Question

Write notes on:

(a) Minimum support price

(b) Buffer stock

(c) Issue price

(d) Fair price shops

Answer 1

(a) Minimum Support Price (MSP) – This is the pre-announced price at which the government purchases foodgrains particularly, wheat and rice from the farmer in order to crate a buffer stock. This price is announced by the government every year before the sowing season to give incentive to the farmers to raise the production of the desired crop. The rising MSPs have raised the maintenance cost of procuring food grains by the government as well as induced farmers to divert land from production of coarse grains to the production of these crops

(b) Buffer Stock – It is the stock of food grains particularly, wheat and rice which the government procures through the Food Corporation of India (FCI). The FCI purchases these cereals directly from the farmers of those states where they are in surplus. The price of these commodities is much before the actual sowing season of these crops. The food grains thus purchased by the FCI are kept in big granaries and are called Buffer Stock. Maintaining buffer stock is a step taken by the government in order to ensure food security in the country.

c) Issue Price – In order to help the poor strata of the society, the government provides them food grains from the buffer stock at a price much lower than the market price. This subsidized price is known as the Issue Price

(d) Fair Price Shops – The foodgrains procured by the government through FCI is distributed to the poor section of the society through ration shops. The Ration Shops are called Fair Price Shops because food grains are supplied to the poor through these shops at much reasonable and a fair price than the market price which is often high. Any family with a ration card can purchase stipulated amount of food grains, sugar, kerosene etc. every month from the nearby fair price shop.

Answer 2

(a) Minimum Support Price:

(i) The Food Corporation of India (FCI) purchases wheat and rice from the farmers in states where there is surplus production.

(ii) The farmers are paid pre-announced price for their crops. This price is called Minimum Support Price (MSP).

(iii) The MSP is declared by the government every year before the sowing season to provide incentives to the farmers for raising production of these crops.   

(b) Buffer Stock:

(i) Buffer stock is the stock of foodgrains namely wheat and rice procured by the government through Food Corporation of India (FCI).

(ii) The FCI purchases wheat and rice from the farmers in states where there is surplus production and stores this grain in the granaries as butter stock.

(iii) This is done to distribute foodgrains in the deficit areas and among the poor strata of society when there is shortage of foodgrains because of crop failure due to natural calamities.   

(c) Issue Price:

(i) The FCI purchases foodgrains from the farmers in states with surplus food production and stores it in granaries.

(ii) This is done to distribute foodgrains in the deficit areas and among the poor state of society at a price lower than the market price which is also known as issue price.                       

(d) Fair Price Shops:

(i) The food procured by the FCI is distributed through government regulated ration shops among the poorer sections of the society. This is called Public Distribution System (PDS). 

(ii) Ration shops are now present in most localities villages, towns and cities.

(iii) Ration shops are also known as fair price shops.

(iv) These fair price shops keep stocks of foodgrains, sugar and kerosene oil. Here these items are sold at a price lower than the market price.