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

APEDIA

UPSC Prelims

2019 • 02 Jun, 2019 • Paper-1

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

Correct Answer

procurement incidentals and distribution cost

Economic Cost Structuring: For the state-run Food Corporation of India (FCI), the 'Economic Cost' is the final, total cost incurred by the government to securel......

💡 Analysis & Explanation

Economic Cost Structuring ▼

For the state-run Food Corporation of India (FCI), the 'Economic Cost' is the final, total cost incurred by the government to securely deliver food grains into the public distribution system network.

Component Breakdown ▼

This total cost fundamentally comprises three massive pillars: 1. The pooled cost of the physical grain (Minimum Support Price plus any state bonus). 2. Procurement incidentals (costs incurred during local procurement like mandi taxes, labor, packing materials). 3. Distribution costs (the heavy costs for freight, handling, storage, and transit losses required to move the grain to final state distribution depots).

Conclusion ▼

Therefore, combining procurement incidentals and the overarching distribution cost comprehensively captures the remaining systemic expenses, making option C exactly correct.

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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