Rice sale under OMSS sees lukewarm response; govt says open to tweak policy

The Centre on Monday said there has been a lukewarm response to the sale of rice to small traders under the open market sale scheme in the first e-auction round and indicated that it is open to tweaking the policy.

While ruling out allowing states to participate in the Open Market Sale Scheme (OMSS) for rice, Union Food Secretary Sanjeev Chopra also said the Centre will watch how the subsequent e-auction rounds go before deciding on the next course of action.

Congress-ruled Karnataka and the Centre have locked horns over the OMSS rice, with the latter maintaining that it does not have enough stocks to meet the demand if all states start seeking rice from the central buffer stock.

According to Chopra, 15 states and Union Territories (UTs), including Tamil Nadu and Odisha, are of the view that the Centre's surplus food stock should be used in the larger interest of 140 crore population and "not for a particular section and particular class of people".

Apart from these two states, others that shared similar views during the recently concluded food ministers' conference were Arunachal Pradesh, Bihar, Jharkhand, Uttar Pradesh, Rajasthan, Uttarakhand, Gujarat, Andhra Pradesh, Puducherry, Nagaland, Manipur, Maharashtra and Haryana.

In a media briefing, the Food Secretary asserted that the OMSS for rice has been started after many years and this has been done to give a signal to the market against any artificial price rise in the retail market.

In the first round of e-auction held on July 5, the Food Corporation of India (FCI) had offered 3.88 lakh tonne of rice but only 170 tonne was sold to five bidders. The next auction is scheduled on July 12.

"Let's not get discouraged with one round not getting good response. .... Usually, FCI does not do routine OMSS for rice. It is primarily done for wheat. For rice, it just started. We expected more (response) for rice, but it has not happened," Chopra said.

More than the quantity of rice sale under the OMSS, he said, "the intention was to give a signal to the market that the stock is with the government and will use it in the interest of common man to bring down the prices. ...That signal is more important..

The sale of rice under the OMSS has not ended. It will be continued until March 31, 2024, and sales will happen via e-auction every week, he added. The Secretary also mentioned that the small traders were not aware of the OMSS rice sale.

The FCI is doing publicity of the same and the government expects more participation in the coming rounds of e-auction.

Asked if the government plans to tweak OMSS policy to encourage offtake of rice, the Secretary said: "There are options with the government and it will exercise if required in the next few rounds. We will wait and watch. We don't want to jump the gun. This is the first auction. The government is open to changes."

The tweaking of a policy is a dynamic process. If there is a requirement, the government will tweak the policy to the objective, he said.

The sale of rice via OMSS was started to improve availability and check the rise in retail prices amid a shortage of rice stock by 13 per cent vis-a-vis the past two years and the possibility of El Nino leading to weather disruptions likely affecting the rice production and procurement, he added.

According to FCI Chairman and Managing Director Ashok Kumar Meena, the offtake of rice under the OMSS was less as the e-auction norms have been tightened to ensure small traders are able to participate.

This year, one buyer from a state is permitted to buy only 100 tonnes under the OMSS. Buyers of one state cannot purchase the grain in other states and they cannot sell the procured grain to government agency, he said.

"Therefore, the offtake would be less. The entire purpose is to ensure retail prices come down. ...Even in wheat, the offtake is very low," Meena noted.

Ruling out allowing states to participate in the Open Market Sale Scheme (OMSS) for rice as sought by Karnataka government, the Secretary said about 360 lakh tonne of grain is required to meet the demand under the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) at present.

"If we take a hypothetical scenario, if all states come up with such requests, then an additional 360 lakh tonne will be required, which makes it to 720 lakh tonne. My total procurement is 560-670 lakh tonne this year. Then I am neither able to meet my buffer nor do any retail operations to control prices," he said.

The Centre took views of the state governments on this issue in a recent conference where 17 state food ministers were present.

"Except for one minister, all other ministers supported the contention of the Union Minister. Whatever quantity available in the country should be used for the good of the entire population of 140 crore people, not for a certain class or category of people of a particular state or region," he said.