How many of the following statements regarding PDS & MSP are incorrectly matched with its meaning?

1. MSP (Minimum Support Price) – The price at which the government procures crops from farmers to ensure price stability.

2. Issue Price – The price at which the Central Government provides food grains to states for PDS distribution.

3. Central Pool – The stock of food grains procured and maintained by FCI for PDS and buffer reserves.

4. Economic Cost – The total cost paid by the farmer for growing crops, including labor, seeds, fertilizers, and land rent.

5. Central government is responsible for identifying eligible beneficiaries under NFSA.

Question

Question

Answer 1

The correct answer is option 1.

Key Points

Statement 1 – Correct
- MSP (Minimum Support Price) is the guaranteed price at which the government purchases crops from farmers to protect them from market price fluctuations.
Statement 2 – Correct
- Issue Price is the subsidized rate at which food grains are sold to states under NFSA and PDS.
Statement 3 – Correct
- The Central Pool is the FCI-managed food grain stock used for distribution under PDS and maintaining buffer reserves.
Statement 4 – Incorrect
- Economic Cost is NOT the cost incurred by the farmer; it refers to the total cost incurred by the government in procuring, storing, and distributing food grains, which includes MSP, handling charges, transport, and storage costs.
Statement 5 –Incorrect
- State governments identify eligible beneficiaries under NFSA based on central guidelines and have the discretion to manage their own criteria.
Hence, two pairs are incorrectly matched.