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this policy fixes the minimum prize of any sale able product by interfering in market driven prices. this aim's at protecting the interest of customer, seller and even both.

suppose farmer's producing, sugarcane had surplus production. this will reduce the price of sugarcane. in order to compensate there loss,government will intervene, to fix minimum price of procurement of sugarcane. in this case, government protected the loss of farmers. sugar manufacturing industries can't procure sugarcane below the minimum price fixed.

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