Open Market Sale Scheme (OMSS)

Open Market Sale Scheme (OMSS)

This article covers “Daily Current Affairs” and the topic details “Open Market Sale Scheme”. The topic “Open Market Sale Scheme” has relevance in the Food Security section of the UPSC CSE exam.

For Prelims:

What is OMSS?

For Mains:

GS 3: Food Security

Implementation and Process

Recent Revisions in OMSS?

About FCI?

Why in the news?

States have been looking at alternative ways of procuring wheat and rice in the aftermath of the Food Corporation of India’s (FCI) quantity restrictions followed by the refusal to allow states to procure the two food grains through its Open Market Sale Scheme (OMSS).

What is OMSS?

It is a scheme implemented by the Food Corporation of India (FCI) to facilitate the sale of surplus food grains, generally wheat and rice from the central pool in the open market. The OMSS serves several purposes and objectives, including:

  • Enhancing food grain supply during lean seasons: The OMSS ensures that there is an adequate supply of food grains in the market, particularly during periods of scarcity or low production.
  • Moderating open market prices and controlling inflation: By releasing surplus food grains into the open market, the OMSS helps stabilize prices and prevent excessive inflation in the food grain market.
  • Ensuring food security and availability in deficit regions: The sale of surplus food grains through the OMSS helps meet the food requirements of regions that may have a deficit in production or availability of grains.
  • Facilitating the sale of surplus food grains from the central pool: The FCI maintains a central pool of food grains, and the OMSS provides a mechanism to sell the surplus grains from this pool to various buyers in the open market.


Implementation Process:

  • The FCI conducts e-auctions for traders, bulk consumers, and retail chains to purchase specified quantities of food grains at pre-determined prices.
  • States can procure additional food grains through OMSS for distribution under the National Food Security Act, 2013.
  • Auctions are conducted weekly on the National Commodity and Derivatives Exchange Limited (NCDEX) platform.


Recent Revisions in OMSS?

  • Maximum allowed quantity per bid has been  reduced from 3,000 metric tonnes to a range of 10-100 metric tonnes.
  • Aim is to promote wider participation and encourage small and marginal buyers, curbing retail prices and ensuring a level playing field.
  • The Centre has decided to discontinue the sale of rice and wheat from the central pool to the states under OMSS.
  • Private bidders are also prohibited from selling their OMSS supplies to states.
  • Purpose is to control inflation, maintain adequate stock levels, and streamline distribution and allocation of food grains.


State Reactions:

  • Karnataka and Tamil Nadu criticized the Centre’s decision.
  • Karnataka temporarily replaced its free grain distribution scheme for below-poverty-line families with cash transfers due to difficulties in procuring sufficient rice at a reasonable cost in the market.


The Food Corporation of India (FCI):

  • Established in 1965 under the Food Corporations Act of 1964 to manage the food security system in India.
  • Maintains buffer stocks of food grains for ensuring food security during scarcity or crisis.
  • distributes food grains in the country for the public distribution system.
  • Conducts e-auctions as one of the methods to dispose of surplus food grains.


Yojna daily current affairs eng med 4th July 2023

Q.1 With reference to the provisions made under the National Food Security Act, 2013, consider the following statements: (2018)

  1. The families coming under the category of ‘below poverty line (BPL)’ only are eligible to receive subsidised food grains.
  2. The eldest woman in a household, of age 18 years or above, shall be the head of the household for the purpose of issuance of a ration card.
  3. Pregnant women and lactating mothers are entitled to a ‘take-home ration’ of 1600 calories per day during pregnancy and for six months thereafter.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 3 only

Answer: (b)

Q.2 Which of the following is responsible for the implementation of the Open Market Sale Scheme (OMSS) for surplus food grains in India?

(a) Food Safety and Standards Authority of India (FSSAI)

(b) Food Corporation of India (FCI)

(c) Ministry of Agriculture and Farmers Welfare

(d) National Agricultural Cooperative Marketing Federation of India (NAFED)

Answer: (b)

Q.3 Discuss the role and significance of the Food Corporation of India (FCI) in ensuring food security in India. Analyze its functions, challenges faced, and the measures taken to address those challenges.

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