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Q33 (IAS/2001) Economy › Agriculture & Rural Economy › Agricultural price policy Answer Verified

The prices at which the Government purchases food grains for maintaining the public distribution system and for building up buffer-stocks is known as

Result
Your answer: —  Â·  Correct: B
Explanation

The correct answer is Option 2: procurement prices.

Procurement price refers to the rate at which the government, through agencies like the Food Corporation of India (FCI), actually purchases food grains from farmers to maintain the Public Distribution System (PDS) and build buffer stocks. Historically, while Minimum Support Price (MSP) was announced before sowing to provide a floor price, procurement prices were announced at the onset of the harvest season and were generally higher than MSP.

  • Option 1: MSP is a guarantee against a price crash, announced before sowing; however, the actual act of buying for PDS is defined as procurement.
  • Option 3: Issue price is the rate at which the government sells food grains to consumers through fair-price shops under PDS.
  • Option 4: Ceiling prices are the maximum legal limits set by the government to prevent prices from rising too high.

Since the 1970s, MSP and procurement prices have effectively merged in practice, but technically, the price for PDS stock building remains the procurement price.

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SIMILAR QUESTIONS

IAS · 2004 · Q77 Relevance score: 1.07

Consider the following statements: 1. Regarding the procurement of food grains, Government of India follows a procurement target rather than an open-ended procurement policy. 2. Government of India announces minimum support prices only for cereals. 3. For distribution under Targeted Public Distribution System (TPDS), wheat and rice are issued by the Government of India at uniform Central issue prices to the States/ Union Territories. Which of the statements given above is/ are correct?

CAPF · 2014 · Q29 Relevance score: -0.15

Which of the statements given below is/ are correct ? 1. For the marketing year 2014-2015, the minimum support price (MSP) for wheat in India has been fixed at Rs. 1,400 / quintal 2. MSP is the rate at which the government sells the grains through the fair price shops Select the correct answer using the code given below : .

IAS · 2019 · Q79 Relevance score: -0.67

The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

CAPF · 2021 · Q82 Relevance score: -1.33

The price declared by the Government every year before the sowing season to provide incentives to the farmers is called

IAS · 2009 · Q141 Relevance score: -1.59

Consider the following statements : 1. The Commission for Agricultural Costs and Prices recommends the Minimum Support Prices for 32 crops. 2. The Union Ministry of Consumer Affairs, Food and Public Distribution has launched the National Food Security Mission. Which of the statements given above is/are correct ?