and three anonymous referees, as well as Jean-Marc Bourgeon,

This article compares various policies in a rational expectations food storage model with risk-averse consumers and missing insurance markets calibrated to represent a developing country. I consider an optimal storage policy under discretion and two optimal simple rules: a constant private storage subsidy and a price band.The storage subsidy achieves welfare gains similar to the discretionary policy. The price band maximizing social welfare is a price-peg scheme: The floor and ceiling prices are the same, and the capacity constraint represents 11 % of the steady-state production level. This price band achieves three-quarters of the gains from the optimal policy under discretion. Key words: discretion, food price stabilization, price volatility, storage. JEL codes: Q11, Q18. Should food prices in poor countries be stabilized? This question was prompted by the riots in several countries, includin