Elucidate the importance of buffer stocks for stabilizing agricultural prices in India. What are the challenges associated with the storage of buffer stocks? Discuss. (250 words)
Buffer stocks, maintained by the government, ensure food security and stabilize agricultural prices in India. In 2023, India’s buffer stock stood at around 60 million tonnes, playing a crucial role in price stabilization.
Importance of Buffer Stocks for Stabilizing Agricultural Prices:
- Price Stabilization: Buffer stocks regulate prices by releasing grains during shortages and absorbing excess during surplus, preventing sharp fluctuations.
- Food Security: They ensure availability during disasters, crop failures, or pandemics, as seen during COVID-19, preventing a food crisis.
- Support to Farmers: The Minimum Support Price (MSP) offers farmers a guaranteed price, reducing the risk of distress sales and ensuring stable income.
- Inflation Control: Releasing stocks during high inflation helps control food prices, as observed in the wheat price surge of 2022.
- Public Distribution System (PDS): Buffer stocks supply the PDS, ensuring affordable food to vulnerable sections, fulfilling the National Food Security Act (2013).
Challenges Associated with the Storage of Buffer Stocks:
- Inadequate Storage Infrastructure: India’s storage capacity, around 91 million tonnes in 2022, is insufficient, causing wastage and spoilage.
- High Wastage: Approximately 10% of grains are wasted annually due to poor storage, according to the Food Corporation of India (FCI).
- Financial Burden: Maintenance costs ₹1.6 lakh crore annually (2023), posing a significant financial challenge.
- Inefficient Management: Issues like pilferage and outdated technology hinder efficient management.
- Quality Degradation: Long storage periods lead to quality deterioration, affecting grain value.
Conclusion: Investing in modern storage facilities, better management, and technology integration is crucial for optimizing buffer stocks’ role in stabilizing agricultural prices.
![Prabhat was working as Vice President (Marketing) at Sterling Electric Ltd., a reputed multinational company. But presently the company was passing through the difficult times as the sales were continuously showing downward trend in the last two quarters. His division, which hitherto had been a major revenue contributor to the company’s financial health, was now desperately trying to procure some big government order for them. But their best efforts did not yield any positive success or breakthrough. His was a professional company and his local bosses were under pressure from their London-based HO to show some positive results. In the last performance review meeting taken by the Executive Director (India Head), he was reprimanded for his poor performance. He assured them that his division is working on a special contract from the Ministry of Defence for a secret installation near Gwalior and tender is being submitted shortly. He was under extreme pressure and he was deeply perturbed. What aggravated the situation further was a warning from the top that if the deal is not clinched in favour of the company, his division might have to be closed and he may have to quit his lucrative job. There was another dimension which was causing him deep mental torture and agony. This pertained to his personal precarious financial health. He was a single earner in the family with two school-college going children and his old ailing mother. The heavy expenditure on education and medical was causing a big strain to his monthly pay packet. Regular EMI for housing loan taken from bank unavoidable and any default would render him liable for severe legal action. In the above backdrop, he was hoping for some miracle to happen. There was sudden turn of events. His Secretary informed that a gentleman Subhas Verma wanted to see him as he was interested in the position of Manager which was to be filled by him in the company. He further brought to his notice that his CV has been received through the office of the Minister of Defence. During interview of the candidate-Subhash Verma, he found him technically sound, resourceful and experienced marketeer. He seemed to be well-conversant with tendering procedures and having knack of follow-up and liaising in this regard Prabhat felt that he was better choice than the rest of the candidates who were recently interviewed by him in the last few days. Subhash Verma also indicated that he was in possession of the copies of the bid documents that the Unique Electronics Ltd. would be submitting the next day to the Defence Ministry for their tender. He offered to hand over those documents subject to his employment in the company on suitable terms and conditions. He made it clear that in the process, the Sterling Electric Ltd. could outbid their rival company and get the bid and hefty Defence Ministry order. He indicated that it will be win-win situation for both-him and the company. Prabhat was absolutely stunned. It was a mixed feeling of shock and thrill. He was uncomfortable and perspiring. If accepted, all his problems would vanish instantly and he may be rewarded for securing the much awaited tender and thereby boosting company’s sales and financial health. He was in a fix as to the future course of action. He was wonder-struck at the guts of Subhash Verma in having surreptitiously removing his own company papers and offering to the rival company for a job. Being an experienced person, he was examining the pros and cons of the proposal/situation and he asked him to come the next day. (a) Discuss the ethical issues involved in the case. (b) Critically examine the options available to Prabhat in the above situation. (c) Which of the above would be the most appropriate for Prabhat and why? [2022]](https://www.iasexpress.net/wp-content/plugins/pt-content-views-pro/public/assets/images/lazy_image.png)
