Write notes on:(a) Minimum support price(b) Buffer stock(c) Is... - Economics

(a) Minimum Support Price (MSP):

• The MSP is the pre-announced price at which the government (through FCI) purchases food grains (wheat and rice) from farmers.

• The price is announced by the government every year before the sowing season.

• The main objective is to provide incentives to farmers for raising the production of these crops and to ensure they get a guaranteed price for their produce.

(b) Buffer Stock:

• Buffer stock is the stock of food grains (wheat and rice) procured by the government through the Food Corporation of India (FCI).

• This stock is created to distribute food grains in food-deficit areas and among the poorer sections of society.

• It also serves as a reserve during periods of adverse weather conditions or natural calamities.

(c) Issue Price:

• Issue price is the price at which food grains from the buffer stock are distributed to the poor or deficit areas through the Public Distribution System (PDS).

• This price is always much lower than the prevailing market price so that the poorer sections of society can afford basic food grains.

(d) Fair Price Shops:

• Commonly known as Ration Shops, these are government-regulated outlets that distribute food grains and other essential items to the public.

• They keep stocks of food grains, sugar, and kerosene oil for cooking.

• These items are sold to people with ration cards at prices lower than the market rate. Currently, there are about 5.5 lakh fair price shops across India.