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The paper is organized into six major sections. Background and trends in agricultural production and trade are presented in Section II. The extent of government intervention in food grain production and trade is described in Section III. This provides a foundation for Section IV where the behavioral equations for defining government intervention in food grain markets are specified. These equations, along with the retail demand and farm level supply equations, yield six equations in six endogenous variables for each of the food grain crops, maize, wheat and rice. It is shown in Section V that the model provides a good fit to the data. In the concluding sections, simulations are performed to obtain insights into the effect on and motivation for government intervention in food grain markets. |
