2.2. Buffer Stock Policy of India

The concept was introduced in the fourth five year plan (1969-74), and a buffer stock of food grain was to be maintained by FCI on behalf of the Government of India to meet the monthly release of food grains for supply through PDS (Targeted Public Distribution System, TPDS and Other Welfare Schemes (OWS) to meet emergency situations arising out of unexpected calamities such as crop failure, natural disasters, etc. and for market intervention to augment supply in case of deficit production of food grains, so that, the open market prices get moderated.

Buffer norms are fixed by CCEA (Cabinet committee on Economic Affairs chaired by PM) on quarterly basis as on 1st April, 1st July, 1st October, and 1st January of every financial year. The buffer norms have been revised in January 2015.

Operational stock = Stocks earmarked for TPDS + OWS and Food security stocks/reserves.

In addition to the buffer norms, a strategic reserve of 30 lakh tonnes of wheat and 20 lakh tonnes of rice is also maintained. This stock is termed as Food Grain Stocking Norms.

Food grain stocking norms refers to the level of stock in the central pool that is sufficient to meet the operational requirements of food grains i.e. for distribution under Targeted Public Distribution System TPDS, Other Welfare Schemes (OWS) and exigencies at any point of time. Earlier this concept was termed as Buffer Norms and Strategic Reserves. The Buffer norms of food grains in the central pool have been revised in 2015 and Cabinet Committee on Economic Affairs, CCEA has approved that in case the stock of food grains is more than the revised buffer norm, the Department of Food and Public Distribution will offload excess stock in the domestic market through open sale or through exports.