Open Market Sale Scheme

• The Centre has discontinued the sale of rice and wheat from the central pool under the Open Market Sale Scheme (OMSS) to State governments, a move that will hit some States, including Karnataka, offering free grains to the poor.

ABOUT OPEN MARKET SALE SCHEME (OMSS):

• Under OMSS, the Food Corporation of India (FCI) sells surplus stocks of wheat and rice at pre-determined prices through e-auction in the open market.
• Objective: To enhance the supply of food grains, especially wheat, during the lean season and thereby moderate the open market prices, especially in the deficit regions.
• The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX (National Commodity and Derivatives Exchange Limited).
• The State Governments/ Union Territory Administrations are also allowed to participate in the e-auction, if they require wheat and rice outside the Targeted Public Distribution Scheme (TPDS) and Other Welfare Schemes (OWS).
• The reserve price is fixed by the government. In the tenders floated by the FCI, the bidders cannot quote less than the reserve price.
• The present form of OMSS comprises 3 schemes as under:
  • Sale of wheat to bulk consumers/private traders through e-auction.
  • Sale of wheat to bulk consumers/private traders through e-auction by dedicated movement.
  • Sale of Raw Rice Grade ‘A’ to bulk consumers/private traders through e-auction.

KEY FACTS ABOUT FOOD CORPORATION OF INDIA (FCI):

• It is a statutory body set up in 1965 (under the Food Corporation Act, 1964) against the backdrop of major shortage of grains, especially wheat, in the country.
• It comes under the ownership of the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
• Headquarters: New Delhi
• FCI was mandated with three basic objectives:
  • To provide effective price support to farmers;
  • To procure and supply grains to pds for distributing subsidized staples to economically vulnerable sections of society;
  • Keep a strategic reserve to stabilize markets for basic foodgrains;