Fixation of price levels for wheat and rice by the Commission for Agriculture Costs and Prices (CACP) is an example of ?

The Commission for Agricultural Costs and Prices (CACP) recommends the Minimum Support Price (MSP) for 23 mandated crops, including wheat and rice [3]. MSP is a form of 'Administered Price' because it is a price level determined and announced by the government rather than being solely determined by market forces of demand and supply [5]. The government announces three types of administered prices: Minimum Support Prices, Procurement Prices, and Statutory Minimum Prices. While MSP specifically acts as a 'Support Price' to protect farmers from distress sales during bumper harvests [4], in the broader classification of economic pricing mechanisms, any price fixed by a government authority to intervene in the market is categorized as an Administered Price. This system ensures price stability and provides a guaranteed floor price to producers.

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 305
2. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 306
3. [5] https://gacbe.ac.in/pdf/ematerial/18MEC44E-U5.pdf
4. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > MINIMUM SUPPORT PRICE > p. 328