Centre to use foodgrains stock to control retail prices ahead of assembly polls

Amid rising prices of foodgrains ahead of four states' assembly elections, the Centre has taken the decision not to supply rice and wheat under the Open Market Sale Scheme (OMSS) to states, instead using it to control retail prices.

According to the Ministry of Food and Consumers Affairs, in the last year, wheat and rice prices have increased by 10 per cent while in the last month alone, both grain prices have jumped by 7 to 8 per cent.

Assembly elections are expected to take place in Rajasthan, Chhattisgarh, Madhya Pradesh and Telangana in the second half of 2023. Before these states go to the polls, controlling the food grain prices would be crucial for the BJP government at the Centre to win elections. Keeping this issue in mind, the Union Food Ministry has decided to discontinue the sale of rice and wheat under the Open Market Sale Scheme (OMSS) to all state governments, barring the northeast, hilly states and those facing law and order situations and natural calamities, sources in the government told DH.

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Besides, given concerns over the monsoon, climate change and the geopolitical situation, the Food Corporation of India (FCI) has to maintain enough stock. Discontinuing foodgrains under OMSS to state governments was one such decision taken in that direction, said the sources.

Earlier, the Karnataka government had sought 13,819 tonnes of rice for its own scheme under the OMSS without an e-auction for July.

However, Subodh Kumar Singh, Additional Secretary, Food Ministry, said the Centre is already providing free foodgrains via ration shops to about 80 crore poor enrolled under the National Food Security Act (NFSA). There are about 40-50 crore non-NFSA beneficiaries from the middle and upper middle class and the government has a responsibility towards them as well.

Foodgrain stock in the Central Government’s pool is required mainly to supply to the poor under the National Food Security Act and other welfare schemes, as well as to control the retail prices for a 9 months period, said Ashok Kumar Meena, Chairman of the Food Corporation of India. Till the next harvesting season, the FCI has to maintain the stock, he added.

As of July 1, the FCI has a total foodgrain stock of 573.92 lakh tonne against a buffer requirement of 411 lakh tonne, he said

On January 26, the central government had come out with the OMSS policy for 2023 under which states were allowed to buy both rice (including fortified rice) and wheat from the FCI for their own schemes without participating in an e-auction.

Under normal circumstances, the OMSS is operationalised to sell foodgrains, especially wheat and rice, at pre-determined prices in the open market from time to time to bulk consumers and private traders during the lean season. The purpose is to improve the domestic availability of these two key grains and cool down open market prices, especially in deficit regions.