What is the Open Market Sale Scheme?
Description
What is the Open Market Sale Scheme?
Open Market Sale Scheme Discontinuation: Impact on Food
Security and State Reactions
Description: Learn how the discontinuation of the Open
Market Sale Scheme (OMSS) by the Central Government affects food security,
inflation control, and state programs. Explore state reactions and
implications.
The Central Government has recently
discontinued the sale of rice and wheat from the central pool under the Open
Market Sale Scheme (OMSS) to State governments.
About:
The Open Market Sale Scheme program
implemented by the FCI in order to facilitate the sale of surplus
food grains, primarily wheat, and rice, from the central pool in the open
market.
Purpose and Objectives:
o Firstly, to enhance food grain
supply during lean seasons.
o Secondly, Moderate open market
prices and control inflation.
o Thirdly, to ensure food
security and availability of grains in deficit regions.
o Fourthly, to facilitate the sale
of surplus food grains from the central pool.
Implementation:
o Conduct e-auctions by the FCI for traders,
bulk consumers, and retail chains to purchase specified quantities of food
grains at pre-determined prices.
o Allow states to procure additional food
grains through OMSS for distribution under the National Food
Security Act,2013 (NFSA).
o FCI conducts weekly auctions for the OMSS for
wheat on the platform of the National Commodity and Derivatives Exchange
Limited (NCDEX).
Restrictions:
o The OMSS underwent a recent revision with a
focus on limiting the quantity that a single bidder can
purchase in a single bid.
o Previously, the maximum allowed
quantity per bid was 3,000 metric tonnes. However, it has now
been reduced to a range of 10-100 metric tonnes.
o The aim of this change is to promote
wider participation by accommodating small and marginal buyers.
o By encouraging competitive bids from
smaller buyers, the revised OMSS seeks to curb retail prices and create
a more level playing field.
Discontinuation of OMSS Sales to States:
o The Centre decided to discontinue the sale
of rice and wheat from the central pool to state governments under the OMSS.
o Additionally, private bidders are no
longer allowed to sell their OMSS supplies to states.
o The rationale behind this decision is
to control inflationary trends and maintain adequate stock levels in
the central pool.
o By ensuring that food security obligations
are met, the discontinuation of OMSS sales to states aims to streamline the
distribution and allocation of food grains.
How
have the States Reacted?
§ Karnataka and Tamil Nadu have criticized
the Centre's decision.
§ Karnataka has temporarily replaced its free
grain distribution scheme for below-poverty-line (BPL) families, known as
the Anna Bhagya Scheme, with cash transfers to beneficiaries
due to being unable to procure enough rice in the market at a
reasonable cost in time to meet the requirements of the scheme.
