BUFFER STOCK Meaning and
Definition
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A buffer stock refers to a reserve or surplus of a particular commodity that is held by the government or a regulatory body to stabilize prices and prevent extreme fluctuations in supply and demand. The primary purpose of a buffer stock is to smoothen market imbalances and maintain stability within the economy.
The concept of buffer stock is commonly applied to agricultural commodities, including grains, pulses, or other agricultural produce. By establishing a buffer stock, the government aims to protect farmers' incomes, stabilize consumer prices, and ensure food security. During surplus seasons, the government purchases excess production from farmers, thereby providing them a fair price and preventing the market from becoming flooded with the commodity. Conversely, during times of scarcity, the buffer stock is utilized to release and distribute the stored commodity, preventing prices from skyrocketing and ensuring a continuous supply to meet consumer demand.
Buffer stocks are characterized by their role in stabilizing prices, mitigating price volatility, and reducing the impact of market shocks. They act as a cushion, absorbing excess supply or demand fluctuations, preventing extreme price movements, and maintaining a balanced market. In essence, buffer stocks aim to strike a balance between the interests of producers and consumers, ensuring a steady flow of goods and promoting economic stability.
Common Misspellings for BUFFER STOCK
- vuffer stock
- nuffer stock
- huffer stock
- guffer stock
- byffer stock
- bhffer stock
- bjffer stock
- biffer stock
- b8ffer stock
- b7ffer stock
- budfer stock
- bucfer stock
- buvfer stock
- bugfer stock
- butfer stock
- burfer stock
- bufder stock
- bufcer stock
- bufver stock
- bufger stock
Etymology of BUFFER STOCK
The word "buffer" comes from the Old French word "buffe", meaning "blow" or "punch". It was derived from the Old High German word "buffen", which means "to beat". Over time, the word "buffer" came to refer to a device or material used to absorb shock or protect against impact.
The term "stock" is derived from the Old English word "stoc" and is related to the Old High German word "stock", both meaning "tree trunk" or "wooden stick". In a broader sense, "stock" refers to a supply or accumulation of something.
When combined, the term "buffer stock" refers to a supply of goods, commodities, or materials held in reserve to act as a buffer against possible shortages or price fluctuations.
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