Elucidate the importance of buffer stocks for stabilizing agricultural prices in India. What are the challenges associated with the storage of buffer stock? Discuss. (Answer in 250 words)

Introduction

Buffer stocks, principally maintained through public procurement, moderate price volatility and support food security.

Importance

• Releasing grain through PDS or open-market operations protects consumers during shortages and inflation.
• Procurement supports farmers with price assurance, enables welfare schemes and creates emergency reserves.

Storage challenges

• Excessive cereal stocks cause carrying costs, quality deterioration, pests, leakages and fiscal burden.
• Concentration in a few crops and States distorts cropping patterns and depletes groundwater.
• Expand silos and scientific storage, decentralise procurement, improve stock rotation, diversify toward pulses and millets, and use transparent demand-based norms.

Keywords: FCI, MSP, PDS, open-market sale, buffer norm, food security.