Strategic reserve
Also called: Food security reserve · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT
Meaning
The strategic reserve (also called the food security reserve) is extra foodgrain kept in the central pool for emergencies. Examples are crop failure, drought or disaster. It is held on top of the operational stock used for regular PDS needs. Together, the two make up the buffer stock norms (in force since January 2015), which are checked on the first day of each quarter. The reserve ensures the country does not run short of grain in a bad year.
Example
Suppose a drought cuts the wheat harvest sharply. The government can release grain from the strategic reserve to keep PDS supplies going and stop prices from rising steeply.
Don't confuse with
- Operational stock: operational stock covers routine monthly distribution. The strategic reserve is only for shocks.
Related concepts
- Procurement
- Buffer stock
- Buffer stock norms
- Operational stock
- Open-ended procurement
- Centralised procurement
- Decentralised procurement
- Price support scheme
- Price deficiency payment
- Market intervention scheme