With reference to 'Procurement Price', consider the...

Name: Problem 5, Chapter 2: CUET UG : Section I and Section III Exam 2024 (English Edition) - 20 Practice Tests (1000 Solved Questions) with Free Access to Online Tests
Uploaded: 2024-01-26T23:27:06-08:00
Duration: 1 min
Channel: Breanna Ollech
Description: With reference to 'Procurement Price', consider the following statements: 1. It is announced before sowing of the crop. 2. The procurement price is always more than the Minimum Support Price (MSP). Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

With reference to 'Procurement Price', consider the following statements: 1. It is announced before sowing of the crop. 2. The procurement price is always more than the Minimum Support Price (MSP). Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

With reference to 'Procurement Price', consider the following statements:
1. It is announced before sowing of the crop.
2. The procurement price is always more than the Minimum Support Price (MSP).
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Key Concepts

Procurement Price

This is the price at which the government or its agencies purchase crops from farmers. It is used as a mechanism to support the agriculture sector by ensuring farmers get a remunerative price for their produce, especially when market prices are low. The procurement price may not necessarily be set before the sowing season, as it is often determined closer to or during the harvesting period when market conditions are clearer.

Minimum Support Price (MSP)

The Minimum Support Price is a government-set price for certain agricultural commodities, aimed at protecting farmers from sharp falls in market prices. It is typically announced prior to the sowing season to help farmers decide which crops to grow and ensure a minimum profit margin, though the procurement price during actual procurement may be equivalent to or sometimes above the MSP depending on prevailing circumstances.

Timing of Price Announcements in Agricultural Policy

This concept refers to when different prices, such as the MSP and procurement price, are announced in the agricultural cycle. The MSP is generally set before the sowing season to assist farmers in planning their cropping decisions, whereas the procurement price is usually declared closer to the time of procurement based on actual market conditions. Understanding this timing is crucial in evaluating policy effectiveness and predicting market behavior.

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