Open Market Sale Scheme (OMSS)

Open Market Sale Scheme (OMSS) upsc notes
Food Corporation of India's (FCI) imposed restrictions
Refusal to allow states' grain procurement
About OMSS
Operationalised for foodgrains sale
Predetermined prices
For bulk consumers and private traders
During lean season
Nodal Agency: Food Corporation of India (FCI)
Selling Mode: Weekly auctions by FCI
Platform: National Commodity and Derivatives Exchange Limited (NCDEX)
Purpose: Improve domestic grain availability
Cool down open market prices
Especially in deficit regions
Features of OMSS
Weekly e-auctions by FCI
Reserve price for wheat and rice sale
Fixed by Department of Food and Public Distribution (DFPD)
Kept uniform throughout the country
Sale throughout the year
Non-procuring states
Non-procurement period in procuring states
Quantity for sale decided by DFPD
Based on availability and demand
Surplus procuring states can't participate in e-auction for rice purchase
Significances of OMSS
Enhance supply of food grains
Especially during lean season
Moderates open market prices
Prevent wastage and deterioration of food grains
In FCI godowns
Due to lack of storage space
Due to improper maintenance
Provides alternative source of food grains
For bulk consumers, state governments, UTs
For private parties participating in various schemes
Generates revenue for the FCI
Reduces its subsidy burden on central government
Challenges faced by OMSS
Impact on farmers
Potential lowering of food grain prices
Quality control
Potential spoilage and wastage
Administrative issues
Complex and time-consuming e-auctions
Does not address structural problems
Of food grain management
Procurement, distribution, buffer stocking policies
Way Forward
Careful implementation to ensure benefits outweigh drawbacks

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