of Consumer Affairs monitors daily prices of 22 essential food commodities, including tomatoes.
• To address the increase in tomato prices and provide affordable options to consumers, the government has initiated tomato procurement under the Price Stabilization Fund.
• The National Cooperative Consumers Federation (NCCF) and National Agricultural Cooperative Marketing Federation (NAFED) are actively procuring tomatoes from mandis in Andhra Pradesh, Karnataka, and Maharashtra.
• The procured tomatoes are being sold at affordable prices in major consuming centers like Delhi-NCR, Bihar, Rajasthan, etc., after subsidizing the price for consumers.

About Price Stabilization Fund (PSF):

• Establishment: It was established during the 2014-15 period under the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW).
  • It was transferred from DAC&FW to the Department of Consumer Affairs (DOCA) on 1st April 2016.
• Purpose: To regulate the price volatility of important agri-horticultural commodities like onions, potatoes, and pulses.
• Buffer Stock Creation and Release:
  • The PSF creates a strategic buffer stock of the specified commodities.
  • This buffer stock is utilized for subsequent calibrated release in the market to moderate price volatility.

Other initiatives by the Government to stabilize prices:

• Market Intervention Scheme (MIS): 
  • To protect farmers from distress sale during bumper crop periods when prices fall below economic levels, the Department of Agriculture & Farmers Welfare (DAFW) implements the Market Intervention Scheme (MIS). 
  • Under the scheme, the loss on account of the fall in price is borne between the Central Government and State Government on a 50:50 basis.
• Operation Greens: 
  • Implemented by the Ministry of Food Processing Industries, it aims to enhance value addition and reduce post-harvest losses of agri-horticultural commodities, including tomatoes. 
  • The scheme includes both short-term and long term interventions 
    • Short Term: Transportation and storage subsidies for various stakeholders.
    • Long Term: Grants-in-aid for Integrated Value Chain Development Projects and Stand-alone Post-Harvest Infrastructure Projects.
  • Objectives:
    • Enhancing value realization of produce for farmers; 
    • Protect the growers from making distress sale; 
    • Increase in food processing/preservation capacities and value addition; and 
    • Reduction in post-harvest losses.

News Source: PIB

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