The prices at which the government purchases food grains for maintaining the Public Distribution System and for building up buffer stock is known as:

Correct Option (B)

Procurement Prices

Procurement Prices refer to the prices at which the government actively purchases food grains from farmers. This procurement is undertaken primarily for two objectives: to build and maintain buffer stocks to ensure food security, and to supply food grains for the Public Distribution System (PDS) at subsidized rates. These prices are often set at or above the Minimum Support Price (MSP) to incentivize farmers and ensure adequate supply.

Incorrect Options:

Option (1) Minimum Support Prices: Minimum Support Price (MSP) is a floor price announced by the government for certain crops before the sowing season. Its purpose is to protect farmers from excessive fall in prices during bumper harvests and to encourage cultivation. While procurement often happens at or above MSP, MSP itself is not the price at which the government necessarily purchases all grains.

Option (3) Issue Prices: Issue Prices are the subsidized rates at which food grains are sold to eligible beneficiaries through the Public Distribution System (PDS). These prices are significantly lower than market prices and procurement prices, aiming to ensure affordability and food access for vulnerable sections of society. Issue prices relate to the distribution aspect, not the procurement by the government.

Option (4) Ceiling Prices: Ceiling Price is the maximum price fixed by the government for a commodity. It is typically imposed to protect consumers from excessively high prices, especially for essential goods. This concept is unrelated to the price at which the government purchases food grains from farmers for its own stock and distribution.