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• Price Intervention


  Prices set by a government or an international body at which it will buy the supply of a product, or occasionally sell from government stockpiles, in order to stabilize market prices
• Government intervention that affects prices

  • Price Ceilings
  • Price Subsidies
  • Market Monitoring
  • Import Regulations
  • Direct assistance to Farmers
• Price control


  An economic policy imposed by governments that set minimums (floors) and maximums (ceilings) for the prices of goods and services in order to make them more affordable for consumers
• Reasons for Having Intervention Prices

  • Agricultural Volatility
  • Political Considerations
  • Economic Policy
  • Ensuring a Fair Standard of Living for Farmers
• Agricultural Volatility


  • Agriculture is particularly prone to price volatility due to the unpredictability of factors affecting supply and demand
• Political Considerations


  • The agricultural sector often has significant political influence, and supporting farmers through intervention prices can be a politically advantageous policy
• Economic Policy


  • Some countries use intervention prices as part of a broader economic policy to control inflation or to stabilize key sectors of the economy
• Ensuring a Fair Standard of Living for Farmers


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• Importance of Intervention Prices

  • Income Stability for Farmers
  • Rural Development
  • Food Security
  • Preventing Market Failure
• Effects of Intervention Prices

  • Market Stabilization
  • Surpluses and Shortages
  • Taxpayer Costs
  • International Trade Impact
• Intervention prices can provide benefits, they also come with challenges and criticisms. They can distort market incentives, leading to inefficient resource allocation and can also have significant financial costs
• Additionally, there can be international ramifications, as such policies can affect global markets and trade relations. As a result, the use of intervention prices is a subject of ongoing debate in economic and political circles