Abstract: Public distribution of foodgrains in India is a national policy, which exists in all States. In some States, however, the public distribution system (PDS) works much better than in other States. The undivided State of Bihar (now the new Bihar and Jharkhand) is one of the States in which the policy works poorly. It is important to understand why this is the case. Generally, policy changes and recommendations do not take the specificities of particular States into account. Yet, for the PDS performance to improve in Bihar and Jharkhand, it is absolutely necessary to understand why it works as it works, what the main bottlenecks are and where there are possibilities for improvement, if any. This paper makes such attempt: it describes the PDS in Bihar and Jharkhand, not only in terms of how it fails and what it does not accomplish, but also in terms of what it is and what it does. The activities and interests of the various actors involved in the PDS are described, and it is shown that many people do benefit from the present set-up, but that there are also people within almost all categories of stakeholders who are dissatisfied with the large-scale misappropriation of foodgrains. The PDS experience is then put in the context of the wider political economy of Bihar. The paper ends with some general observations regarding the process of food policy making and implementation. Furthermore, it discusses constraints and opportunities for reform of the PDS in Bihar and Jharkhand. It is argued that there is scope for change, but change requires strategic political manoeuvring and initially a low-key approach in order not to awaken and antagonise the strong vested interests.