What is buffer stock? Explain.

A buffer stock is a system in which government of India procures good grains from farmers when production level is high to ensure that the prices of food grains do not go so low that farmers incur a loss. It also helps in ensuring the availability of food grains even if farmers are unable to grow the required level of food grains in a particular year. It prevents the prices rising above a level in case of bad harvests are experienced by the country. It also protects the food grains from being wasted. The concept of buffer stock was first introduced during the fourth Five Year Plan. The government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.