Question

The prices at which the government purchases food grains for maintaining the public distribution system and for building up buffer-stock is known as: 

(a) minimum support prices 

(b) procurement prices 

(c) issue prices 

(d) ceiling prices

Answer 1

(b) Procurement price is the support price at which the government will buy whatever quantum farmers wants to sell to the government in the event of private traders not buying the product. This is done to give a fair price to the farmer and to create a buffer stock of food grains to meet public distribution system requirements.