In many developing countries the government has divided the grain market into two sectors: an open market and a government-run, concessional food supply system. The concessional system is a necessity where mass poverty exists; it makes it possible to provide a minimum food supply to the poor. In operating this system the policymakers face the problem of ensuring this supply at the least possible cost to the government.

This paper presents a model that can enable policymakers to solve this problem.