question_answer 27)

Why buffer stock is created by the government?

Answer:

Buffer stock is the stock of foodgrains, namely wheat and rice, procured by the government through Food Corporation of India (FCI). The FCI purchases wheat and rice from the farmers in states where there is surplus production.   (i) The farmers are paid a pre-announced price for their crops. This is called the Minimum Support Price.   (ii) The purchased foodgrains are stored in the granaries and called buffer stock. This is done to distribute foodgrains in the deficit areas and among the poorer strata of society at a price lower than the market price, also known as issue price.   (iii) This also helps to resolve the shortage of food during adverse weather conditions or during a period of calamity.