Government Intervention - Buffer Stock Schemes

Despite the chequered history of price support schemes aimed at primary sector producers, this remains a policy option used by a number of governments, most of whom are in developing / emerging countries.

This is a topic that can require some tricky diagrams to show how a price stabilisation scheme can reduce the volatility of market prices. But once you have these diagrams well understood, buffer stock programmes offer great opportunities for evaluation. We have included a slide on some of the alternatives to direct price support.

Consider what is likely to be best in the long run for producers and consumers. Always look to understand the specific context of the market being tested.