Description

State purchasing, e.g. of new, nutritionally valuable foods, helps diversify supply and demand. As farmers, food businesses, trade and consumers are often slow to accept new products, the state can make up for the lack of demand in the short term. Nutritional advice can be an important driving force behind new products.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• State intervention agency to buy the products
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Close cooperation and knowledge sharing with farmers' organisations
• Compatible regional and world trade law (WTO conformity)
• Constant market surveying and forecasting
• Logistics and storage facilities
• Monitoring and control system for the agricultural production processes supported
• Regional and / or national regulations on storage conditions
• Regulated and legally protected payment structures
• Skilled / specialised personnel to man the respective institutions / provide the respective services

Possible Negative Effects

• Distorts the domestic market
• Free rider effects in markets that are growing anyway
• Bad investments by the state if demand does not pick up
• Corruption at purchase