Question

Write notes on:
(a) Minimum support price
(b) Buffer stock
(c) Issue price
(d) Fair price shops

Answer 1

(a) Minimum Support Price: The Food Corporation of India (FCI) purchases wheat and rice from the farmers in states where there is surplus production. The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price (MSP). The MSP is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops.
(ii) Buffer Stock: Buffer stock is the stock of foodgrains, namely wheat and rice procured by the government through Food Corporation of India (FCI). This buffer stock is created in order to distribute foodgrains in the deficit areas and among the poorer strata of society at a price lower than the market price.
(c) Issue Price: The foodgrains stored in granaries are distributed in the deficit areas and among the poorer strata of society at a price lower than the market price known as issue price.
(d) Fair Price Shops: Fair price shops are ration shops that keep stock of foodgrains, sugar, kerosene oil for cooking. These items are sold to people at a price lower than market price These are government sponsored shops.