Agricultural price stabilization and Measures for stabilization of agricultural prices

Agricultural price stabilization and Measures for stabilization of agricultural prices. https://cststudy.blogspot.com

Agricultural price stabilization: 

Agricultural price stabilization means reduction in price fluctuations and regulation of price movements within a certain range. It does not imply constant prices or an unchanging price level. The objective of price stabilization should be to check price fall below a certain minimum level and price rise above a certain maximum level. The range within which fluctuations in prices are to be regulated is determined by a country or government.

Measures for stabilization of agricultural prices: 

The measures adopted for stabilizing agricultural prices vary considerably, depending on the economic circumstances and the objectives sought to be achieved. A list of measures adopted by government for stabilization of agricultural prices is given below:

A. Non-price regulatory measures 

i) Increasing and stabilizing agricultural production; 

ii) Regulating imports; 

iii) Regulating exports; 

iv) Encouraging agro-processing industries; 

v) Building up buffer stocks; 

vi) Ensuring procurement and public distribution; 

vii) Regulating inter-regional movement of commodities; 

viii) Rationing 

ix) Expanding infrastructure 

x) Improving the efficiency of the marketing system

B. Direct price control measures 

i) Fixation of maximum or ceiling price; 

ii) Fixation of minimum floor price 

iii) Fixation of both maximum and minimum price; 

iv) Fixation of an administered price