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Public Distribution Systems and Buffer Stock

While buying ...

Question

While buying foodgrains from the farmers, the government of India offers which of the following?

A

Maximum support price

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B

Minimum support price

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C

Marginal support price

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D

Market support price

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Solution

The correct option is B Minimum support price
Every year, the Food Corporation of India purchases foodgrains from farmers directly at a fixed price. The fixed price is called the minimum support price or MSP. This rate is to safeguard the farmer from price volatility in the open market.

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