Why Buffer Stock is created by Government?

Buffer stock is made to disperse the food grains in the food deficiency regions and among the less fortunate layers of society at a lower cost than the market value which is otherwise called issue cost. Buffer stock is likewise useful in the midst of regular catastrophes to give food to the populace during antagonistic circumstances.

A buffer stock is a framework or plan which purchases and stores stocks now and again of good gathers to forestall costs falling under an objective reach (or value level), and deliveries stocks during terrible harvests to forestall costs transcending an objective reach (or cost level). In this way, it kills the variance underway of a given harvest, with the goal that the costs might stay stable. In the midst of surplus creation, government acquires the yields from ranchers through MSP so that the ranchers don’t languish adversely over creating more. In the midst of shortfall, government discharges the support stocks in a staged way so that interests of the shoppers don’t endure, what’s more, they can meet their dietary prerequisites at sensible costs.

Buffer stock policy in India

The idea was presented in the fourth long term plan (1969-74), and a cushion load of food grain was to be kept up with by FCI for the benefit of the Government of India to meet the month to month arrival of food grains for supply through PDS (Targeted Public Distribution System, TPDS and Other Welfare Schemes (OWS) to meet crisis circumstances emerging out of unforeseen catastrophes like yield disappointment, cataclysmic events, and so on and for market mediation to increase supply in the event of shortage creation of food grains, so that, the open market costs get directed.

Food grain loading standards alludes to the degree of stock in the focal pool that is adequate to meet the functional necessities of food grains for example for circulation under Targeted Public Circulation System TPDS, Other Welfare Schemes (OWS) and exigencies anytime of time. Prior this idea was named as Buffer Norms and Strategic Reserves. Buffer standards are fixed by CCEA (Cabinet board of trustees on Economic Affairs led by PM) on quarterly premise as on first April, first July, first October, and first January of each monetary year. The cradle standards have been changed in January 2015.
Functional stock = Stocks reserved for TPDS + OWS and Food security stocks/saves.

Notwithstanding the buffer standards, an essential save of 30 lakh huge loads of wheat and 20 lakh huge loads of rice is likewise kept up with. This stock is named as Food Grain Stocking Norms. The Buffer standards of food grains in the focal pool have been reexamined in 2015 and Cabinet Board on Economic Affairs, CCEA has supported that in the event that the load of food grains is more than the modified cradle standard, the Department of Food and Public Distribution will offload overabundance stock in the homegrown market through open deal or through sends out. From 2015, Government has chosen to make a cradle load of 1.5 lakh huge loads of heartbeats to control vacillation in their costs. NAFED, SFAC and FCI will acquire beats for cradle stock. Food stock over the base cushion standards are treated as ‘Overabundance Stock’, and government can exchange them through trade, open market deals or extra allotment to states.

The following reasons for creating buffer stock by government: 

• The Stock of food grains obtained through the Food Corporation of India (FCI) by the Government is known as support stock.  and mainly rice and wheat are procured.
• Silos are utilized to store the food grains that are bought.
• Government utilizes this support stock to disperse the food grains to more unfortunate segments of the general public at lower than the market value which is otherwise called the issue cost.
• Cushion stocks help in tackling the issue of food deficiency during disaster and when weather patterns are antagonistic.
• To give motivators to the farmers to raise crop creation, the Government proclaims the Minimum Support Price (MSP) before the start of the planting season.
• At the point when the FCI buys the food grains from the farmers with surplus creation, they are followed through on a pre declared cost.
• Minimum Support Price (MSP) is the term used to portray the pre reported value that is paid to the farmers.
• Buffer stock will help in settling the food deficiency issues looked during regular disasters like dry spells, floods, tremors and so forth.
• Buffer stock is utilized to meet the food necessities of more unfortunate layers of society, by selling the food grains at lower cost when contrasted with market cost. This is known as Issue Price.

Sample Questions

Question 1: What is Minimum Support Price(MSP)? 

Answer:

The farmers are followed through on a preannounced cost for their harvests. This cost is called Minimum Support Price (MSP).

Question 2: What is the Public Distribution System(PDS)?

Answer:

The food obtained by the FCI is dispersed through government managed apportion shops among the more unfortunate part of the society. This is known as the Public Distribution System (PDS).

Question 3: Which organization is maintained the buffer stock in India?

Answer:

The FCI(Food Corporation of India) is the association through which food security is kept up with in the country. It keeps up with the support stock.

Question 4: What are the objectives of ration shops?

Answer:

To give the fundamental products at financed cost to the clients and to control cost of fundamental wares.

Question 5: For what reason is the acquirement of food grains done in India?

Answer:

The public authority secures food grains at pre-reported rice’s to give motivators to ranchers to raising the  production of yields. The food acquired by the public authority is distributed among the less fortunate segment of the society through air cost shops at sponsored costs.