Centre Discontinues Wheat and Rice Sale Under OMSS to Ensure Food Security Amid Crop Concerns

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In a recent move to maintain adequate buffer stocks and control price rise, the Centre has announced the discontinuation of the sale of wheat and rice to states under the Open Market Sale Scheme (OMSS). The decision, which took effect from June 13, comes in light of concerns over the potential impact of deficient monsoon rains on the Kharif crop. The announcement regarding the discontinuation of the sale of wheat and rice to states under the Open Market Sale Scheme (OMSS) was formally conveyed by Sadhvi Niranjan Jyoti, who holds the position of Minister of State for Food and Consumer Affairs. This decision was communicated through a written response presented before the esteemed members of the Lok Sabha. While the move aims to safeguard food security and curb inflationary trends, it has garnered mixed reactions from various states.

Paddy in harvest,The golden yellow paddy in hand, Farmer carrying paddy on hand, Rice.

Maintaining Buffer Stocks and Tackling Price Rise

With expectations of El-Nino-induced rainfall deficiency affecting Kharif crop production in the country, the Centre took proactive measures to avoid potential food crises. By discontinuing the sale of wheat and rice under the OMSS, the government seeks to bolster buffer stocks to ensure a steady supply of essential commodities during periods of scarcity. This decision is also intended to control inflationary trends and maintain sufficient stock levels in the central pool for distribution under the National Food Security Act (NFSA) and other welfare schemes.

Crop Procurement and Surplus Stocks

Addressing concerns about wheat procurement, the Minister of State for Food and Consumer Affairs stated that during the rabi marketing season 2023-24 (April-March), 262.02 lakh tonnes of wheat were procured at the minimum support price (MSP). This represents a substantial increase of 39.43 percent compared to the previous year’s 187.92 lakh tonnes. As of the specified date of July 1, 2023, the quantity of wheat available in the central pool amounted to a considerable 301.45 lakh tonnes, surpassing the designated buffer norms of 275.80 lakh tonnes, which clearly indicates an evident surplus of wheat stocks.

OMSS and Its Objectives

The Open Market Sale Scheme (OMSS) is a crucial initiative undertaken by the Food Corporation of India (FCI) to sell surplus food grains, particularly wheat and rice, from the central pool in the open market to various stakeholders, including traders, retail chains, and bulk consumers, at predetermined prices. The scheme aims to ensure food security during lean seasons, moderate open market prices in deficit regions, and control inflation.

Revised OMSS and Contention

As a component of the revamped OMSS, the authorities at the Centre made a notable decision to impose limitations on the quantity that a single bidder can acquire in a single bid. In the past, the maximum allowable quantity for a buyer stood at 3,000 metric tonnes (MT) per bid; however, this range has been significantly adjusted to now span from 10 to 100 metric tonnes. The reduction in quantities is aimed at accommodating more small and marginal buyers, fostering wider participation in the scheme, and curbing retail prices by breaking monopolies of bulk buyers.

States’ Reactions and Centre’s Defense

States such as Karnataka and Tamil Nadu have criticized the government for allegedly playing politics at the expense of marginalized beneficiaries of state welfare schemes. For example, in Karnataka, the Anna Bhagya scheme, which provides rice to marginalized families, was a key promise made by the previous Congress government. Leaders from these states accused the Centre of conspiring to undermine their welfare schemes by not providing the required amount of rice under the OMSS.

In response, the Centre defended its decision, stating that the move was primarily aimed at curbing inflation and regulating supply. Moreover, the government asserted that it was already fulfilling its obligations to distribute grains to 80 crore marginalized beneficiaries under the NFSA.

As the Centre discontinues the sale of wheat and rice under the OMSS to maintain buffer stocks and control price rise, the focus remains on ensuring food security and managing surplus stocks amid concerns of potential crop impacts due to monsoon shortfall. While the decision has sparked debates and varying reactions from states, the government maintains that its actions are based on careful consideration of economic and climatic conditions, with the ultimate goal of securing the nation’s food supply and stabilizing prices.

Read more at:

https://www.bqprime.com/markets/centre-halts-sale-of-wheat-rice-to-states-under-omss-to-maintain-stock-control-prices

https://m.economictimes.com/news/economy/agriculture/sale-of-wheat-rice-to-states-under-omss-stopped-to-maintain-adequate-buffer-stocks-control-prices/articleshow/102140960.cms

https://web.toppersnotes.com/current-affairs/blog/the-open-market-sale-scheme-for-wheat-and-rice-6lC4

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