• Kerala has became the first state of India to fix the floor price for vegetables, to provide relief and support to farmers.
• The floor price has been fixed for 16 varieties of vegetables produced in Kerala.
• The floor price would be 20 percent above the production cost of the vegetables.
• The scheme would come into effect from 01 November 2020.
• Even if the market price goes below the floor price, the produce would be procured at the floor price from farmers.

What is a Floor Price ?

• A floor price is a government-imposed price limit that can be charged to procure a product, good, commodity, or service. A price floor must be higher than the equilibrium price (commonly called the “market price”) in order to be effective.