A buffer stock model to ensure price stabilization and availability of seasonal staple food by empowering producer using warehouse receipt system

Staple food that is produced by agro industry has salient supply disparity during the harvest and planting season. This situation could cause both staple food scarcity and price fluctuation. An indirect market intervention model is proposed to mitigate producer's revenue loss when selling price plunges and to secure consumer's need when staple food is scarce. The model uses buffer stock scheme in accordance with warehouse receipt system (WRS) and collateral management system. By using WRS, producer can pawn some of their staple food to the warehouse management and obtain receipt, then give the receipt to the Financial Institutions to access loan. Next, they can redeem their pawn and sell them under profitable price. Mixed-integer nonlinear programming (MINLP) approach has been used to determine the decision variables for producer and government. The result shows that the model can be used to solve problem.