Buffer stock is the stock of food grains, particularly wheat and rice, which the government procures through the Food Corporation of India (FCI). The Food Corporation of India purchases these cereals (what and rice) directly from the farmers of those states where they are in surplus. The price of these commodities is fixed much before the actual sowing season of the crops. This price is known as the Minimum Support Price which is announced to give incentive to the farmers for raising the production of food crops. The food grains thus purchased by the FCI are kept in big granaries.
This is called a buffer stock.
Why is this Buffer Stock created by the Government ? Now a question arises as to why this buffer stock is created by the government ? Some of the main reasons for the same are the following :
(i) The first region for this is that to revolve the problem of shortage of food arising due to adverse weather conditions like drought or too much of rains.
(ii) This is done to face the shortage of food in any part of the country which si affected by any calamity such as tsunamis, earthquakes, cyclone, storms or famine etc.
(iii) This stock is also used to help the poor strata of the society at a price lower than the market price.
(iv) This stock helps a lot in distributing food grains in different areas.
