A Question about Price Ceilings vs Price Floors (Agriculture)

[Andyboi]

For my IA article, I was going to state a solution to rising peanut prices. (a price ceiling). This would protect consumers and blah blah blah, all that "evaluation". However, while researching Government Intervention I discovered that agriculture prices are usually fixed by price floors NOT price ceilings. So because of this I'm a bit confused on which price control would be used in a situation like this. Here's the article: http://www.huffingto..._n_1116022.html

[Keel]

For my IA article, I was going to state a solution to rising peanut prices. (a price ceiling). This would protect consumers and blah blah blah, all that "evaluation". However, while researching Government Intervention I discovered that agriculture prices are usually fixed by price floors NOT price ceilings. So because of this I'm a bit confused on which price control would be used in a situation like this. Here's the article: http://www.huffingto..._n_1116022.html

A price ceiling would work but it comes with all the consequences of having a market at disequalibrium. I think the best solution when it comes to volatile markets such as agriculture would be to have a government buffer stock scheme which guards against violent fluctuations in prices.

[Madhavi]

Agricultural products are usually fixed by price floors because in the free market the prices of these goods would be so low that farmers would have a very low revenue. As a result in order to protect the farmers the government usually sets a price floor to agricultural goods.

However this does not seem to be valid in your case as peanut prices are quite high already. Therefore in this case a price ceiling would be good in order to protect the consumers. And well then there is the evaluation that comes with that.

Good Luck