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Q16 (IAS/1995) Economy › Agriculture & Rural Economy › Agricultural price policy Answer Verified

Which of the following are the objectives of the Commission for Agricultural Costs and Prices (CACP) ? I. To stabilise agricultural prices. II. To ensure meaningful real income levels to the farmers. III. To protect the interest of the consumers by providing essential agricultural commodities at reasonable rates through public distribution system. IV. To ensure maximum price for the farmer. Select the correct answer from the codes given below :

Result
Your answer: —  ·  Correct: A
Explanation

The CACP’s mandate is to recommend price policy that gives farmers stable, remunerative prices and thereby provide them economic safety; this corresponds to stabilising agricultural prices (I) and ensuring meaningful real income levels for farmers (II) [1]. The Commission also balances farmers’ interests with consumer welfare — its recommendations consider implications for consumers and the government’s objective to keep essential commodities available at reasonable rates through the public distribution system (III) [1]. However, the CACP does not aim to secure a “maximum” price for farmers; it recommends a remunerative Minimum Support Price based on costs and market factors, not an unbounded maximum price (IV is incorrect) [3].

Sources

  1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > Objectives of MSP include: > p. 328
  2. [2] https://frontline.thehindu.com/farmers-struggle/who-will-pay-the-price/article64756328.ece
  3. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.15 Doubling Farmers' Income > p. 323
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