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:
Correct Answer: Option D
Minimum Support Price (MSP), Government's trading, Government's stockpiling, and Consumer subsidies all influence the price of rice in India.
Statement 1 is correct: MSP can lead to a diversion of stocks from the open market, increasing prices for consumers. It also prevents prices from falling below the MSP, providing a price floor for farmers.
Statement 2 is correct: Government trading impacts demand in international markets, subsequently affecting domestic rice prices. Long-term projections of rice demand and supply influence future rice prices.
Statement 3 is correct: Government stockpiling (or low stock levels) affects the ability to buffer price increases caused by other factors. Adequate stock levels can help stabilize prices.
Statement 4 is correct: Consumer subsidies reduce the effective price paid by consumers, impacting overall demand and market prices.
Therefore, all the given factors affect the price of rice in India.