Under the contracts that fast food chains make with farmers, how is the price at which the farmers’ produce will be bought decided?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It is decided in advance, before the produce is grown
Fast food chains give farmers seeds and inputs and promise to buy the produce at pre-decided prices. This lowers the price risk of farmers.
NCERT (2026-27): “5.4 Agricultural Market System … Further, several national and multinational fast food chains are increasingly entering into contracts/ alliances with farmers to encourage them to cultivate farm products (vegetables, fruits, etc.) of the desired quality by providing them with not only seeds and other inputs but also assured procurement of the produce at pre-decided prices. It is argued that such arrangements will help in reducing the price risks of farmers and would also expand the markets for farm products. …” |