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

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Q: 82 (CAPF/2021)
The price declared by the Government every year before the sowing season to provide incentives to the farmers is called

question_subject: 

Economics

question_exam: 

CAPF

stats: 

0,69,6,0,5,69,1

The correct answer is option 3, minimum support price.

Buffer price, option 1, is not the correct answer. Buffer price refers to the price at which the government buys crops in order to maintain a stockpile or buffer. This is done to stabilize prices and prevent any sudden increases or decreases in the market.

Option 2, issue price, is also incorrect. Issue price is the price at which shares or bonds are offered to the public for the first time during an initial public offering (IPO) or bond issuance.

Option 4, fair sustenance price, is not the correct answer either. While the concept of fair sustenance price is similar to minimum support price, it is not the term used to describe the price declared by the government before the sowing season.

The correct answer, minimum support price (MSP), is the price announced by the government before the sowing season to provide incentives to farmers. It is the minimum price at which the government guarantees to purchase the crops from farmers, even if the market price falls below this level. The purpose of MSP is to ensure price stability, protect farmers from price fluctuations, and incentivize them to produce more.