Buffer stock systems

A system of price controls used in a nation by which the government intervenes to keep the price above a minimum and below a maximum. Usually used in markets for agricultural commodities which can be stored for long periods of time. If the market price falls below a minimum level, the government will come in to buy up any surpluses, which get put into storage. If the price rises above a maximum level, the government will release its buffer stocks to keep the price low. Meant to assure stable prices to farmers and consumers of key food commodities.

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