The fund was established with to mitigate volatility in the prices of agriculture produce. It was established with a corpus of 500 Crore which aims at price stability. The fund will be utilised for following purpose:
- Direct purchase from farmers at farm gate
- Maintaining a strategic buffer stock that would discouraged hoarding and unscrupulous speculation.
- To safeguard the interest of consumers by supplying such commodities at reasonable prices.
- To support market intervention for price control of perishable agri- horticultural commodities.
- The state will have to set up a revolving fund to which centre and state will contribute equally. The same ratio will be 75:25 in North eastern states.
