Q63. Which of the following factors/policies have affected the price of rice in India in the recent past?
- Minimum Support Price
- Government’s trading
- Government’s stockpiling
- Consumer subsidies
Select the correct answer using the code given below:
(a) 1, 2 and 4 only
(b) 1, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Answer: D
- Statement 1 is correct: Minimum Support Price (MSP) is the price at which the government purchases crops from the farmers. MSP increases the overall price of rice in the market as the traders have to buy near MSP value otherwise farmers have the option to sell to government-appointed agencies at MSP.
- Statement 2 is correct: The government in India typically buys more than a third of the country’s rice output at a fixed price, which has a direct impact on the price of rice.
- Statement 3 is correct: The government’s stockpiling is done to offload the stock when market prices soar, providing cheap rice to consumers and stocking when prices fall ensuring remunerative prices to farmers
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