PDS is the world’s largest food transfer programme and social safety net, accounting for around 50% of India’s overall social assistance budget. Buffer Stock is the foundational pillar of this system.
Buffer Stock Norms
Introduced during the 4th Five Year Plan (1969-74).
Fixed by cabinet committee on Economic Affairs on quarterly basis
In 2025, rice and wheat stocks in Central Pool stands at 736 Lakh MT against buffer stock norm of 411 Lakh MT
Importance of Buffer Stocks for Stabilising Agricultural Prices in India
Supports farmers through MSP procurement: Prevents distress sales during bumper harvests.
Controls consumer prices through Open Market Sale Scheme. Eg- In 2022-23, FCI released 34.82 lakh tonnes of wheat.
Ensures food security: ensures uninterrupted supply for NFSA, ICDS, PM-POSHAN (Cover 81 crore people)
Checks hoarding: Strategic release of stocks curbs artificial scarcity and black-marketing. Eg- Release of Pulses by NAFED
Acts as a safety net during supply disruptions and emergencies. Eg- during COVID.
Inter-state distribution stability: Ensures consistent supply to deficit states.
Market confidence: Adequate stocks signal stability and prevent panic buying
Export of extra produce: Eg- Surplus wheat from buffer stocks was exported to Africa in 2021
Challenges Associated with the Storage of Buffer Stock
Excessive stocking by FCI increases carrying costs. Eg- Central pool rice stocks 4 times the buffer
Heavy reliance on CAP (cover-and-plinth) storage leads to high wastage. (40% of total food)
High transport costs due to concentration of procurement in limited states. Eg- 60% godowns in 5 states.
Overstocking results in rotting and quality deterioration. Over 6 lakh tonnes of foodgrains rotted in FCI godowns
High Storage Cost – Eg- FCI’s annual storage cost for buffer stocks reached
Pilferage and Theft due to poor security measures and leakages in the distribution network.
Regional procurement imbalances: Eg- Eastern and NE states remain under-procured
Lack of Modern Technology – lack silos, temperature control, and humidity monitoring. Only 20% of buffer stock stored in modern silos
Environmental concerns: Excess procurement of rice strains groundwater, fertiliser use, and stubble burning.
Way Forward
Technological Integration: Eg- blockchain for transparent and secure buffer stock management.
Expansion of modern silos equipped with temperature and humidity control. (Shanta Kumar Committee)
Rural Agri-Logistics Nodes under Gati Shakti Framework to develop cold chains, aggregation centers
Expanding FCI Private Entrepreneurs Guarantee (PEG) Scheme to involve the private sector in creating modern godowns.
Revision of Buffer Stock Norms based on actual requirement and demand patterns. (Ashok Gulati Committee)
Strengthening storage is essential for a more efficient, resilient grain management system.