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What govt plans to clear record foodgrain stock

open market sale scheme, OMSS, food grains, india, Food Corporation of India, FCI, economy, news

By Prabhudatta Mishra

Faced with record stock of 40 million tonne of rice and the possibility of procuring an equal amount of wheat in two months, which could create a major problem of storage, the government is likely to announce this week an offtake policy to clear bulging food grains under the central pool.

There is an immediate need to evacuate grains and the open market sale scheme (OMSS) will be soon made effective, said a source. The Food Corporation of India (FCI) may be allowed to sell 10 million tonne of wheat and 2 million tonne of rice under the OMSS starting from this month itself, sources said. The agency had sold 0.8 million tonne of rice out of 2 million tonne allowed and 7 million tonne out of 10 million tonne of wheat sanctioned in 2018-19FY.

If the OMSS for wheat is allowed in April, it will be the first time, as the government always sells the grains after procurement is over. Last year also, the OMSS was started in July, a flour miller said. Millers are likely to buy the wheat both from the FCI as well as from the open market, said Veena Sharma, secretary of the Roller Flour Millers Federation of India. However, a lot depends on the reserve price the government will fix, she added.

Sources said the reserve price of wheat may be Rs 2,000-2,030 per quintal since the Madhya Pradesh government has been paying a bonus of Rs 160/quintal over and above the minimum support price of Rs 1,840/quintal this year.

The FCI has a storage capacity of about 85 million tonne of food grains, including 12 million tonne under covered area plinth (CAP). The CAP storage is used only for wheat and not for paddy. The wheat stock under the central pool was about 18 million tonne on April 1 and there could be 40 million tonne freshly procured grain added to the stock by the end of May, which will take total stocks to 58 million tonne.

On the other hand, the FCI can dispose of a maximum of 4 million tonne under the public distribution system and other welfare schemes during April-May, thus leaving a surplus of about 54 million tonne. More rice will be added to the stock (40 million tonne as on March 1) as the procurement of rabi-grown paddy has started.

The government needs to seriously consider giving more rice under the PDS. Already, the Chhattisgarh government has 2 million tonne of paddy which it will have to sell in the open market since the Centre refused to take it. There is very little chance of higher offtake for OMSS rice unless the price is suitably fixed, an expert said.