What is ‘buffer stock’? Why was it created by the government?
OR
Mention the activities of Food Corporation of India (FCI).
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.
- 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.