The government raised the procurement price for paddy last week, from Rs 645 per quintal for common varieties to Rs 850 per quintal. Under normal circumstances, this would have been seen as a pretty substantial increase, being almost 32 per cent, but it turned out to be less than the 55 per cent increase that the Commission of Agricultural Costs and Prices had recommended, taking the proposed price to Rs 1,000 per quintal. From a strictly economic perspective, the government's decision to split the difference does have significant merits. Unlike in the case of wheat, paddy stocks had not dwindled to a level which could trigger the kind of expectations-induced price surge that was seen in wheat in 2007. The ups and downs of wheat prices over the past several months have demonstrated quite convincingly that maintaining reasonable stocks, apart from their contribution to food security, also have a significant moderating effect on prices. Given the prevailing stocks of paddy, there was no great pressure to procure substantial amounts this year and, consequently, no reason to raise the procurement price to what the CACP wanted. The increase now decided on by the government should be sufficient to cover increases in the cost of cultivation as well as provide some additional incentive to farmers not to shift out of paddy in the ongoing kharif season. Further, given the very worrying inflationary scenario, any measure that reinforces pressure on prices is to be avoided as long as it does not detract from other objectives. If the proposed increase is seen as achieving the production and procurement goals, there is no reason to risk further price increases by raising the procurement price to even higher levels. Unfortunately, the government could not resist giving the decision a political twist. It justified its scaling down of the Commission's recommendations on the grounds that some state governments had difficulties with them. Some of the governments indicated are run by parties in opposition to the coalition at the Centre. They firmly rejected this claim, which cast them in the role of opposing higher prices for their farmers, which could prove to be politically costly in the elections coming up over the next several months. Rather than trying to score political points through this needless controversy, the government should recognise that its political survival depends most importantly on its ability to gain control over inflation, particularly in food items. This is most likely to be achieved by raising the price by just enough to ensure that production is not intentionally reduced by farmers. If it had the good sense to do just this, then this is the message that it should be sending out to the ultimate vote bank, the average consumer. The immediate issue of managing supplies and prices aside, the recent shocks from food prices around the world have focused the spotlight on the efficiency of agricultural policy regimes around the world. India, given its income levels and employment patterns, is among the most vulnerable to the kind of price volatility that was seen recently. For this reason, politics will never be disentangled from food pricing and distribution. However, the least that the citizen can expect is that the nexus between the two is constructive. This calls for a transparent long-term policy framework that is followed by the government of the day, with genuine monitoring by the opposition.