Question

What is the procurement price for an agricultural commodity?
A) Money paid to the farmers during the drought
B) The subsidy paid by the Govt over the market price
C) The minimum price at which Govt, Is ready to buy
D) The floor - price below which it cannot be sold

Answer 1

Hint: Cost of Purchasing The fundamental difference between Procurement Price and MSP is that MSP is announced before sowing, whereas PP is announced after harvest. Since 1968-69, there has been no practise of declaring a separate Procurement Price, and MSP is frequently used instead.

Complete answer:
The procurement price for an agricultural commodity is the minimum price in which the government is ready to buy. Agricultural commodities are stapling crops and livestock that are grown or cultivated on farms or plantations. Grain, livestock, and dairy are all agricultural commodities that supply nourishment for people and animals all over the world.

Main uses of agriculture commodity: Some agricultural commodities, on the other hand, have entirely industrial applications. Lumber from trees is used in the construction and furniture industries, and latex from the rubber tree is used by manufacturers in a variety of industries. Sheep's wool is used to make garments, while lanolin is used in skin- and hair-care products. Some agricultural products can be used as both a food source and an industrial ingredient. Corn is consumed by both humans and animals, but it is also used in the creation of fuel.

Why are agricultural commodities important?
Almost every living thing in the world is reliant on the agriculture industry in some form. We consume the grains, fruits, vegetables, and cattle that farmers produce; we build our houses out of lumber; we wear cotton and wool clothing, and we drive automobiles with rubber tires. Furthermore, farming employs approximately 1.3 billion people or nearly 20% of the world's population. Farming employs more people than any other industry in various parts of the world, such as South Asia and Sub-Saharan Africa. The agricultural industry has a massive worldwide impact.

Therefore the correct answer is option ‘C’.

Note: According to the United Nations' Food and Agricultural Organization, the agriculture industry is worth more than 3 trillion in constant 2010 dollars. Agricultural commodities are set to play an even bigger role in the decades ahead, as the global population is expected to rise from 7.5 billion to 11.8 billion by 2100.