Question
UPSC Prelims 2020 Question:
Which of the following factors/policies were affecting the price of rice in India in the recent past?
- Minimum Support Price
- Government's trading
- Government's stockpiling
- Consumer subsidies
Select the correct answer using the code given below.
Answer (Detailed Solution Below)
Option 4: 1, 2, 3 and 4
Detailed Solution
Explanation:
-
- Price of rice is affected by the factors which impact the demand and supply of rice in the economy.
- Government provides Minimum Support Price (MSP) for rice, which not only gives security to farmers for their crop but also affects its market supply. A higher MSP would mean more farmers choosing rice cultivation for security, hence more production and more supply, thus will affect the price in India. So, point 1 is correct.
- Similarly, Government trading or stockpiling of rice will reduce the availability of rice in the country in the short run and will raise the price in the home country. So, points 2 and 3 are correct.
- Providing consumer subsidy may lead to a rise in demand for rice and will raise its price. So, point 4 is correct.
Therefore, option (4) is the correct answer.
Subject: Economics | Agriculture
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