Roadmap for Answer Writing

Introduction

1. Define Buffer Stocks: Briefly explain what buffer stocks are and their purpose in agricultural economics.
2. Context in India: Mention the significance of buffer stocks in the Indian agricultural landscape.

Importance of Buffer Stocks for Stabilizing Agricultural Prices

1. Price Stabilization:
   • Mechanism: Explain how buffer stocks help in controlling price fluctuations by releasing stocks during shortages and purchasing during surpluses.
   • Example: Cite the role of the Food Corporation of India (FCI) in maintaining buffer stocks.
2. Food Security:
   • Role in Ensuring Availability: Discuss how buffer stocks ensure a steady supply of essential commodities, contributing to food security.
   • Fact: According to the Ministry of Consumer Affairs, buffer stocks have been essential in mitigating hunger during crises (Source: Ministry of Consumer Affairs, Government of India).
3. Support for Farmers:
   • Income Stability: Describe how buffer stocks can help stabilize farmers’ incomes by providing a guaranteed market for their produce.
   • Fact: The MSP (Minimum Support Price) mechanism is linked to buffer stocks, ensuring farmers are compensated fairly (Source: Government of India, MSP Report).

Challenges Associated with the Storage of Buffer Stocks

1. Infrastructure Issues:
   • Storage Facilities: Discuss the inadequacy of storage facilities leading to wastage.
   • Fact: Approximately 20-30% of food grains are lost due to poor storage conditions (Source: National Institute of Nutrition).
2. Quality Maintenance:
   • Degradation of Stocks: Explain how improper storage affects the quality of grains, leading to spoilage.
   • Fact: Studies indicate that quality deterioration occurs within six months if grains are not stored properly (Source: Food and Agriculture Organization).
3. Financial Constraints:
   • Cost of Storage: Discuss the financial burden on the government for maintaining buffer stocks and storage facilities.
   • Fact: The cost of maintaining buffer stocks could range from 10-15% of the total food grain procurement cost (Source: Economic Survey of India).

Conclusion

1. Summary of Importance: Recap the vital role of buffer stocks in stabilizing agricultural prices and ensuring food security.
2. Call for Improvement: Suggest the need for enhanced infrastructure, better quality control measures, and efficient financial management to overcome challenges.

Relevant Facts (with Sources)

1. Buffer Stock Role: “Buffer stocks have been essential in mitigating hunger during crises.” (Source: Ministry of Consumer Affairs, Government of India).
2. MSP Linkage: “The MSP mechanism is linked to buffer stocks, ensuring farmers are compensated fairly.” (Source: Government of India, MSP Report).
3. Food Wastage: “Approximately 20-30% of food grains are lost due to poor storage conditions.” (Source: National Institute of Nutrition).
4. Quality Degradation: “Quality deterioration occurs within six months if grains are not stored properly.” (Source: Food and Agriculture Organization).
5. Cost Implications: “The cost of maintaining buffer stocks could range from 10-15% of the total food grain procurement cost.” (Source: Economic Survey of India).

This roadmap provides a structured approach to answer the question effectively while incorporating relevant facts to support your arguments.