The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus
transportation cost only
interest cost only
procurement incidentals and distribution cost
procurement incidentals and charges for godowns
Answer is Wrong!
Answer is Right!
This question was previously asked in
UPSC IAS – 2019
1. Acquisition Cost: This is the price paid to the farmers (MSP + bonus, if any).
2. Incidentals and Distribution Costs: These are expenses incurred beyond the acquisition cost.
– Procurement Incidentals include expenses incurred during procurement up to the point of storage, such as mandi charges, handling charges, transportation from mandi to depot, interest on borrowed capital for procurement, and storage losses.
– Distribution Costs include expenses incurred from the point of storage onwards, such as freight charges for inter-state movement, handling charges at distribution centres, storage losses during distribution, administrative costs, and retailers’ margins (in some cases).
Option C correctly encapsulates these additional costs as “procurement incidentals and distribution cost”.