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Consider the following statements:
- Minimum Support Price (MSP) may be both lower or higher than the prevailing market price of the particular crop.
- All food grain procurement operations in India are undertaken by the Food Corporation of India (FCI).
Which of the above statements is/are incorrect?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements: Minimum Support Price (MSP) may be ...
Explanation:
Statement 1: Minimum Support Price (MSP) may be both lower or higher than the prevailing market price of the particular crop.
The Minimum Support Price (MSP) is the price at which the government purchases crops from farmers to ensure a minimum income and protect them from market fluctuations. The MSP is determined by the government based on various factors such as cost of production, market demand, and overall economic conditions.
The MSP can be both lower or higher than the prevailing market price of the particular crop. If the market price of a crop is higher than the MSP, the government may set the MSP lower to avoid distorting the market and to encourage private trade. On the other hand, if the market price is lower than the MSP, the government may set the MSP higher to provide a safety net for farmers and ensure they receive a minimum income.
Therefore, statement 1 is correct.
Statement 2: All food grain procurement operations in India are undertaken by the Food Corporation of India (FCI).
The Food Corporation of India (FCI) is a government agency responsible for the procurement, storage, and distribution of food grains in India. It is the largest public sector undertaking in the country and plays a crucial role in maintaining food security.
While the FCI is the main agency involved in food grain procurement, it is not the only entity involved in the process. State agencies and cooperatives also participate in procurement operations, especially for crops such as rice and wheat. These agencies and cooperatives work in coordination with the FCI to ensure an efficient and smooth procurement process.
Therefore, statement 2 is incorrect.
Conclusion:
In conclusion, statement 1 is correct as the Minimum Support Price (MSP) can be both lower or higher than the prevailing market price of the particular crop. However, statement 2 is incorrect as all food grain procurement operations in India are not undertaken solely by the Food Corporation of India (FCI).
Statement 1: Minimum Support Price (MSP) may be both lower or higher than the prevailing market price of the particular crop.
The Minimum Support Price (MSP) is the price at which the government purchases crops from farmers to ensure a minimum income and protect them from market fluctuations. The MSP is determined by the government based on various factors such as cost of production, market demand, and overall economic conditions.
The MSP can be both lower or higher than the prevailing market price of the particular crop. If the market price of a crop is higher than the MSP, the government may set the MSP lower to avoid distorting the market and to encourage private trade. On the other hand, if the market price is lower than the MSP, the government may set the MSP higher to provide a safety net for farmers and ensure they receive a minimum income.
Therefore, statement 1 is correct.
Statement 2: All food grain procurement operations in India are undertaken by the Food Corporation of India (FCI).
The Food Corporation of India (FCI) is a government agency responsible for the procurement, storage, and distribution of food grains in India. It is the largest public sector undertaking in the country and plays a crucial role in maintaining food security.
While the FCI is the main agency involved in food grain procurement, it is not the only entity involved in the process. State agencies and cooperatives also participate in procurement operations, especially for crops such as rice and wheat. These agencies and cooperatives work in coordination with the FCI to ensure an efficient and smooth procurement process.
Therefore, statement 2 is incorrect.
Conclusion:
In conclusion, statement 1 is correct as the Minimum Support Price (MSP) can be both lower or higher than the prevailing market price of the particular crop. However, statement 2 is incorrect as all food grain procurement operations in India are not undertaken solely by the Food Corporation of India (FCI).
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Consider the following statements: Minimum Support Price (MSP) may be ...
MSP can be anything that the government considers that the farmers should fairly get. This is to help them get fair remuneration for their produce and to motivate or demotivate them to produce a particular crop. Hence it can be either lower or higher than the market price. For e.g. if the government wishes to discourage rice farming, it would lower the MSP of rice.
The procurement system decentralization was started in 1997 where states play a very important role in the supply chain. Not all procurements are done by FCI. State cooperative agencies and other state-level distribution agencies also play a crucial role.
The procurement system decentralization was started in 1997 where states play a very important role in the supply chain. Not all procurements are done by FCI. State cooperative agencies and other state-level distribution agencies also play a crucial role.
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Consider the following statements: Minimum Support Price (MSP) may be both lower or higher than the prevailing market price of the particular crop. All food grain procurement operations in India are undertaken by the Food Corporation of India (FCI).Which of the above statements is/are incorrect?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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