Choose the given statement is true/false:

The farmers are paid a pre-announced price for their crops, known as the "Maximum support price."

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True

False

answer is B.

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Detailed Solution

The above statement is false.
The minimum support price is the price paid to farmers by the government. This price is pre-announced during the season of sowing to encourage the farmers to cultivate food grains. The government buys these food grains from the farmers and either keep them as buffer stock or sells them to the poor through fair-price shops. This stock is sold at the issue price. The minimum support price helps the farmers be stable and earn more, especially as market prices are often lower than minimum support prices during harvest.
The correct statement would be, The farmers are paid a pre-announced price for their crops, known as the "Minimum support price."

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