Issues Of Buffer Stocks

By BYJU'S Exam Prep

Updated on: September 13th, 2023

Buffer stock is a pool of certain commodities (like rice, wheat, etc) maintained by Government to fulfil Food security and tackling unforeseen emergencies. Food stocks Buffering was first introduced in 1969 under the 4th five-year plan. The government set up Food Corporation of India under the Food Corporation Act 1964, with hopes to achieve objectives of the government’s food policy. Currently, National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) etc on behalf of government procure and manage the buffer stock.


  1. Buffer stocks are maintained for ensuring availability of food to every citizen under stressful and difficult political, socioeconomic, as well as natural situations thus ensuring Food Security in India.
  2. Tackling unforeseen emergency like international price volatility, crop failure, natural disaster etc 
  3. Smooth implementation of Public distribution Schemes and other welfare schemes
  4. Price stabilization in open market
  5. Effective price support operations for safeguarding the farmers’ interests.


  • Buffer stock is important for Food self-sufficiency and Security. Buffer stock bring resilience to crop failure, flood, drought, wars and other natural calamities 
  • Keep food inflation in check via procurement of excess commodity and release when prices are soared.
  • Bring Food Security via availability, accessibility, utilisation and stability of basic need of human across all geographical location.
  • Supporting farmers in both situations:
  1.  Not slumping the price in case of excess production 
  2.  Realising true price via MSP 
  • Buffer stock helps in the prediction of base stock and required stock for implementing various government schemes.
  • Also, such prediction helps in forming policies and decision making for import-export of commodities.


  • Food being perishable products cannot be stored for too long. Hence if not rotated properly, it will result in wastage.
  • The stocks level is too high in relation to the buffer stock standards which are resulting in huge cost in terms of storage, interest on the value of produce, and wastage.
  • Foreign countries like the USA consider buffer stock as trade-distorting practices and drag India to WTO 
  • According to some economist, prices can be stabilized through trade rather than stocks and the trade is found to be much cheaper than stocking.
  • Integrating Buffer stock with MSP will result in excess procurement of commodity and this leads to over-production which causes excess that does not only affects the economy but also the environment. 
  • There is a high cost of logistics and administration. With the majority of funds allocated to buy stocks, it becomes troublesome for the Agricultural Ministry and FCI to adjust the budget to make everything available for efficient establishment and working of buffer stock units. The challenges are further extended to operational limitations.
    • Dual failure – Spoilage: Huge quantities of stocks are spoilt due to non-scientific storage methods and at the same time, a large percentage of the population is dying of hunger in India.
    • Warehousing: Lack of space and infrastructure for food grains storage after procurement.
    • Wastage: Due to open storage, rodents, climate change and delay in administration, poor supply chain management.
    • Transportation: Problems like Huge cost, Spilling and spoilage at the time of transportation.
    • Diversion: Foodgrains get diverted to black markets, Liquor production, Ghost beneficiaries etc.
    • Balancing problem: not a proper prediction for overall buffer stock requirement for emergency and PDS 

How to Overcome?

According to Shantakumar committee, 

  • Putting state in charge of Procurement system supplementing their affords via various schemes like PM-ASHAA, TOPs.
  • Centre government should accelerate the implementation of NFSA in states via end to end computerization; Biometric verification and physical uptake of commodity, eliminating ghost of beneficiaries and set up vigilance committees to check pilferage from PDS.
  • The government should bring down beneficiaries from to 40% from 67% at present.
  • FCI should outsource its stocking operations to various agencies such as Central Warehousing Corporation, State Warehousing Corporation, and Private Sector under Private Entrepreneur Guarantee (PEG) scheme, and even state governments. 
  • Storage facilities, transportation etc facilities should be enhanced via PM – SAMPADA like schemes. 


  1. Buffer stock in terms of food security provides secure and viable access to food. Therefore reducing hunger alongside poverty is a long-run interest of the socio-economic development of the country.
  2. Integrating Buffer stock with TPDS, ration and fair price shop, MSP, mid-day meal scheme, natural calamity relief, integrated Child Development Services, SC/ST and tribal hostel etc bring vulnerable sector food security. Thus fulfilling the constitutional and moral obligation of the holistic development of society.
  3. The efficiency in Operation Management of buffer stock will bring economies of scale between social, economic and constitutional obligation. The latest technology, prudent supply chain management and infrastructure development will bring down the cost of buffer stock. 

Other Facts 

  1. The UN-India has estimated that almost 195 million people in India are malnourished.
  2. The World Food Security Index ranked India at 74th position out of 113 major nations of the world. The average protein intake in India is only around 20% of the required protein nourishment.
  3. As per FCI recent reports, India held a food grain stock of 46 million tonnes as on October 1 2017, which is 53% higher than the buffer norm.
  4. As per the latest buffer norms reform of 2015, current capacities include 41.1 million tonnes of wheat and rice on July 1 and 30.7 million tonnes on October 1 every year.
  5.  Food security has 3 important aspects which include food availability, food accessibility, and absorption of food.


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