Minimum export price
Also called: MEP · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT
Meaning
A minimum export price (MEP) is a floor price set by the government. Exporters cannot sell a commodity abroad below this price. It is used when domestic prices rise. Cheap exports become impossible, so more of the crop stays in India and prices at home cool down. The cost is that farmers lose some of the gain from high world prices. India's image as a reliable exporter can also suffer.
Example
In 2023-24, India put an MEP on basmati rice. It also used both a ban and an MEP on onions. Onions priced below the MEP could not be shipped out, which kept more supply in Indian markets.
Don't confuse with
- Minimum support price (MSP): MSP is a floor that protects farmers. The government promises to buy at that price. MEP is a floor on export deals and is meant to protect consumers at home.
- Export ban: a ban stops all exports of the item. An MEP stops only exports priced below the floor.