Foodgrain price stabilization: Implications of private storage and subsidized food distribution

Through simulation exercises, this paper explores the implications of private storage and subsidized distribution of foodgrain for price stabilization policies in India. A multi-market equilibrium approach is used to incorporate the simultaneity in the determination of supply and demand for the three major cereals, namely, rice, wheat, and coarse cereals. The policy implications of the results obtained are relevant to the current debate on agricultural policy reforms in India.