India’s Food Grain Policies and the Public Distribution System: The Case of Rice. Who Wins, Who Loses, and by How Much?

Indian governments follow highly interventionist policies on food grains, especially rice and wheat. These policies include import and export controls which insulate the domestic market from world markets, a minimum support price (MSP) program which supports and controls domestic wholesale prices, large farm input subsidies, and consumer subsidy programs which provide rice and wheat through about half a million “fair price shops” to low income (below the poverty line-BPL) consumers at very low controlled prices. this paper simulates the effects of various combinations of the following: abolition of the MSP regime, abolition of the TPDS, and opening of the market to exports by the private sector.