{"id":36137,"date":"2024-08-02T05:43:07","date_gmt":"2024-08-02T00:13:07","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=36137"},"modified":"2025-09-30T10:50:38","modified_gmt":"2025-09-30T05:20:38","slug":"what-is-the-open-market-sale-scheme-omss","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-the-open-market-sale-scheme-omss\/","title":{"rendered":"What is the Open Market Sale Scheme (OMSS)?"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>What is the Food Corporation of India (FCI)?<\/strong><\/li>\n<li><strong>What is the Open Market Sale Scheme (OMSS)?<\/strong><\/li>\n<li><strong>How has the Centre Revised the OMSS?<\/strong><\/li>\n<li><strong>What is the Bone of Contention?<\/strong><\/li>\n<li><strong>How have States Reacted?<\/strong><\/li>\n<li><strong>The Centre\u2019s Argument<\/strong><\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>The Centre recently allowed state governments to directly buy rice from the Food Corporation of India (FCI) without participating in e-auction under the open market sale scheme (domestic).<\/li>\n<\/ul>\n<h2><strong>What is the Food Corporation of India (FCI)?<\/strong><\/h2>\n<ul>\n<li>It is a <strong>statutory body<\/strong> set up in 1965 (under the <strong>Food Corporation Act, 1964<\/strong>) <strong>under<\/strong> the <strong>Ministry of Consumer Affairs, Food and Public Distribution,<\/strong> Government of India.<\/li>\n<li>It was <strong>set up against<\/strong> the <strong>backdrop of a major shortage of grains<\/strong>, especially wheat, in the country.<\/li>\n<li>The FCI is the main agency responsible for the <strong>execution of food policies<\/strong> of the government.\u00a0<\/li>\n<li>Currently, FCI is mandated with <strong>three basic objectives:<\/strong>\n<ul>\n<li>Effective<strong> price support operations for safeguarding<\/strong> the interests of the <strong>farmers<\/strong>.<\/li>\n<li><strong>Distribution of food grains<\/strong> throughout the country <strong>for public distribution system<\/strong>.<\/li>\n<li><strong>Maintaining<\/strong> satisfactory level of operational and <strong>buffer stocks of food grains<\/strong> to ensure National Food Security.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>What is the Open Market Sale Scheme (OMSS)?<\/strong><\/h2>\n<ul>\n<li><strong>The FCI,<\/strong> on the instructions from the government <strong>from time to time, sells surplus food grains from <\/strong>the <strong>central pool<\/strong>, <strong>especially wheat and rice,in the open market<\/strong> to traders, bulk consumers, retail chains, etc., at pre\u00addetermined prices.\n<ul>\n<li>This is in <strong>addition to maintaining buffer stocks and making a provision for<\/strong> meeting the requirements of the <strong>National Food Security Act<\/strong> (NFSA) and Other Welfare Schemes (OWS),<\/li>\n<\/ul>\n<\/li>\n<li>The <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/fci-role\/\" target=\"_blank\">FCI<\/a> does this <strong>through e-\u00adauctions,<\/strong> where open market<strong> bidders can buy specified quantities.<\/strong><\/li>\n<li>An eligible bidder <strong>can bid for<\/strong> a minimum quantity of 10 metric tons (MT) to a <strong>maximum of 100 MT in the case of wheat<\/strong>. In the <strong>case of rice<\/strong>, traders are eligible and can bid a minimum quantity of 10 MT and a <strong>maximum quantity of 1000 MTs.<\/strong><\/li>\n<li><strong>States<\/strong> are also <strong>allowed to procure food grains through<\/strong> the <strong>OMSS without participating in the auctions<\/strong>, for their needs.\n<ul>\n<li>This <strong>will be beyond what they get<\/strong> from the central pool <strong>to distribute to NFSA beneficiaries.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li>The OMSS <strong>aims to enhance the supply<\/strong> of food grains (ensuring food security) during the lean season and thereby <strong>moderate the open market prices<\/strong> (controlling inflation), especially in the deficit regions.<\/li>\n<\/ul>\n<h2><strong>How has the Centre Revised the OMSS?<\/strong><\/h2>\n<ul>\n<li><strong>The Centre decided to restrict the quantity <\/strong>that a single bidder can purchase in a single bid under the OMSS.<\/li>\n<li>While the maximum quantity allowed earlier was<strong> 3,000 metric tonnes (MT)<\/strong> per bid for a buyer, it will now range from <strong>10\u00ad100 metric tonnes.\u00a0<\/strong><\/li>\n<li>The FCI claims that the quantities have been reduced this time <strong>to accommodate more small and marginal buyers and to ensure wider reach of the scheme<\/strong>.<\/li>\n<li><strong>The objective behind the move is also to curb retail prices <\/strong>as allowing smaller bids should ideally <strong>break monopolies<\/strong> of bulk buyers, allowing more competitive bids by small buyers.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<figure class=\"media\">\n<div data-oembed-url=\"https:\/\/www.youtube.com\/watch?v=71Pfwe64pEo\">\n<div><iframe src=\"https:\/\/www.youtube.com\/embed\/71Pfwe64pEo\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<\/figure>\n<h2><strong>What is the Bone of Contention?<\/strong><\/h2>\n<ul>\n<li>Through a new notification, <strong>the Centre stopped the sale of rice and wheat from the Central pool under the OMSS to State governments<\/strong>, also disallowing private bidders to sell their OMSS supplies to state governments.\u00a0<\/li>\n<\/ul>\n<h2><strong>How have States Reacted?<\/strong><\/h2>\n<ul>\n<li>States such as Karnataka and Tamil Nadu have criticised the government<strong> for engaging in \u201cpolitics\u201d at the expense of marginalised beneficiaries<\/strong> of State welfare schemes.\u00a0<\/li>\n<li>In Karnataka,<strong> the Anna Bhagya scheme<\/strong> to give rice to marginalised families was a part of the Congress government\u2019s poll promise.\u00a0\n<ul>\n<li>The leaders have accused Centre of <strong>conspiring to \u201cfail\u201d the State government\u2019s poll guarantee<\/strong> by ensuring the State did not receive the required amount of rice to implement the scheme.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>The Centre\u2019s Arguments:<\/strong><\/h2>\n<ul>\n<li>The reason for restricting supplies per bidder and eventually excluding states from procuring through auctions was<strong> to curb inflation and regulate supply<\/strong>.<\/li>\n<li><strong>The Centre was already meeting its obligations<\/strong> to distribute grains to 80 crore marginalised beneficiaries under the NFSA.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>Q1) What is the National Food Security Act 2013?<\/strong><\/h3>\n<p>The Act legally entitled upto 75% of the rural population and 50% of the urban population to receive subsidized food grains under Targeted Public Distribution System.<\/p>\n<h3><strong>Q2) What is the public distribution system (PDS)?<\/strong><\/h3>\n<p>PDS evolved as a system of management of scarcity through distribution of foodgrains at affordable prices. Over the years, PDS has become an important part of the Government&#8217;s policy for management of the food economy in the country.<\/p>\n<hr \/>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.newindianexpress.com\/nation\/2024\/Aug\/02\/states-allowed-to-buy-rice-from-fci-without-e-auction-at-rs-2800quintal\" target=\"_blank\" rel=\"nofollow noopener\">States allowed to buy rice from FCI without e-auction at Rs 2,800\/quintal<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under OMSS, FCI sells surplus food grains from the central pool in the open market at pre\u00addetermined prices.<\/p>\n","protected":false},"author":5,"featured_media":36138,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-36137","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/36137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=36137"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/36137\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/36138"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=36137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=36137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=36137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}