Question

Main purpose of buffer stock is _____.

• A. To save food grains from pest attack
• B. To stop price fluctuations
• C. To meet the crisis of low production
• D. Both (b) and (c)

Answer 1

The correct option is D Both (b) and (c)

A buffer stock scheme is an attempt to use commodity storage for the purposes of stabilising prices in an entire economy or, more commonly, an individual (commodity) market. Specifically, commodities are bought when there is a surplus in the economy, stored, and are then sold from these stores when there are economic shortages in the economy.