Why in news
- The Centre initiated bulk retail liquidation of 1.21 lakh tonnes of onion buffer stock across 17 major cities to control price inflation.
Buffer Stock Operations and Logistics
- The Central Government maintains a strategic onion buffer stock under the **Price Stabilisation Fund (PSF)**.
- Procurement and distribution are managed by the National Agricultural Cooperative Marketing Federation of **India (NAFED) and National Cooperative Consumers' Federation of India (NCCF)**.
- Bulk supply from producing states to consuming regions is routed via dedicated rail rakes termed 'Kanda Express' alongside truck transport.
Price Intervention Mechanism
- Onions are liquidated at subsidized retail rates to prevent localized price spikes during the lean harvest season.
- Direct open-market release provides targeted relief without relying on blanket export bans or stock limits.
Why it Matters
- Demonstrates market-based intervention to curb food inflation and stabilize volatile perishable agricultural prices.
- Highlights the role of specialized agricultural logistics in connecting producer hubs directly to consumption centers.
Key terms
Price Stabilisation Fund
A Central fund established to manage price volatility of essential agri-horticultural commodities through strategic procurement and market release.
Buffer Stock
A reserve of a commodity used to offset price fluctuations and supply disruptions in the open market.
Prelims facts
- Price Stabilisation Fund covers essential commodities like onions, pulses, and potatoes under the Department of Consumer Affairs.
Mains discussion
- Analyze the effectiveness of buffer stock management and strategic freight logistics in mitigating food inflation.
Source: Business Standard
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