To achieve its strategic objective of food security, the Government of India (GOI) maintains an elaborate set of food grain policies which include public procurement and price support operations, price stabilisation through buffer stocks, public food grain distribution, and extensive controls on private trade. We use aggregate and household level evidence to show that this system is costly, generates inefficiencies in the food grain marketing system (for both the public and the private sector), and often offers few, if any, benefits to its intended beneficiaries, the poor. On this basis we propose an integrated reform agenda involving improvements in the targeting of the public distribution system, creation of an enabling environment for increased private participation in food grain markets and greater incentives for efficiency by the Food Corporation of India (FCI). © 2001 Elsevier Science B.V. All rights reserved.
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