1.

What is buffer stoff why was is created by government

Answer»

Buffer stock is the reserve of food or other commodities that can be used later on during emergency conditions.

Explanation:

  • There are two MAIN reasons why buffer stocks are created by the government.
  • First, it is created so that the government has some reserve of food during the time of emergency like wars, or other natural calamities.
  • Second, it is helpful in regulating the PRICE of commodities in the market.
  • These stocks are created when there is a SURPLUS food or commodity, this huge quantity of that commodity can make the price in the market drop and farmers WOULD not be able to profit from their produce.
  • So, the government buys the surplus from the farmers, create a buffer stock and then steadily releases these commodities which maintains its  price in the market, neither MAKING it expensive or cheap.


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