Question

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

Answer 1

Minimum Support Price

• Minimum Support Price (MSP) is the term used to describe the pre announced price that is paid to the farmers.

• When the FCI purchases the foodgrains from the farmers with surplus production, they are paid a pre announced price.
• To give incentives to the farmers to raise crop production, the Government declares the Minimum Support Price (MSP) before the beginning of the sowing season.

Buffer stock

• The stock of foodgrains acquired through the Food Corporation of India (FCI) by the Government is known as buffer stock. Mainly rice and wheat are procured.
• Granaries are used to store the food grains that are purchased.
• Buffer stocks help in solving the problem of food shortage during calamity and when weather conditions are adverse.

Issue Price

• Government uses this buffer stock to distribute the food grains to poorer sections of the society at lower than the market price which is also known as the issue price.

Fair Price Shops

• To distribute the food grains among the poorer section of the society, the Government uses the Government regulated ration shops.
• Fair price shop is the other name for a ration shop.
• Examples of items stored in ration shops are kerosene used for cooking, sugar, and food grains.
• Items from the ration shops are sold at a price lesser than the market price.
• Most of the cities, towns, villages and localities have ration shops.