comprehensive scheme for the procurement and public distribution of cereals for the country as a whole. The reasons for such a scheme to concentrate on the distribution of cereals are quite obvious; not only do cereals provide more than half the calories in the average Indian diet but also they account for three-fourths or more of whatever calories persons in the low income groups are able to garner .each day. As the National Cominission on Agriculture says; "Considering that a substantial portion of the Indian population today subsists below the line of poverty, it should be a national obligation to take care of those who are at the subsistence level or below, particularly in difficult years. This should be the most important aspect of public policy. The only way of protecting the vulnerable sections front the impact of rising prices and inflation is to provide th food grains through public distribution, or, if this cannot be the foodgrains prices sufficiently low".1 In this paper, we have attempted to work out, first, the magnitude of cereals required for public distribution if the vulnerable groups of population are to be protected from price rise; second, the equitable manner in which that quantity can be procured internally; and, finally, the various policy implica tions which would follow from the adoption of such a scheme on public distribution and procurement of cereals.