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(a) Minimum support price – The Food Corporation of India purchases wheat and rice from the farmers in states where there is surplus production. The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price. Before the sowing season every year, the government announces the MSP, and the purchased food grains are stored in granaries.

(b) Buffer stock – Buffer stock is the stock of food grains, mainly wheat and rice, procured by the Government through the Food Corporation of India. This buffer stock is used by the government in case of any calamity or disaster or for the poorer section of society.

(c) Issue price – Food is kept in stocks in the form of buffer stock to distribute food grains in the deficit areas and among the poorer strata of the society at a price lower than the market. This price is also known as the Issue Price.

(d) Fair price shops – Ration shops, also known as Fair Price Shops, keep stock of food grains, sugar, and kerosene for cooking. These items are sold to people at a price lower than the market price. Any family with a ration card can buy a stipulated amount of these items every month from the nearby ration shop.