Rs.
500 crore is the total corpus of the Price Stabilisation Fund
(PSF) for plantation crops – tea, coffee and rubber -- and the
agricultural crop – tobacco which has been set up by Government
of India in order to safeguard the interests of growers of these
commodities. The proposal to this effect was cleared by the
Cabinet Committee on Economic Affairs (CCEA) on Wednesday, marking
the operationalisation and implementation of this important
scheme from April 2003 onwards for a period of 10 years. The
decision is based on the proposal of Department of Commerce
for the implementation of the PSF scheme, which seeks to
bring about price stabilisation for each of these commodities
without resorting to procurement operations by Government agencies.
Intervention through this Fund means that when prices of these
commodities worsen, the participating growers will be compensated
by the Fund. In the boom years, the growers will contribute
a certain amount to the Fund.
To
begin with, the Scheme will cover about 3.42 lakh growers
who are the most needy having operational holdings of four hectares.
Commodity-wise break-up of the numbers of growers to be covered
is as follows: Rubber (1,97,461), coffee (71,949), tea (42,619)
and tobacco (30,317). The growers of these commodities are spread
across different States, namely, Kerala, Karnataka, Tamil Nadu,
Andhra Pradesh, West Bengal, Himachal Pradesh and the North
East. The significance of the scheme arises from the fact that
the scenario in the plantation sector for the last three years
has been extremely unfavourable for the growers of tea, coffee,
rubber and tobacco with the continuing decline in prices in
the domestic as well as international markets. Shri
Arun Jaitley, Minister of Commerce & Industry and Law &
Justice said today that with the implementation of this scheme,
the growers would be benefited during their distress. He observed
that the principal underlying the PSF is to set up a permanent
pool of resources which would be sustainable in the long run
in helping the growers, while noting that they had been facing
severe problems as prices of almost all agricultural commodities
witnessed a steep decline after experiencing a boom in the mid-1990s.
It may be recalled
that deeply concerned with the problems faced by the growers
of tea, coffee, rubber and tobacco and after examining the report
and various options recommended by the National Council for
Applied Economic Research (NCAER), the Department
of Commerce had proposed to establish the Price Stabilisation
fund in keeping with the government’s commitment to safeguard
the interests of growers of these commodities.
The Cabinet Committee on in its meeting
held on 11th June 2002 had given in principle approval
for the proposal of Department of Commerce for setting up of
a Price Stabilisation Fund of Rs. 500 crore and constituted
a 9-member Inter-Ministerial Committee headed by Shri L. V.
Sapthirishi, Additional Secretary, to work out the operational
modalities of the PSF Scheme. The Committee after extensive
interaction with the growers and the other segments of industry
and the concerned State Governments submitted its Report to
the Department of Commerce on November 30, 2002.
To facilitate administrative
back-up for implementation of this scheme by NABARD or a designated
bank under a Trust Fund, approval of the CCEA has also been
accorded to the appointment of Chief Executive Officer of the
Fund and the constitution of a high-powered committee under
the Department of Commerce for monitoring and operation of the
Fund. The details would be worked out in consultation with the
Ministry of Finance and Company Affairs.
Under this Scheme,
each participating grower would be required to make a non-refundable
initial contribution of Rs. 500 to the Fund and open a PSF account
with a Nationalised Bank. When prices fall below a certain level,
the Central Government will credit up to Rs. 1000 per grower
every year to the subscriber-grower’s account as a measure of
support in a distress situation. At the same time, when prices
rule above the upper levels of price spectrum band, the grower
will be required to contribute an amount of Rs. 1000 per annum
to his own account. When prices fall below a certain level the
grower will be permitted to withdraw an amount of Rs. 1000.
However, in a normal year i.e., when prices remain within a
price spectrum band, the grower subscribing to the scheme is
not allowed to withdraw any amount from the account.
