The Food Corporation of India (FCI) is set to release 30 LMT of wheat from the Central pool stock into the market. This operation will be carried out under the Open Market Sale Scheme (Domestic) and state governments/UTs will be offered the wheat for their schemes without requiring an e-auction.
Understanding the Open Market Sale Scheme
An important initiative by the Food Corporation of India, the Open Market Sale Scheme (OMSS), allows FCI to sell surplus stocks of wheat and rice at predetermined prices. Sales are conducted through e-auctions periodically to improve the supply of food grains in the open market. The primary aim of the OMSS is to dispose of surplus stocks and regulate wheat prices in the open market.
Every week, FCI conducts auctions for the OMSS on the National Commodity and Derivatives Exchange Limited (NCDEX) platform. The NCDEX is a commodities exchange platform in India that facilitates trading in various agricultural commodities.
About Food Corporation of India
The Food Corporation of India is a government-owned corporation that was created to manage India’s food security system. Established in 1965 under the Food Corporation’s Act 1964, its primary goal was to ensure adequate availability of food grains across the country and maintain price stability in the market.
In addition to this, FCI maintains buffer stocks of food grains as preventive measures during times of scarcity or crisis. The corporation is also responsible for distributing food grains across the country for the public distribution system. As part of its operations, FCI uses e-auctioning as a method to get rid of its surplus food grains.
Examining the Provisions of the National Food Security Act, 2013
In the UPSC Civil Services Examination, Previous Year Question (PYQ) Prelims Q1, with reference to the provisions made under the National Food Security Act, 2013, the following statements were examined:
The families falling under the ‘below poverty line (BPL)’ category are exclusively eligible to receive subsidised food grains.
The eldest woman in a household, of age 18 years or above, shall be the head of the household for issuing a ration card.
Pregnant women and lactating mothers are entitled to a ‘take-home ration’ of 1600 calories per day during pregnancy and for six months thereafter.
In response to the question, option (b) – which states that the eldest woman in a household, of age 18 years or above, shall be the head of the household for issuing a ration card – was identified as the correct statement.
Direct Benefit Transfer Vs. Price Subsidy
A question was raised on possible changes in the subsidy scenario in India if price subsidy is replaced with Direct Benefit Transfer (DBT). This question invites discussions on the implications and potential benefits of a shift towards DBT, such as direct transfer of benefits into beneficiaries’ accounts, elimination of middlemen, reduced corruption, and increased efficiency in the subsidy system.
Understanding these various aspects of India’s food security mechanism and the roles of different schemes and organisations like the FCI is key to fully grasp the intricate workings of India’s agro-economy and the methods employed to maintain stability and security in it. The impacts of decisions like replacing subsidy systems with DBT can have far-reaching effects on society and the economy and therefore makes for an important discussion point.
