Question

What is buffer stoff why was is created by government

Answer 1

Buffer stock is the reserve of food or other commodities that can be used later on during emergency conditions.

Explanation:

• There are two main reasons why buffer stocks are created by the government.
• First, it is created so that the government has some reserve of food during the time of emergency like wars, or other natural calamities.
• Second, it is helpful in regulating the price of commodities in the market.
• These stocks are created when there is a surplus food or commodity, this huge quantity of that commodity can make the price in the market drop and farmers would not be able to profit from their produce.
• So, the government buys the surplus from the farmers, create a buffer stock and then steadily releases these commodities which maintains its  price in the market, neither making it expensive or cheap.