The Price Stabilization Fund (PSF) was set up in 2014-15 under the Department of Agriculture, Cooperation & Famers Welfare (DAC&FW).
The PSF scheme was later transferred from DAC&FW to the Department of Consumer Affairs (DOCA) in 2016.
The fund is to help regulate the price volatility of important agri-horticultural commodities like onion, and potatoes. Pulses were also added subsequently.
The scheme provides for maintaining a strategic buffer of aforementioned commodities for subsequent calibrated release to moderate price volatility and discourages 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.
The agricultural ministry has recently proposed to include Milk in the PSF which is not yet confirmed.