4.3.3 Buffer Stock Schemes (Edexcel A-Level Economics Teaching PowerPoint)

This teaching powerpoint for Edexcel Economics covers Buffer Stock Schemes

A buffer stock scheme, also known as a price stabilization scheme, is a government program that aims to stabilize the price of a commodity by buying it when the price is low and selling it when the price is high. The goal of a buffer stock scheme is to smooth out fluctuations in price, which can protect both producers and consumers from volatility in the market. Here's how it works:

• When the price of a commodity falls below a certain level, the government buys up the surplus stock and stores it.
• When the price rises above a certain level, the government releases the stored stock onto the market, increasing supply and pushing the price back down.

Buffer stock schemes are often used for agricultural products, such as grain, milk, or sugar, which are prone to price fluctuations due to weather and other factors.