1. Use of Buffer Stock as a Means of Stabilising Prices
... there is an excess supply of Q2Q3. In the case of wheat, when free market price is below the intervention price, the buffer stock agency that is funded by the government will buy in the wheat (which is called the buffer stock) and when the free market price goes above the intervention price, they will resell the wheat and therefore push down the price down to the intervention price. Buffer stock schemes are not very common ... because they take a considerable amount of capital to set up. However, it usually doesnt work like the way it was meant to work because since producers generally ...
- Word Count: 568
- Approx Pages: 2
- Grade Level: High School