Scientific Disposal of Buffer Stocks in India – Part 3 of 3

Buffer Stock

In the first and second part of this series on ‘Scientific Disposal of Buffer Stocks in India’, we spoke about why India urgently needs a concrete, scientific and systematic disposal plan for buffer stocks.

As India’s leading e-Markets company for agri commodities, we strongly feel that the below action points can immensely help the government unshackle itself from the perennial issue of last-minute disposals of buffer stocks at uneconomical prices:

1. Well-defined Exports Strategy

At present, government-to-government deals of buffer stocks are primarily restricted to South Asian countries. A comprehensive, pre-planned Exports strategy with set targets and a dedicated on-ground team, would definitely help the government identify well in advance countries that have a latent demand for India’s buffer stocks. This would not only help the government address the issue of distress sale, but also release the blocked capital that can be used for furthering the cause of an agriculturally self-sufficient nation.

Use of an e-markets and services platform with no conflict of interest like NCDEX eMarkets Limited (NeML) should be encouraged to enhance the efficiency of the Exports strategy.

2. Quality Certified Lots, Proper Storage Controls and Preservations

Mandatory storage of quality certified lots right at the procurement stage is a pre-requisite for better price realization. Else, realizations are going to be lower than expected. Proper storage controls and preservations, including fumigation for the stored commodities, is the need of the hour.

3. Streamline the entire Value-Chain

From procurement, to storage, to disposals of buffer stocks, there are many participants in the complete value-chain. Sellers (Farmers / Aggregators), Buyers (Traders / Millers / Processors), Warehouse Service Providers, State Agencies for Public Distribution Systems (PDS), Mid-day Meals, etc. should be seamlessly interconnected with each other in order to streamline the entire process and bring in market efficiencies.

Summing up

In this three-part series, we endeavored to look at the entire buffer stock ecosystem and recommend certain steps that could help the government make it more streamlined and cohesive. While there are more questions that need answers in a complex environment like India, we do believe that incorporating these suggestions can be a step in the right direction.

Resources are limited, and efficient management of these resources can go a long way in making the most out of them.


One thought on “Scientific Disposal of Buffer Stocks in India – Part 3 of 3

  1. Sir ,
    Wr have short production of pulses and oilseeds . Why this occurs ? Due to the instability market. We export rice, premium oilseeds, doc, cotton. Which depend upon international market rates but pulses market are controlled by our india itself. There is no proper system to control it. Due to improper management pulses rate fluctuate. On one side govt selling under msp then how can farmer got reasonable rates ?
    Now you can see rates of gram moving upward due to speedy purchase of govt, it makes shortage and now price are above the msp in pvt markets also. This type of strategy should be accepted. We can take example of china where huge stock of cotton has been made and now he is selling without harming farmer’s interest.
    Govt should know that life span of pulses is more than 3 year hoto 5 year also. They are selling within one year this will bring most difficult crisis in future as supplying countries stopped production of it. Due to our unpredictable manasoon years to come with shoratge of pulses at that time there will be no option left for us.
    This type of long term thinking should be done otherwise farmer and customer both will suffer.

Leave a Reply