FAQs

Who can become a member under PSF Scheme?

A small farmer growing tea/coffee/ rubber/tobacco is eligible to become a member of the PSF Scheme.

Who is a small farmer?

Under the PSF Scheme, a farmer with an operational holding of 4Ha or less is a small farmer.

Is there any difference between small and marginal farmers?

No. Under PSF Scheme, all farmers with operational holding of 4 Ha or less, are benefited at the same rate.

What is an operational holding?

Operational holding refers to the actual area of the farmer under tea/ coffee/rubber/tobacco. For example, a farmer in Guntur may have a total land holding of 10 Ha, but he grows tobacco on 4 Ha or less. He is eligible to benefit under the PSF Scheme.

A small grower of Tea / Coffee / Rubber/Tobacco can join the scheme by submitting an Application in Form I.
Form I available with the concerned commodity board.

Are only growers registered with the Commodity Boards eligible under the PSF Scheme?

No. Any grower who is growing tea/coffee/rubber/tobacco and having land holding of 4 Ha or less is eligible to become member.

An eligible grower is required to deposit a non- refundable amount of Rs.500/- as membership fee through a Bank draft drawn in favour of the concerned Commodity Board.

Where and how to open SB A/c?

An eligible grower can open a PSF Savings Bank Account in any of the service area branches of a public sector bank/RRB/ Cooperative Bank by submitting an application in Form PSF- B available with the Commodity Board. The grower is required to submit two photographs and also affix his/her signatures at the given place and submit it to the Commodity Board along with the membership form. The Board, after enrolling the grower as member of the scheme will certify form PSF-B and forward the same to the concerned bank branch for opening of a PSF A/c in the name of the grower.

How is PSF SB A/C different from a normal SB A/C ?

In a normal Savings bank A/C, frequent transactions (deposits and withdrawals )during a year are permitted . However, in a PSF SB A/C, there would be a maximum number of only two transactions in a year.

When to deposit the initial amount for opening of PSF SB A/c?

A grower can open a PSF SB A/c with an initial deposit of Rs.100/- with the bank branch, where he has opted to maintain his account. The amount is to be deposited with the bank branch after the form PSF-B submitted to the Commodity Board, is forwarded to the Bank branch by the Board, duly certified. The concerned bank branch would issue a pass book to each member.

What is the rate of interest payable by the bank on the SB account?

As per RBI instructions, the present rate of interest payable on SB accounts is 3.5%.

How to withdraw and what is the maximum permissible withdrawal from the Account?

A grower is not permitted to withdraw any amount during the normal and boom years. During the distress years, Commodity Boards , on receipt of Government’s contribution from the PSF Trust, will deposit a sum of Rs.1000/- in the PSF savings bank account of each member. On receipt of advice from the commodity board, members would be permitted to withdraw up to Rs.1000/- from the PSF Savings Bank Account only in distress years. However, at the close of the scheme period, i.e. after 10 years, a grower can withdraw the entire amount of balance at his credit, including Government’s contribution and the interest earnings

The total Corpus is of Rs.500 crores of which Govt. would contribute Rs.482.88 crores and Rs.17.12 crores – non-refundable initial contribution by the participating growers. Corpus of the fund would remain undisturbed and the interest earnings of the fund only will be utilized for operationalising the scheme

As per the approval of the Government, the present scheme will be of 10 years period with effect from April 2003.

How would the Scheme be operated?

The scheme would be operated by the PSF Trust formed by the Govt. and NABARD. The concerned Commodity Board is responsible for implementation of the Scheme at the field level.

Yes. Each Commodity Board has prescribed the procedure for verification of eligibility of the applicant. The extension official of the Commodity Board must satisfy himself about the bonafides of the grower and ensure that he/she is growing tea/coffee/rubber/tobacco.
Certificate about the genuineness of grower issued by the concerned Union/ Association, any rent/penalty receipt issued by the Revenue Authorities may also be taken into account as the proof towards land holding.

Price Spectrum Band of +/- 20% from the seven year moving average of international prices to be fixed by the Government would be announced each year. For example, Price Band for 2003 would be estimated in the following basis:
For each commodity, annual average International Price for seven calendar years from 1997-2003 will be used to calculate the moving average price. (+) 20% of this moving average will constitute the Upper Band and (-) 20% will constitute the Lower Band of the Price Band for 2003. The annual average Domestic Price of the commodity for 2003 will be compared with the Price Band to categorise the Year as Boom/Normal and Distress Year.

The Price Band would be announced in March 31 each year.

When the prices fall below the lower bound of the band, the PSF Trust contributes Rs.1000/- to the PSF SB A/c of each member
When the prices remain within the band, the PSF Trust contributes Rs.500/- to the PSF SB A/c of the member and the member also contributes Rs.500/- to his own PSF SB A/c.
When the prices exceed the upper level of the band, only the member contributes Rs.1000/- to his PSF
SB Account.

A member grower would be permitted to withdraw up to Rs.1000/- from the PSF Savings Bank Account only in distress year i.e.during the years when the prices fall below the lower bound of the band. Banks would receive appropriate instructions from PSF Trust, through Commodity Boards, every year regarding deposit and withdrawal. At the end of the ten year period, the balance outstanding can be withdrawn by the grower including the government’s contribution and the interest earnings.

A grower is required to pay his contribution by April 30 every year and Govt. would contribute by May 31 every year.

Why are the growers required to pay the membership fee?

It is a participatory Scheme between growers and the Government of India. The enrolment fee would form part of the PSF Corpus Fund of Rs. 500 crores created by the Government.

Will a grower be treated as defaulter in case of sale of assets/ replanting of the crop?

No in such cases a grower will not be treated as a defaulter and would be allowed to withdraw the entire balance outstanding at his credit, including governments contribution and interest earnings.

Who will monitor and implement the Scheme?

The scheme is being implemented through a Chief Executive Officer in coordination with the HPC, Commodity Boards and NABARD. The scheme will be monitored by High Powered Committee comprising officials of Department of Commerce, Ministry of Finance, NABARD, Commodity Experts.

Question	Answer
ELIGIBILITY
Who can become a member under PSF Scheme?	A small farmer growing tea/coffee/ rubber/tobacco is eligible to become a member of the PSF Scheme.
Who is a small farmer?	Under the PSF Scheme, a farmer with an operational holding of 4Ha or less is a small farmer.
Is there any difference between small and marginal farmers?	No. Under PSF Scheme, all farmers with operational holding of 4 Ha or less, are benefited at the same rate.
What is an operational holding?	Operational holding refers to the actual area of the farmer under tea/ coffee/rubber/tobacco. For example, a farmer in Guntur may have a total land holding of 10 Ha, but he grows tobacco on 4 Ha or less. He is eligible to benefit under the PSF Scheme.
How to join the scheme?	A small grower of Tea / Coffee / Rubber/Tobacco can join the scheme by submitting an Application in Form I. Form I available with the concerned commodity board.
Are only growers registered with the Commodity Boards eligible under the PSF Scheme?	No. Any grower who is growing tea/coffee/rubber/tobacco and having land holding of 4 Ha or less is eligible to become member.
What is the membership fee?	An eligible grower is required to deposit a non- refundable amount of Rs.500/- as membership fee through a Bank draft drawn in favour of the concerned Commodity Board.
BANK ACCOUNT
Where and how to open SB A/c?	An eligible grower can open a PSF Savings Bank Account in any of the service area branches of a public sector bank/RRB/ Cooperative Bank by submitting an application in Form PSF- B available with the Commodity Board. The grower is required to submit two photographs and also affix his/her signatures at the given place and submit it to the Commodity Board along with the membership form. The Board, after enrolling the grower as member of the scheme will certify form PSF-B and forward the same to the concerned bank branch for opening of a PSF A/c in the name of the grower.
How is PSF SB A/C different from a normal SB A/C ?	In a normal Savings bank A/C, frequent transactions (deposits and withdrawals )during a year are permitted . However, in a PSF SB A/C, there would be a maximum number of only two transactions in a year.
When to deposit the initial amount for opening of PSF SB A/c?	A grower can open a PSF SB A/c with an initial deposit of Rs.100/- with the bank branch, where he has opted to maintain his account. The amount is to be deposited with the bank branch after the form PSF-B submitted to the Commodity Board, is forwarded to the Bank branch by the Board, duly certified. The concerned bank branch would issue a pass book to each member.
What is the rate of interest payable by the bank on the SB account?	As per RBI instructions, the present rate of interest payable on SB accounts is 3.5%.
How to withdraw and what is the maximum permissible withdrawal from the Account?	A grower is not permitted to withdraw any amount during the normal and boom years. During the distress years, Commodity Boards , on receipt of Government’s contribution from the PSF Trust, will deposit a sum of Rs.1000/- in the PSF savings bank account of each member. On receipt of advice from the commodity board, members would be permitted to withdraw up to Rs.1000/- from the PSF Savings Bank Account only in distress years. However, at the close of the scheme period, i.e. after 10 years, a grower can withdraw the entire amount of balance at his credit, including Government’s contribution and the interest earnings
What is the total Corpus and who would fund it?.	The total Corpus is of Rs.500 crores of which Govt. would contribute Rs.482.88 crores and Rs.17.12 crores – non-refundable initial contribution by the participating growers. Corpus of the fund would remain undisturbed and the interest earnings of the fund only will be utilized for operationalising the scheme
What is the duration of the scheme?	As per the approval of the Government, the present scheme will be of 10 years period with effect from April 2003.
How would the Scheme be operated?	The scheme would be operated by the PSF Trust formed by the Govt. and NABARD. The concerned Commodity Board is responsible for implementation of the Scheme at the field level.
Can a grower without valid land title join the scheme?	Yes. Each Commodity Board has prescribed the procedure for verification of eligibility of the applicant. The extension official of the Commodity Board must satisfy himself about the bonafides of the grower and ensure that he/she is growing tea/coffee/rubber/tobacco. Certificate about the genuineness of grower issued by the concerned Union/ Association, any rent/penalty receipt issued by the Revenue Authorities may also be taken into account as the proof towards land holding.
How is the Price Band fixed?	Price Spectrum Band of +/- 20% from the seven year moving average of international prices to be fixed by the Government would be announced each year. For example, Price Band for 2003 would be estimated in the following basis: For each commodity, annual average International Price for seven calendar years from 1997-2003 will be used to calculate the moving average price. (+) 20% of this moving average will constitute the Upper Band and (-) 20% will constitute the Lower Band of the Price Band for 2003. The annual average Domestic Price of the commodity for 2003 will be compared with the Price Band to categorise the Year as Boom/Normal and Distress Year.
When would Price Band be announced?	The Price Band would be announced in March 31 each year.
How would a small grower be benefited?	When the prices fall below the lower bound of the band, the PSF Trust contributes Rs.1000/- to the PSF SB A/c of each member When the prices remain within the band, the PSF Trust contributes Rs.500/- to the PSF SB A/c of the member and the member also contributes Rs.500/- to his own PSF SB A/c. When the prices exceed the upper level of the band, only the member contributes Rs.1000/- to his PSF SB Account.
When can a grower withdraw the amount from his PSF A/c?	A member grower would be permitted to withdraw up to Rs.1000/- from the PSF Savings Bank Account only in distress year i.e.during the years when the prices fall below the lower bound of the band. Banks would receive appropriate instructions from PSF Trust, through Commodity Boards, every year regarding deposit and withdrawal. At the end of the ten year period, the balance outstanding can be withdrawn by the grower including the government’s contribution and the interest earnings.
When is the grower required to deposit his contribution and also the Government?	A grower is required to pay his contribution by April 30 every year and Govt. would contribute by May 31 every year.
Why are the growers required to pay the membership fee?	It is a participatory Scheme between growers and the Government of India. The enrolment fee would form part of the PSF Corpus Fund of Rs. 500 crores created by the Government.
Will a grower be treated as defaulter in case of sale of assets/ replanting of the crop?	No in such cases a grower will not be treated as a defaulter and would be allowed to withdraw the entire balance outstanding at his credit, including governments contribution and interest earnings.
Who will monitor and implement the Scheme?	The scheme is being implemented through a Chief Executive Officer in coordination with the HPC, Commodity Boards and NABARD. The scheme will be monitored by High Powered Committee comprising officials of Department of Commerce, Ministry of Finance, NABARD, Commodity Experts.