Question

Agricultural price supports result in governments

holding large inventories of agricultural products. Why

do you think the government cannot simply give the

products away to poor people?

Short answer

The government cannot simply give the products away to poor people.

Step-by-step solution

Step 1

Agriculture Price:

Agriculture price means a policy to determine, regulate and control the prices of agricultural products. To maintain an appropriate relationship and balance between the prices of food grains and non-food grains.

Step 2

Government buys agricultural products from the farmers and keep them as buffer stock in order to meet the demand during the time of adversities, if arise. If the government would give away that stock to the poor people then they will not buy from the producers directly as they will have to pay the market price for that.