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Open Market Sale Scheme (OMSS)

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The Central Government recently discontinued the sale of rice and wheat from the central pool under the Open Market Sale Scheme (OMSS) to State governments.

About Open Market Sale Scheme (OMSS):

  • Under OMSS, the Food Corporation of India (FCI) sells surplus stocks of wheat and rice at pre-determined prices through e-auction in the open market.
  • Objective: To enhance the supply of food grains, especially wheat, during the lean season and thereby moderate the open market prices, specially in the deficit regions.
  • The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX(National Commodity and Derivatives Exchange Limited).
  • The State Governments/ Union Territory Administrations are also allowed to participate in the e-auction, if they require wheat and rice outside the Targeted Public Distribution Scheme (TPDS) and Other Welfare Schemes (OWS).
  • The reserve price is fixed by the government. In the tenders floated by the FCI, the bidders cannot quote less than the reserve price.
  • The present form of OMSS comprises 3 schemes as under:
    • Sale of wheat to bulk consumers/private traders through e-auction.
    • Sale of wheat to bulk consumers/private traders through e-auction by dedicated movement.
    • Sale of Raw Rice Grade ‘A’ to bulk consumers/private traders through e-auction.

Key facts about Food Corporation of India (FCI):

  • It is a statutory body set up in 1965 (under the Food Corporation Act, 1964) against the backdrop of major shortage of grains, especially wheat, in the country.
  • It comes under the ownership of the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
  • Headquarters: New Delhi
  • FCI was mandated with three basic objectives:
    • to provide effective price support to farmers;
    • to procure and supply grains to PDS for distributing subsidized staples to economically vulnerable sections of society; 
    • keep a strategic reserve to stabilize markets for basic foodgrains;