The Open Market Sale Scheme for wheat and rice

Source: The post is based on the article “The Open Market Sale Scheme for wheat and rice” published in The Hindu on 29th June 2023

What is the News?

States have been looking at alternative ways of procuring wheat and rice after the Food Corporation of India’s(FCI) has imposed quantity restrictions and has also refused to allow States to procure these two food grains through its Open Market Sale Scheme (OMSS).

What is the Open Market Sale Scheme?

Under the Open Market Sale Scheme, the Food Corporation of India(FCI) from time to time sells surplus food grains from the central pool, especially wheat and rice in the open market to traders, bulk consumers, retail chains and so on at predetermined prices. 

The FCI does this through e-auctions where open market bidders can buy specified quantities.

States are also allowed to procure food grains through the OMSS without participating in the auctions for their needs beyond what they get from the central pool to distribute to NFSA (National Food Security Act) beneficiaries.

What is the objective behind introducing the Open Market Sale Scheme?

The objective is to activate the OMSS during the lean season, the time between harvests, to improve and regulate domestic supply and availability of the two grains and bring down their prices in the open market essentially making the scheme a measure to curb food grain inflation.

How has the Central Government revised the Open Market Sale Scheme?

Click Here to read

How have the States reacted?

In Karnataka, the Anna Bhagya scheme to give rice to marginalized families was a part of the Congress government’s poll promise. Congress has accused the Centre of conspiring to “fail” the State government’s poll guarantee by ensuring the State did not receive the required amount of rice to implement the scheme.

Tamil Nadu is trying to purchase 50,000 tonnes of rice from government agencies other than FCI. 

The Kerala government does not procure grains under the OMSS but is planning legal steps against the Centre’s overall food distribution policy.