This discussion paper examines the most recent experience of food subsidy reform in Iran in order to derive some lessons for food subsidy reforms elsewhere. Iran has a long history of providing general commodity subsidies, including for energy and food items, and it has attempted several waves of subsidy reforms in the past three decades, most notably in 2010 (energy and bread) and 2019 (petrol), whereby it established a nationwide direct cash transfer system. However, given the political and economic circumstances, subsequent administrations have returned to different kinds of consumer subsidies, which have required further reforms. The most recent form of food subsidy was the preferential foreign exchange rate (PFER) policy, which allocated about US$100 billion of the government’s foreign exchange reserves with a fixed rate (far below the market rate) – during the four years following the unilateral withdrawal of United States from the Iran nuclear deal in 2018 – to import food and other basic commodities. Finally, the Raisi administration abolished the PFER policy in May 2022 and started to redistribute what it saved from the consumer subsidy cuts through the Just Distribution of Subsidies Scheme (JDSS), which is actually a targeted direct cash transfer scheme.