Model Answer
0 min readIntroduction
Buffer stocks are a crucial component of India’s food security system, representing a reserve of food grains procured from farmers. Established in the 1960s following food shortages, the system aims to ensure food availability throughout the year and stabilize agricultural prices. The Food Corporation of India (FCI) is the primary agency responsible for procuring, storing, and distributing these stocks. Recent concerns regarding overflowing godowns, wastage, and the financial burden of maintaining these stocks highlight the need for a critical evaluation of the system’s efficacy and associated challenges.
Importance of Buffer Stocks in Stabilizing Agricultural Prices
Buffer stocks play a pivotal role in stabilizing agricultural prices in India through several mechanisms:
- Price Support: During harvest season, when prices tend to fall due to oversupply, the government procures grains at Minimum Support Prices (MSPs), preventing distress sales by farmers. This ensures farmers receive a remunerative price for their produce.
- Availability during Scarcity: During lean seasons or times of drought/famine, buffer stocks are released into the market through the Public Distribution System (PDS) and other welfare schemes, ensuring food availability and preventing price spikes.
- Demand-Supply Balance: Buffer stocks help regulate the demand-supply dynamics of essential food grains, mitigating price volatility.
- Inflation Control: By releasing stocks when prices rise, the government can curb inflationary pressures, particularly for essential commodities.
The MSP-procurement-buffer stock system has been instrumental in transforming India from a ‘ship-to-mouth’ situation to a food-surplus nation, particularly in wheat and rice. However, this success has also created its own set of challenges.
Challenges Associated with the Storage of Buffer Stock
Quantitative Challenges
These relate to the sheer volume of stocks and the capacity to store them:
- Storage Capacity Constraints: India faces a chronic shortage of adequate covered storage capacity. As of 2023 (knowledge cutoff), the total covered storage capacity was estimated at around 75.62 million tonnes, while buffer stock requirements often exceed this capacity.
- Godown Infrastructure: Many existing godowns are outdated, lack proper ventilation, and are prone to damage from pests and natural disasters.
- Geographical Imbalance: Storage facilities are not evenly distributed across the country, leading to logistical bottlenecks and increased transportation costs.
Qualitative Challenges
These relate to maintaining the quality of stored grains:
- Grain Deterioration: Prolonged storage can lead to deterioration in grain quality due to insect infestation, fungal growth, and moisture content. This results in wastage and reduces the nutritional value of the grains.
- High Wastage: Significant quantities of food grains are lost annually due to improper storage, handling, and transportation. According to a 2019 report by the National Institute of Post-Harvest Loss Reduction, approximately 5% of food grains are lost post-harvest due to inadequate storage.
- Transportation Issues: Inefficient transportation infrastructure and delays in movement contribute to grain damage and wastage.
- Financial Burden: Maintaining buffer stocks incurs substantial costs, including procurement, storage, transportation, and wastage. This puts a strain on the government’s finances.
Recent Developments & Challenges
The recent increase in procurement, particularly during the COVID-19 pandemic, has exacerbated the storage challenges. Overflowing godowns have forced the FCI to store grains in open areas, exposing them to the elements and increasing the risk of damage. The debate around revising MSPs and diversifying procurement towards other grains (like millets) is gaining momentum to address these issues.
| Challenge Type | Description | Impact |
|---|---|---|
| Quantitative | Insufficient storage capacity | Overflowing godowns, open storage, increased wastage |
| Qualitative | Grain deterioration & wastage | Reduced nutritional value, financial losses, food insecurity |
| Financial | High storage & maintenance costs | Strain on government budget, reduced funds for other welfare schemes |
Conclusion
Buffer stocks remain a vital instrument for ensuring food security and stabilizing agricultural prices in India. However, the current system faces significant challenges related to storage capacity, grain quality, and financial sustainability. Addressing these challenges requires a multi-pronged approach, including investing in modern storage infrastructure, promoting efficient transportation networks, diversifying procurement strategies, and exploring alternative storage solutions like decentralized storage systems. A shift towards a more efficient and sustainable buffer stock management system is crucial for ensuring long-term food security and supporting the livelihoods of Indian farmers.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.