The Unsupportable Support Price : The Government in Paddy Auctions of Northern India

In consonance with the global trend of redefining the role of the government in developing and transition economies from producer to facilitator, there is today a lively debate in India on government intervention in grain markets, in the form of procurement and distribution of foodgrain. The role of the government in instituting regulated wholesale grain markets, with clearly spelled out rules of exchange and a transparent price formation process, is however less well known, compared to its roles of procurer and distributor of grain. The present paper studies such a regulated market for parmal paddy in the state of Haryana in North India, with a view to address several objectives.[Working Paper No. 94: 2001]