What impact can the Centre's decision to sell toor dal from buffer stocks have on the agro-economy

Examine the effect of the Centre’s decision to sell toor dal from buffer stocks on the agro-economy in India.
The Centre’s decision to sell toor dal from buffer stocks could have the following impact on the agro-economy in India:
  • Decrease in prices: The availability of toor dal from buffer stocks could lead to a decrease in prices, as supply increases. This could be beneficial for consumers, who could purchase the dal at a lower cost, but could negatively affect farmers who may receive a lower price for their produce.
  • Reduction in storage costs: With the sale of toor dal from buffer stocks, the government can reduce storage costs, as the dal would no longer need to be stored in the buffer stock. This could help save storage costs, which can be reinvested into other agro-economic initiatives.
  • Relief for consumers: With the decrease in prices, consumers can have access to affordable toor dal. This could help to alleviate concerns over the high cost of food and provide relief to those who are struggling to make ends meet.
  • Impact on farmers: With the decrease in prices, farmers may receive less remuneration for their produce. While lower prices can help increase demand for the product, this could hurt the bottom line of farmers if prices remain low in the long-term.
  • Stabilization of the market: The availability of toor dal from buffer stocks could help to stabilize the market, as the government can ensure that enough supplies are available, thereby preventing price fluctuations.
Overall, while the sale of toor dal from buffer stocks could benefit consumers and help reduce storage costs for the government, it could have mixed effects on farmers depending on how prices are affected in the market.
Answered a year ago
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