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:
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1, 2 and 4 only
(b) 1, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Answer: (d)
Explanation:
- Statement 1 is correct. The government’s involvement in trading and setting a minimum support price for rice can lead to the diversion of stocks from the open market, which in turn can drive up prices for consumers.
- Statement 2 is correct. Short-term fluctuations in rice production and prices are influenced by climatic shocks that impact both supply and demand factors.
- Statement 3 is correct. Rice tenders conducted by organizations like the Food Corporation of India and consumer subsidies can help lower prices for the end consumer, making rice more affordable.
- Statement 4 is correct. The government’s stockpiling of rice can be constrained by low stock levels, limiting its ability to mitigate price increases during times of scarcity.
