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Question

Difficulty: MediumAgriculture Sector Economics, Land Reforms, Subsidies, and Public Distribution System

In the context of agricultural economics and food security mechanisms in India, which of the following statements correctly defines the Central Issue Price (CIP)?

  1. A
    The minimum guaranteed price at which the Food Corporation of India procures foodgrains directly from farmers.
  2. The price at which the government allocates foodgrains to States and Union Territories for distribution under the Targeted Public Distribution System.Answer
  3. C
    The reserve price fixed for selling surplus wheat and rice to bulk buyers through open market e-auctions.
  4. D
    The benchmark statutory price below which private trade of agricultural commodities is legally prohibited in wholesale markets.

Answer

The Central Issue Price (CIP) is the subsidized rate at which the Central Government supplies foodgrains from the central pool to State Governments and Union Territories for distribution to targeted beneficiaries through the Public Distribution System (PDS).
The Central Issue Price (CIP) is defined as the subsidized price fixed by the Government of India to issue wheat, rice, and coarse grains from the central pool managed by the Food Corporation of India (FCI) to states and UTs for distribution under the Public Distribution System (PDS) and National Food Security Act (NFSA).

Step-by-Step Solution

1
Analyze the functional definition of Central Issue Price (CIP) in Indian agricultural policy.
Identify that CIP relates directly to public distribution of foodgrains rather than farmer procurement or open market sales.
Different pricing mechanisms serve distinct operational goals in food management (MSP for procurement, OMSS for market intervention, CIP for welfare distribution).
2
Compare CIP against related agricultural price terms (MSP, OMSS reserve price, statutory prices).
Confirm that CIP is the rate set for issuing grain to states under NFSA/TPDS.
Under NFSA 2013, specified central issue prices apply for subsidized grain allocation to beneficiaries.

Key Concept

Central Issue Price (CIP) and Public Distribution System Economics
Estimated Time:1m 15s
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Topics

Agriculture Sector Economics, Land Reforms, Subsidies, and Public Distribution System