Write notes on:
(a) Minimum support price
(b) Buffer stock
(c) Issue price
(d) Fair price shops
Answers
(a) Minimum support price – The Food Corporation of India 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. Before the sowing season every year, the government announces the MSP, and the purchased food grains are stored in granaries.
(b) Buffer stock – Buffer stock is the stock of food grains, mainly wheat and rice, procured by the Government through the Food Corporation of India. This buffer stock is used by the government in case of any calamity or disaster or for the poorer section of the society.
(c) Issue price – Food is kept in stocks in the form of the buffer stock to distribute foodgrains in the deficit areas and among the poorer strata of the society at a price lower than the market. This price is also known as Issue Price.
(d) Fair price shops – Ration shops also, known as Fair Price Shops, keep stock of foodgrains, sugar, and kerosene for cooking. These items are sold to people at a price lower than the market price. Any family with a ration card can buy a stipulated amount of these items every month from the nearby ration shop.
Answer:
(a) Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops. Minimum Support Price is an important part of India's agricultural price policy. The MSP helps to incentivize the framers and thus ensures adequate food grains production in the country.
(b) A buffer stock is a system or scheme which buys and stores stocks at times of good harvests to prevent prices falling below a target range (or price level), and releases stocks during bad harvests to prevent prices rising above a target range (or price level).
(c) Issue Price: When food grains are distributed in the deficit areas and among the poorer strata of the society at a price lower than the market price is known as Issue Price.
(d) The ration shops are called the fair price shops, as the government of India provide people with essential food items at a very low cost. The prices of goods at the fair price shops are lower than the grocery or the local shops. The aim of the fair price shops is to provide goods to the weaker section at a lower price.
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