Objectives
Ensure remunerative prices for farmers, maintain affordable food prices for consumers, manage food inflation, ensure food security.
Key Instruments
Minimum Support Price (MSP), Public Procurement, Export/Import duties, Export bans/Minimum Export Price (MEP), Buffer Stock operations, Subsidies.
Challenges
Market distortions, fiscal burden, timing of intervention, impact on trade relations, difficulty in reaching all farmers/grades of produce.
Impact of Volatility
Erratic weather and supply-demand imbalances exacerbate price volatility, requiring frequent government intervention.
Objective
To ensure adequate supply, prevent hoarding, stabilize prices, and ensure continuous availability of essential goods to consumers.
Tools
Stock-holding limits, buffer stock operations, export/import restrictions, Minimum Support Price (MSP), Public Distribution System (PDS).
Legal Basis
Often enabled by acts like the Essential Commodities Act (ECA), 1955, which empowers the government to regulate production, supply, distribution, trade, and commerce of essential commodities.
Context
Interventions are common during festive seasons, periods of supply-demand imbalance, or in response to external shocks (e.g., El Niño affecting crop yields).
