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Economic Development - Do Buffer Stocks Work?

This revision video looks at the advantages and limitations of buffer stocks as a strategy to stabilise prices and support incomes for farmers in poorer countries. A buffer stock scheme is a mechanism designed to stabilise the price and supply of a commodity, usually a raw material or agricultural product. It involves the creation of a stockpile, or buffer stock, of the commodity during times of high supply, which can be used to regulate the market during periods of low supply. The buffer stock scheme operates by buying excess supply of the commodity when the market is oversupplied, and then releasing it (off-loading) into the market when supply falls short. This helps to prevent price fluctuations and ensures a steady supply of the commodity. The buffer stock can be owned and managed by the government, a central agency, or a group of producers or traders. #edexceleconomics #ibeconomics #aqaeconomics