The study aims to investigate the effects of food stock changes on wholesale and retail prices of wheat and flour in Punjab, Pakistan. Further, the issues in the effectiveness of the government intervention have also been assessed. The study uses both secondary and primary data. Secondary data was obtained from Food Department Punjab (FDP), Agricultural Statistics of Pakistan and Punjab Development Statistics. The secondary data 2004-2013 has been used for monthly analysis and 1991-2012 has been used for annual analysis, While, the primary data was obtained from farmers, middlemen, millersand officials of the Food Department Punjab. For the analysis of the data, regression analysis and descriptive statistics have been used. The study finds that FDP has minor role in controlling price variations in wheat and flour markets of Punjab. The major issues obtained from respondents about intervention were financial constraints of food department Punjab, storage capacity and dependency on government. The study recommends that the FDP storage facilities should be increased. Strong government regulation network should be chalked out to avoid hoarding and smuggling of wheat and flour and full financial and administrative autonomy should be given to FDP in order to make them effective in controlling price variations. Supervisor: Dr Anwar Hussain