Agricultural price stabilization and Measures for 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.

 

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:

 

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

 

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