Context:
As a component of the Indian government’s effort to regulate the retail prices of rice, wheat, and flour (atta), weekly electronic auctions are conducted. The 11th e-auction for the fiscal year 2023-24 took place on September 6, 2023. In this auction, a total of 2.0 Lakh Metric Tons (LMT) of wheat sourced from 500 depots and 4.89 Lakh Metric Tons (LMT) of rice from 337 depots were made available for sale from various regions of the country.
Relevance:
GS3-PDS, Buffer Stock
Dimensions of the article:
- About OMSS
- About FCI
- Current status of rice and wheat cultivation in India
About OMSS:
- The Food Corporation of India (FCI) periodically sells excess stocks of wheat and rice at predetermined prices through electronic auctions in the open market to bolster the food grain supply.
- The Open Market Sale Scheme (OMSS) serves the dual purpose of divesting surplus wheat and rice stocks held by FCI while also regulating wheat prices in the open market.
- FCI conducts weekly auctions for wheat under OMSS using the National Commodity and Derivatives Exchange Limited (NCDEX) platform, which is an Indian commodity exchange facilitating trading in various agricultural and other commodities.
About FCI:
- FCI, a government-owned entity established in 1965 under the Food Corporation’s Act of 1964, plays a pivotal role in managing India’s food security system.
- Its core objectives include ensuring a consistent food grain supply across the nation, stabilizing market prices, maintaining buffer stocks for times of scarcity or crises, and distributing food grains through the public distribution system.
- In addition to other disposal methods, FCI also employs e-auctions as a means to divest surplus food grains.
Current status of rice and wheat cultivation in India:
An estimated quantity of 521.27 Lakh Metric Tons (LMT) of rice is projected for procurement in the upcoming Kharif Marketing Season (KMS) for 2023-24, compared to the previous year’s estimate of 518 LMT, of which 496 LMT was actually procured during the last Kharif Marketing Season of 2022-23.
During the KMS 2023-24 for the Kharif crop, the leading states in terms of anticipated rice procurement are Punjab (with an estimate of 122 LMT), followed by Chhattisgarh (61 LMT) and Telangana (50 LMT). These are followed by Odisha (44.28 LMT), Uttar Pradesh (44 LMT), Haryana (40 LMT), Madhya Pradesh (34 LMT), Bihar (30 LMT), Andhra Pradesh (25 LMT), West Bengal (24 LMT), and Tamil Nadu (15 LMT).
