Consider the following statements regarding the Food Corporation of India (FCI): 1. It purchases wheat and rice from farmers in states where there is surplus production. 2. It pays farmers a pre-announced price called the Minimum Support Price (MSP). 3. It distributes foodgrains through ration shops at market prices. Which of the following statements are correct ?

Correct Option The correct option is (a) 1 and 2 only. Explanation The Food Corporation of India (FCI) is the nodal central agency responsible for the procurement, storage, and distribution of foodgrains to ensure national food security. Its operations bridge the gap between surplus production and consumer demand through the Public Distribution System (PDS). Statement-wise Analysis: - Statement 1 is Correct: The FCI purchases foodgrains (primarily wheat and rice) from farmers in states with surplus production. This creates a buffer stock to be used in deficit areas and during calamities. - Statement 2 is Correct: The farmers are paid a pre-announced price for their crops, known as the Minimum Support Price (MSP). The government declares the MSP before the sowing season to incentivize production and protect farmers from price fluctuations. - Statement 3 is Incorrect: The foodgrains procured by the FCI are distributed through ration shops (Fair Price Shops) to the poorer sections of society. These grains are sold at a price significantly lower than the market price, known as the Issue Price. Selling at market prices would defeat the purpose of food security for the poor. Key Takeaway: The FCI procures grains at the Minimum Support Price (MSP) to support farmers and distributes them via the Public Distribution System (PDS) at the subsidized Issue Price to ensure affordability for consumers.

NCERT Class 9 Economics — Chapter 4: Food Security in India

mcqeasy

Consider the following statements regarding the Food Corporation of India (FCI):

It purchases wheat and rice from farmers in states where there is surplus production.
It pays farmers a pre-announced price called the Minimum Support Price (MSP).
It distributes foodgrains through ration shops at market prices.

Which of the following statements are correct ?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 2 only
B2 only
C1 and 3 only
D1, 2 and 3

Did you get this right?

Solution

Correct Option

The correct option is (a) 1 and 2 only.

Explanation

The Food Corporation of India (FCI) is the nodal central agency responsible for the procurement, storage, and distribution of foodgrains to ensure national food security. Its operations bridge the gap between surplus production and consumer demand through the Public Distribution System (PDS).

Statement-wise Analysis:

Statement 1 is Correct: The FCI purchases foodgrains (primarily wheat and rice) from farmers in states with surplus production. This creates a buffer stock to be used in deficit areas and during calamities.
Statement 2 is Correct: The farmers are paid a pre-announced price for their crops, known as the Minimum Support Price (MSP). The government declares the MSP before the sowing season to incentivize production and protect farmers from price fluctuations.
Statement 3 is Incorrect: The foodgrains procured by the FCI are distributed through ration shops (Fair Price Shops) to the poorer sections of society. These grains are sold at a price significantly lower than the market price, known as the Issue Price. Selling at market prices would defeat the purpose of food security for the poor.

Key Takeaway:
The FCI procures grains at the Minimum Support Price (MSP) to support farmers and distributes them via the Public Distribution System (PDS) at the subsidized Issue Price to ensure affordability for consumers.

Your note

More from Chapter 4: Food Security in India

Match List I with List II and select the correct answer using the code given below: List I (Term) | List II (Definition) A. Buffer Stock | 1. Pre-announced price paid to farmers B. Minimum Support Price | 2. Payment to producer to supplement market price C. Issue Price | 3. Price lower than market price for distribution D. Subsidy | 4. Stock of foodgrains procured by government

easy

Consider the following statements regarding the Antyodaya Anna Yojana (AAY): 1. It was launched in December 2000. 2. It targeted all families living below the poverty line without any specific focus. 3. The scheme provided foodgrains at prevailing market rates. Which of the following statements are correct ?

easy

Which of the following statements correctly describes the role of cooperatives in food security in India? 1. In Tamil Nadu, around 94 % of fair price shops are run by cooperatives. 2. Mother Dairy provides milk and vegetables at controlled rates in Delhi. 3. The Academy of Development Science (ADS) has facilitated a network of NGOs for setting up Grain Banks in Maharashtra.

medium

Consider the following statements about the 'Annapurna Scheme' (APS): 1. It was launched in the year 2000. 2. Its target group is indigent senior citizens. 3. Under this scheme, 10 kg of foodgrains are provided free of cost. Which of the following statements are correct ?

medium

Which of the following factors has contributed to the decline of the Public Distribution System (PDS) in recent years? 1. Diverting grains to the open market by PDS dealers. 2. Selling poor quality grains at ration shops. 3. The small difference between the price of PDS items for APL families and the open market price. 4. Irregular opening of ration shops.

medium

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Correct Option

The correct option is (a) 1 and 2 only.

Explanation

Statement-wise Analysis:

Statement 1 is Correct: The FCI purchases foodgrains (primarily wheat and rice) from farmers in states with surplus production. This creates a buffer stock to be used in deficit areas and during calamities.
Statement 2 is Correct: The farmers are paid a pre-announced price for their crops, known as the Minimum Support Price (MSP). The government declares the MSP before the sowing season to incentivize production and protect farmers from price fluctuations.
Statement 3 is Incorrect: The foodgrains procured by the FCI are distributed through ration shops (Fair Price Shops) to the poorer sections of society. These grains are sold at a price significantly lower than the market price, known as the Issue Price. Selling at market prices would defeat the purpose of food security for the poor.