[Solved] Which of the following factors/policies were affecting the price of rice in India in the recent past? 1. Minimum Support Price 2. Government’s trading 3. Governments stockpiling 4. Consumer subsidies Select the correct answer using the code given below:

Q73. Which of the following factors/policies were affecting the price of rice in India in the recent past?

1. Minimum Support Price

2. Government’s trading

3. Governments stockpiling

4. Consumer subsidies

Select the correct answer using the code given below:

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

• The domestic factors which affect prices of rice in India are as follows-

o The intensity of seasonal monsoon across India and production of Basmati and non-basmati rice.

o Minimum support price and government’s trading of rice results in the diversion of stocks from the open market hence driving up the price for the ultimate consumers which will lead to increase in price for ultimate customers.

o Rice tenders by Food Corporation of India and other organizations

o Consumer subsidies

o The government’s stockpiling (lower stockpiling will lead to less buffer, hence price rise).

o Climatic shocks can impact rice

production and prices in the short run (if the demand increases).