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Government Intervention in Grain Markets in India: Rethinking the Procurement Policy

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  • Neha Gupta

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Abstract

This paper reviews the rice procurement operations of the Government of India from the standpoints of cost of procurement as well as effectiveness in supporting farmers’ incomes. The two channels used for procuring rice are custom-milling of rice and levy. In the first, the government buys paddy directly from farmers at the minimum support price (MSP) and gets it milled from private millers; while in the second, it purchases rice from private millers at a pre-announced levy price thus providing indirect price support to farmers. The paper analyse data from auctions of paddy from a year when levy was still important to investigate its impact on farmers’ revenues.

Suggested Citation

  • Neha Gupta, 2015. "Government Intervention in Grain Markets in India: Rethinking the Procurement Policy," Working Papers id:7810, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:7810 Note: Institutional Papers
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    References listed on IDEAS

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    16. Bhaskar Dutta & Bharat Ramaswami, 2004. "Reforming Food Subsidy Schemes: Estimating the Gains from Self-targeting in India," Review of Development Economics, Wiley Blackwell, vol. 8(2), pages 309-324, May.
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