Question

Write a short notes on Buffer Stock.

Answer 1

A buffer stock scheme (commonly implemented as intervention storage, the "ever-normal granary") is an attempt to use commodity storage for the purposes of stabilising prices in an entire economy or, more commonly, an individual (commodity) market.[1] Specifically, commodities are bought when a surplus exists in the economy, stored, and are then sold from these stores when economic shortages in the economy occur.[1]

Answer 2

$\bold{Buffer\:Stock}$

• Buffer stock refers to a reserve of a commodity that is used to offset price fluctuations and unforeseen emergencies. Buffer stock is generally maintained for essential commodities and necessities like food grains, pulses etc.

• The concept of buffer stock was first introduced during the IV Five Year Plan (196974).

• The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on quarterly basis: i.e as on 1st April, 1st July, 1st October and 1st January of every financial year.

• The latest norms set may be seen here. On 15 December 2015, it was decided by the Government to create a buffer stock of pulses of 1.5 lakh tonnes to control fluctuation of prices of pulses.

• Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.

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@swigy