Food Corporation Economic Cost

The economic cost of food grains to the Food Corporation of India comprises the MSP plus bonus paid to farmers, plus procurement incidentals (such as handling, loading, unloading) and charges for storage in godowns. These components represent the total cost to FCI for acquiring and storing foodgrains before distribution. While transportation and interest costs are relevant, the standard definition of economic cost focuses on MSP, bonus, procurement incidentals, and godown charges. The economic cost differs from the statutory cost which is used for subsidy calculations. > FCI economic cost = MSP + bonus + procurement incidentals + godown charges. Answer: d.