OPEN MARKET SALE SCHEME (OMSS)

1. Context

2. About Open Market Sale Scheme

• The Open Market Sale Scheme (OMSS) Domestic is a scheme by the Food Corporation of India (FCI) to sell surplus wheat and rice from its central pool to traders, bulk consumers, retail chains and other entities in the open market.
• The scheme is intended to regulate the prices of wheat and rice in the market and to ensure adequate availability of food grains to consumers.
• The OMSS Domestic is conducted through e-auctions. The FCI announces the quantity of wheat and rice to be sold under the scheme and the minimum bid price. Bidders can submit their bids online and the FCI will accept the highest bids.
• The successful bidders will be notified and they will be required to make the payment within a specified period.
• The OMSS Domestic is an important tool for the FCI to manage its surplus stocks of wheat and rice.
• The scheme helps to ensure that the FCI does not have to resort to selling its stocks at a loss.
• The scheme also helps to regulate the prices of wheat and rice in the market and to ensure adequate availability of food grains to consumers.

3. Objectives of the Open Market Sale Scheme

• To regulate the prices of wheat and rice in the market
• To ensure adequate availability of food grains to consumers
• To manage the surplus stocks of wheat and rice held by the FCI
• To generate revenue for the FCI
• To promote competition in the wheat and rice market

4. Wheat Production in India-Rabi and Kharif crop 

• Wheat is a rabi crop in India. It is grown during the winter season, from October to March.
• The Rabi season is considered to be the best time to grow wheat in India because the weather is cool and dry, which is ideal for wheat cultivation.
• Kharif crops are grown during the summer season, from June to September. The Kharif season is generally hot and humid, which is not ideal for wheat cultivation.
• However, some wheat is grown in the Kharif season in areas with irrigation facilities.
• In 2022-23, India is expected to produce a record 111.3 million tonnes of wheat. This is an increase of 2. 6 per cent from the previous year. 
• The increase in production is due to favourable weather conditions and the government's efforts to increase wheat acreage.

5. About Food Corporation of India

• The Food Corporation of India (FCI) is a government-owned agency in India responsible for the procurement, storage, distribution, and management of food grains, mainly wheat and rice, to ensure food security and stabilize food prices in the country.
• Established in 1965 under the Food Corporations Act, the FCI plays a crucial role in the Indian agriculture and food supply chain system.

5.1. Role and Functions of the Food Corporation of India (FCI)

Procurement and Purchase: FCI is responsible for procuring food grains, mainly wheat and rice, from farmers at government-set minimum support prices (MSPs). This procurement is aimed at ensuring that farmers receive fair prices for their crops and also to build up buffer stocks for food security.

Storage and Maintenance: FCI manages and maintains large storage facilities across the country to store the procured food grains. These storage facilities help prevent spoilage, pests, and losses due to weather conditions, ensuring a stable supply of food grains.

Buffer Stock Management: FCI maintains buffer stocks of food grains to meet emergency requirements, stabilize market prices, and ensure food security during times of drought, crop failure, or other supply disruptions.

Distribution: FCI is involved in the distribution of food grains through the Public Distribution System (PDS), a government initiative to provide essential commodities at subsidized rates to the economically disadvantaged population. It ensures that food reaches the intended beneficiaries through a network of fair-price shops.

Welfare Schemes: FCI supports various welfare schemes initiated by the government, such as the Mid-Day Meal Scheme and the National Food Security Act. It provides food grains for these schemes to ensure adequate nutrition for school children and vulnerable populations.

Export and Import: FCI sometimes participates in the export and import of food grains based on the government's policy objectives. This helps in maintaining domestic prices and managing excess stocks.

Market Intervention: In situations where market prices of food grains rise significantly, FCI may intervene by releasing its buffer stocks to stabilize prices and prevent inflation.

Price Support: FCI's procurement at MSPs acts as a price support mechanism for farmers. This encourages farmers to produce more food grains and ensures their economic viability.

Research and Development: FCI engages in research and development activities to improve storage techniques, reduce post-harvest losses, and enhance the overall efficiency of the food supply chain.

Logistics and Transportation: FCI manages the logistics and transportation of food grains from procurement centres to storage facilities and distribution points.

7. Conclusion

The interplay of the OMSS-D, the FCI's multifunctional role and the success of wheat cultivation in India reflect the nation's commitment to ensuring food security, stabilizing prices and fostering agricultural growth.