The buffer stock policy aims to stabilize food prices in the market by regulating the supply of essential commodities. Here's how it works: 1. Creation of buffer stock: The central government procures and stockpiles surplus food commodities, such as toor dal, during times of good harvest or low prices. 2. Selling from buffer stock: When the price of the commodity starts to rise, the government intervenes by selling the stored stock into the market. This increases the supply, putting downward pressure on prices. 3. Price stabilization: By releasing buffer stock into the market, the government aims to bring prices down to a more affordable level for consumers. 4. Management of demand-supply dynamics: Buffer stock acts as a safety net to address fluctuations in production. It helps manage the demand-supply dynamics, ensuring a steady availability of essential food items. 5. Market signals: The government's decision to sell from buffer stock is triggered by monitoring market conditions and price movements. It helps prevent hoarding and speculative activities, facilitating a balance in supply and demand. Overall, the buffer stock policy helps stabilize food prices by addressing market imbalances and ensuring the availability of essential commodities at reasonable prices.