Open Market Sale Scheme: Bridging Gaps and Balancing Prices

The Open Market Sale Scheme (OMSS) refers to the periodic sale of food grains by the government or government agencies at predetermined prices on the open market. This initiative aims to enhance the availability of essential commodities, particularly during periods of low supply, and mitigate high open market prices, especially in regions facing shortages.

Under the direction of the government, the Food Corporation of India (FCI) conducts these sales to increase the supply of wheat and rice, particularly during lean seasons, and stabilize prices in deficit regions.

What is Open Market Sale Scheme?

The Open Market Sale Scheme (OMSS) is a government initiative that involves periodically selling food grains in the open market at fixed rates. This helps to increase the availability of grains, especially during times of scarcity and aims to reduce overall market prices, particularly in regions facing deficits.

To enhance transparency in operations, the Food Corporation of India has transitioned to conducting electronic auctions for OMSS sales. These auctions take place weekly using the NCDEX commodity trading platform. State governments and Union Territory administrations can also participate in the online auction if they require wheat and rice beyond the scope of the Targeted Public Distribution System (TPDS).

The current version of OMSS comprises three components: e-auction sales of wheat to large customers and private merchants, dedicated movement sales of wheat through online auctions to wholesale buyers and private dealers, and e-auction sales of Grade "A" raw rice to wholesale customers and individual dealers.

Recently, the government decided that states can choose the start date for the Price Support Scheme (PSS) procurement of pulses and oilseeds, with the procurement process lasting for a mandatory period of 90 days.

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Objectives of the Open Market Sale Scheme 

• The objectives of the Open Market Sale Scheme (OMSS) include boosting food grain availability during periods of low supply, which helps stabilize market prices.

• Another aim is to minimize the expenses associated with storing surplus food grains in the central pool.

• Additionally, the scheme aims to prevent the deterioration of food grain quality and ensure their utilization for human consumption.

• Lastly, it intends to create storage space for the upcoming procurement of wheat and rice, which are essential for the marketing season.

What is the Food Corporation of India?

The Food Corporation of India (FCI) is a government-owned entity that operates under the Ministry of Consumer Affairs, specifically the Department of Food and Public Distribution. Established in 1965 through the enactment of the Food Corporations Act of 1964, the FCI was formed to address the pressing issue of a severe grain shortage, particularly in wheat.

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As a statutory organization, the FCI is entrusted with crucial tasks such as the procurement, storage, transportation, distribution, and sale of food grains and other commodities. Its primary objective is to ensure food security and maintain an efficient supply chain system for essential food items.

To enhance the availability of food grains and address shortages, especially during periods of low supply, the government or government entities sometimes engage in the sale of food grains on the open market at pre-established prices. This practice aims to stabilize open market prices, particularly in regions experiencing deficits, by boosting the overall supply of food grains.

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