: a stock of a basic commodity (such as tin) acquired (as by a cartel) in a period of low or unstable prices and distributed in a period of high prices to stabilize the market.

What do you mean by buffer stock example?

Buffer stock system can be learned as a government scheme that is used for the purpose of stabilizing prices in a volatile market. ... Genesis wheat stores, ever-normal granary, EU cap, International cocoa Organization (ICCO), and 1970 wool floor price scheme Australia are few examples of a buffer stock scheme.

Is buffer stock good?

Advantages of buffer stocks

Stable prices help maintain farmers incomes. A rapid drop in prices can make farmers go out of business, which leads to structural unemployment. Price stability encourages more investment in agriculture. Farming can have positive externalities e.g. helps rural communities.