Multiple choice

What steps does the government take if prices of the crops fall due to more production?

  1. The government fixes the minimum price for chief crops to avoid exploitation of farmers.

  2. The government fixes the maximum price for chief crops to benefit the traders.

  3. The government distributes the crops free of cost in the public.

  4. The government starts consuming great amounts of the crops.
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A Correct answer
Explanation

When crop prices fall due to excess production, the government implements Minimum Support Price (MSP) to protect farmers from distress sales. MSP ensures farmers receive a fair price even during market gluts, preventing exploitation by traders. Maximum prices would hurt farmers, while free distribution or government consumption are not standard agricultural policies.

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