With high levels of poverty and inadequate domestic food grain production, Kerala has been one of the most food insecure states in India. Its adverse implications, however, have been mitigated through active state government intervention and highly subsidized public distribution system operated under public vigil. As a result, per capita cereal consumption has increased in spite of a decline in domestic cereal production. Yet, about 80 per cent of the population suffer from inadequate calorie intake. The scale of the public distribution system is substantial; but its effective utilization is less than 50 per cent of the potential due to inadequate economic access and poor quality of food grains. Still the system is not sustainable for fiscal reasons. The ongoing adjustment programme has sought to streamline the food distribution programme by reforming its pricing rule and by targeting it only to the poor. The present article examines its implications for food security and social development in Kerala. Copyright © 2001 John Wiley & Sons, Ltd.