Daily Current Affairs : 20-January-2025
Recently, the Government of India introduced significant updates to the Open Market Sale Scheme (OMSS) for the year 2024-25. This revision aims to strengthen food security, reduce inflation, and promote ethanol production.
What is the Open Market Sale Scheme (OMSS)?
The Open Market Sale Scheme (OMSS) is a government initiative under which excess food grains like wheat and rice are sold from the central pool to various buyers. The Food Corporation of India (FCI) manages the sales, which are held through e-auctions. The Ministry of Consumer Affairs, Food & Public Distribution sets the prices for these grains.
- Who buys the grains?
- Dealers
- Bulk consumers
- Retail chains
In 2022-23, states like Karnataka, Tamil Nadu, Jharkhand, Jammu & Kashmir, and Assam bought the highest amount of rice under the OMSS.
States’ Role in OMSS
States play a crucial role in the OMSS. They can purchase food grains directly from the scheme without taking part in auctions to meet extra needs that go beyond their NFSA (National Food Security Act) allotment. These grains are then distributed to eligible beneficiaries under the NFSA.
Procurement Process
The procurement of wheat and paddy is carried out by FCI and state corporations during the Rabi and Kharif seasons. This process is based on the government’s procurement estimates and is aligned with the Minimum Support Price (MSP).
Latest Updates and Changes
The government has recently made some important changes to the OMSS policy:
- Fixation of Reserve Price for Rice
The new reserve price of rice has been set at ₹2,250 per quintal across India. This applies to:- State Governments and State Government Corporations
- Community Kitchens
- Ethanol distilleries for ethanol production
- No Requirement for E-Auction Participation
These groups can acquire rice without needing to participate in the e-auction process.
Objectives and Need for OMSS
The primary purpose of the OMSS is to manage food grain availability, particularly during the lean season when the gap between harvests occurs. The scheme aims to:
- Reduce Food Grain Prices
It helps lower rice and wheat prices in the open market, reducing inflationary pressures. - Promote Food Security
The OMSS assists in ensuring a steady supply of grains for various welfare schemes and public distribution systems. - Support Ethanol Production
The revised policies also support the national energy strategy by facilitating the use of rice for ethanol production.
Important Points:
- OMSS Overview:
- The Open Market Sale Scheme (OMSS) involves the sale of excess wheat and rice from the central pool by the Food Corporation of India (FCI).
- Sales are made to dealers, bulk consumers, and retail chains via e-auctions at prices set by the Ministry of Consumer Affairs, Food & Public Distribution.
- State Participation:
- States can acquire food grains directly under OMSS without participating in auctions to meet extra needs beyond their NFSA allotment.
- Acquired grains are distributed to beneficiaries under the National Food Security Act (NFSA).
- Procurement Process:
- Wheat and paddy are procured by FCI and state corporations during the Rabi and Kharif seasons.
- Procurement is done in line with the Minimum Support Price (MSP).
- Recent Updates to OMSS:
- The reserve price of rice has been fixed at ₹2,250 per quintal (Pan-India) for sale to State Governments, State Government Corporations, Community Kitchens, and ethanol distilleries.
- No need to participate in e-auctions for the above groups to acquire rice.
- Objectives of OMSS:
- Manage Food Grain Supply: Activated during the lean season to balance supply.
- Reduce Food Prices: Helps in lowering rice and wheat prices in the open market to reduce inflation.
- Support Ethanol Production: Facilitates the use of rice for ethanol production as part of the national energy strategy.
Why In News
Recently, the Government announced a significant revision in the Open Market Sale Scheme (Domestic) [OMSS(D)] Policy for the year 2024-25, aiming to enhance food security, stabilize grain prices, and support ethanol production as part of the national energy strategy.
MCQs about Open Market Sale Scheme (OMSS) 2024-25:Key Changes and Impact
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Which organization is responsible for managing the Open Market Sale Scheme (OMSS)?
A. Ministry of Finance
B. Food Corporation of India (FCI)
C. National Food Security Authority (NFSA)
D. Ministry of Agriculture
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Who sets the prices for the food grains sold under the OMSS?
A. Food Corporation of India (FCI)
B. State Governments
C. Ministry of Consumer Affairs, Food & Public Distribution
D. Ministry of Agriculture
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What is one of the key objectives of the OMSS during the lean season?
A. To increase the export of rice and wheat
B. To reduce food grain prices and control inflation
C. To store food grains for emergencies
D. To distribute grains only to the wealthy
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What role do states play in the OMSS policy?
A. States only participate in auctions for rice and wheat
B. States can acquire food grains without participating in auctions to meet additional needs
C. States store grains but do not distribute them
D. States distribute grains only to government employees
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