What is ‘buffer stock’? Why was it created by the government?



What is ‘buffer stock’? Why was it created by the government?
Mention the activities of Food Corporation of India (FCI).
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.
  • The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price (MSP).
  • The MSP is declared by the government every year, before the sowing season to provide incentives to the farmers for raising the production of these crops.
  • The purchased food grains are stored in granaries by the government.
  • 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.
  • This also helps resolve the problem of shortage of food during adverse weather conditions or during the periods of calamity.