Which of the factors policies were affecting the price of rice in India in the recent past?

The government’s trading and Minimum support price of rice- it results in the diversion of stocks from the open market hence driving up the price for the ultimate consumers. Hence 1 is correct. Consumer subsidies ( it lowers the prices for the ultimate consumer) Hence 3 is correct.

What factors affect the price of rice?

Rice prices change from time to time because supply and demand, the factors which determine prices change with respect to each other. The relative importance of certain parts of demand and supply and their respective influences on prices is of most concern to the farmer.

What is are the factors that affects the change in quantity demand for rice?

Rice yields are affected by the climatic conditions in each area, technological changes, area in rice, and other factors. Income and population are major variables affecting food rice and brewers rice consumption. Changes in retail price have a minor impact on demand.

What are the consequences of changing rice prices?

The results show that rising rice prices adversely affects households’ income in the short and long run, and increases poverty in most of the regions except for rice producing areas. The effect is higher in urban areas than in rural areas. Rising food prices also increases income inequality except for a few regions.

How is MSP calculated Upsc?

The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers. The Union Budget for 2018-19 had announced that MSP would be kept at levels of 1.5 the cost of production.

Which is the largest rice producing state in India?

West Bengal
West Bengal is the largest rice producing state in India. Almost half of its arable land is under rice cultivation. In the fiscal year 2016, the state produced about 15.75 million tonnes of rice over 5.46 million hectare cultivable area.

How does a lower and higher market price affects the rice industry?

Higher prices will discourage consumption, encourage more production, and possibly convert some households from net consumers to net producers. Lower prices could do the opposite. Higher rice prices will substantially hurt poor net rice consumers because rice is typically a larger share of expenditures for the poor.

What is rice Tariffication law?

11203, otherwise known as the Rice Tariffication Law, in February 2019. After more than four decades of battles to reform the rice sector, the RTL ended NFA’s monopoly, removed quantitative restrictions on rice imports, and replaced them with a 35 percent import tariff.

Why we experienced recently rice shortage in the market?

The long queues of people buying rice are not new. The same scenario happened in the 1930s, 1970s and in the middle of 1990s brought about by weather disaster, mismanagement and corruption. At present, the crisis is also brought about by abandonment, conversion and reclassification of lands.

What is the effect of rice shortage?

Although meant to stabilize rice prices, the system reached a crisis point in 2018 when a severe rice shortage became a major driver of inflation, which rose by a factor of 10. The effects were felt disproportionately by the poor, who spend most of their household budget on basic food items.

Who decides FRP?

The FRP has been determined on the basis of recommendations of Commission for Agricultural Costs and Prices (CACP) and after consultation with State Governments and other stake-holders. In last 3 sugar seasons 2017-18, 2018-19 & 2019-20, about 6.2 Lakh Metric Tonne (LMT), 38 LMT & 59.60 LMT of sugar has been exported.

Why is the price of rice in India so high?

The intensity of seasonal monsoon across India and production of Basmati and non-basmati rice. The ratio of full and broken kernels in milling the paddy. The government’s trading and Minimum support price of rice- it results in the diversion of stocks from the open market hence driving up the price for the ultimate consumers.

What are the factors that affect the price of commodities?

1. Minimum Support Price 2. Government’s trading 3. Government’s stockpiling 4. Consumer subsidies

What is the role of government in the rice market?

Government also carries out auction of the excess stockpile or intervenes when market prices soar to stabilize them. Similarly stockpiling is done to offload the stock when market prices soar providing cheap rice to consumers and stocking when prices fall ensuring remunerative prices to farmers.

What is the role of MSP in the rice market?

MSP increases the overall price of rice in market as the traders have to buy near MSP value otherwise farmers have the option to sell to government appointed agency at MSP. Government also carries out auction of the excess stockpile or intervenes when market prices soar to stabilize them.

https://www.youtube.com/watch?v=8rvkH4oRxwc