target price

target price
/'tɑ:gɪt praɪs/ noun
a wholesale price within the EU for certain products, such as wheat, which market management is intended to achieve; it is linked to the intervention price
COMMENT: Target prices are set in terms of fixed agricultural units of account, which are converted into different national currencies using adjusted exchange rates known as ‘green rates’ (in the UK, the ‘green pound’ ). A system of levies on non-EU agricultural imports is used to protect target prices when they are set above the general level of world prices. In addition, the EU has established an internal price support system based on a set of intervention prices set slightly below the target price. If the level of supply is in excess of what is needed to clear the market at the target price, the excess supply is bought by the Community at the intervention price, thereby preventing overproduction from depressing the common price level as would normally happen in a free market.

Dictionary of banking and finance. 2015.

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