Support Prices

Support prices in Global Commerce Policy

In this regard, support prices is: a device to give producers of primary commodities in particular an assured minimum return. This can be done through, for example, a floor price, the loan rate, subsidies and variable levies, sometimes aided by import restrictions. Support prices may be related to the market price in that they respond to price signals to some extent. Determining the market price itself becomes problematical under such conditions. Support prices may be unrelated to market prices. Their purpose then simply is to give producers a guaranteed income. The domestic consumer and efficient producers in other countries share the bill between them.[1]

Support pricesin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Support prices” entry (OAS)

See Also