{"id":91699,"date":"2025-06-01T11:02:52","date_gmt":"2025-06-01T11:02:52","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91699"},"modified":"2025-06-01T11:02:52","modified_gmt":"2025-06-01T11:02:52","slug":"the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/","title":{"rendered":"The economic cost of food grains to the Food Corporation of India is M"},"content":{"rendered":"

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<\/p>\n

[amp_mcq option1=”transportation cost only” option2=”interest cost only” option3=”procurement incidentals and distribution cost” option4=”procurement incidentals and charges for godowns” correct=”option3″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC IAS – 2019<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost.
\n<\/section>\n
\nThe economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components:
\n1. Acquisition Cost: This is the price paid to the farmers (MSP + bonus, if any).
\n2. Incidentals and Distribution Costs: These are expenses incurred beyond the acquisition cost.
\n– 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.
\n– 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).
\nOption C correctly encapsulates these additional costs as “procurement incidentals and distribution cost”.
\n<\/section>\n
\nThe economic cost is higher than the MSP and is a key factor in determining the issue price of food grains sold through the PDS, although the issue prices (Central Issue Price) are often kept significantly lower than the economic cost, leading to food subsidies borne by the government.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

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 [amp_mcq option1=”transportation cost only” option2=”interest cost only” option3=”procurement incidentals and distribution cost” option4=”procurement incidentals and charges for godowns” correct=”option3″] This question was previously asked in UPSC IAS – 2019 Download … <\/p>\n

Detailed SolutionThe economic cost of food grains to the Food Corporation of India is M<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1119,1379,1120],"class_list":["post-91699","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1119","tag-agriculture-and-allied-sectors","tag-economic-development","no-featured-image-padding"],"yoast_head":"\nThe economic cost of food grains to the Food Corporation of India is M<\/title>\n<meta name=\"description\" content=\"The correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost. The economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components: 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".\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The economic cost of food grains to the Food Corporation of India is M\" \/>\n<meta property=\"og:description\" content=\"The correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost. The economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components: 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".\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:02:52+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The economic cost of food grains to the Food Corporation of India is M","description":"The correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost. The economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components: 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\".","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/","og_locale":"en_US","og_type":"article","og_title":"The economic cost of food grains to the Food Corporation of India is M","og_description":"The correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost. The economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components: 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\".","og_url":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:02:52+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/","url":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/","name":"The economic cost of food grains to the Food Corporation of India is M","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:02:52+00:00","dateModified":"2025-06-01T11:02:52+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The correct answer is C. The economic cost of food grains to the Food Corporation of India includes Minimum Support Price and bonus (if any) paid to the farmers plus procurement incidentals and distribution cost. The economic cost for FCI is the total cost incurred in the process of procurement, storage, and distribution of food grains under the public distribution system (PDS) and other welfare schemes. It comprises two main components: 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\".","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/the-economic-cost-of-food-grains-to-the-food-corporation-of-india-is-m\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"The economic cost of food grains to the Food Corporation of India is M"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91699"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91699\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}