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Is buffer stock created by the government?

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Detailed Solution

Yes, the above statement is true.
Food Corporation of India, on behalf of the government, purchases wheat and rice for buffer stock (FCD). In states where there is a surplus of supply, the FCI buys wheat and rice from the farmers. Granaries are where the purchased grains for food are kept. As a result, the government develops a buffer stock to provide these food grains at a lower cost than the market price to the underdeveloped regions and the lower echelons of society. In times of bad weather or during a time of disaster, buffer stock also aids in addressing the issue of food shortage.

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