Choose the given statement as true/false:

A very high level of buffer stock is undesirable.

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True

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answer is A.

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Detailed Solution

The above statement is true.
Buffer Stock refers to the stock of food grains, particularly wheat and rice, which the government procures from the farmers through its statutory body, the Food Corporation of India (FCI). In times of surplus or excess production. The FCI then stores these grains in its granaries and warehouses. High buffer stocks are undesirable since they are wasteful and costly. Striking buffer stocks requires carrying costs like maintenance costs, taxes, insurance, etc. Also, it is seen that the food grains stored in FCI granaries are not managed appropriately, leading to deterioration in their quality due to rotting.

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