Civil Services Prep

Prelims 2020 · Agriculture · Question 73

Which of the following factors/policies were affecting the price of rice in India in the recent past?

  1. Minimum Support Price
  2. Government's trading
  3. Government's stockpiling
  4. Consumer subsidies.

Select the correct answer using the code given below:

  1. 1, 2 and 4 only
  2. 1, 3 and 4 only
  3. 2 and 3 only
  4. 1, 2, 3 and 4

Answer

1, 2, 3 and 4

1. Minimum Support Price — MSP for paddy sets a floor and influences market expectations and procurement prices; this affects rice prices. Verdict: Correct.

2. Government's trading — Government agencies sell rice through PDS/OMSS and other channels; such market intervention affects supply and price. Verdict: Correct.

3. Government's stockpiling — Buffer stocking/procurement withdraws grain from the open market, while release of stocks increases supply; both affect prices. Verdict: Correct.

4. Consumer subsidies — Subsidized rice under PDS/NFSA changes effective consumer demand and market dynamics, influencing rice prices. Verdict: Correct.

Hence, all four factors/policies affected rice prices in the recent past.

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