Five states seek to purchase rice from FCI’s surplus stock
By Sandip Das
Five states including Karnataka and Tamil Nadu have proposed to buy 2.2 million tonne (MT) of subsidised rice from the Food Corporation of India’s (FCI) surplus stocks.
Sources said that Karnataka and Tamil Nadu have requested for 1.6 MT and 0.52 MT of rice respectively to be purchased from FCI during the current fiscal. Assam, Jammu and Kashmir, Manipur and Mizoram too have requested for rice purchase from the government’s stock.
This quantity of grain would be outside the quantity supplied for the public distribution system to states.
“State governments of non-surplus states which require additional rice to meet their requirements will be allowed to purchase rice under open market sale scheme (OMSS) without participating in e-auction..,” the food ministry said in a statement in Rajya Sabha recently.
The FCI likely to start offloading rice to the state governments at Rs 2800/quintal by next month while the government had decided to stop the sale of rice to states including Karnataka last year.
In addition under OMSS, the surplus rice from FCI stocks is currently being sold to bulk buyers through weekly e-auction at the base price of Rs 2800/quintal.
The FCI currently holds 43.57 million tonne (MT) — 32.61 MT of rice stocks and 10.96 MT of grain receivable from millers. The stock is against the buffer of 10.25 MT for October 1.
The government is aiming to reduce the huge surplus of rice stocks prior to the commencement of the new procurement season (2024-25) from October 1.
Meanwhile, following the meeting of state food secretaries officials of the food ministry and Food Corporation of India on Thursday, the government has set a rice procurement target of 48.5 MT for the kharif crop 2024-25 (October-September) which is an increase of 5% compared to an procurement of 46.3 MT in 2023-24.
“Various factors impacting procurement such as weather forecast, production estimates, and readiness of States for procurement operations for paddy and coarse cereals were reviewed during the meeting,” according to an official note.
Last year, the Karnataka government had asked FCI for 0.22 MT of rice which was to be distributed to all BPL families in the state at 10 kg/family a month under the Anna Bhagya scheme. The FCI had initially agreed to supply close to 0.22 MT of rice to the state, however subsequently the food ministry cancelled the rice allocation.
In FY24, the government’s move to offload rice to bulk buyers through weekly e-auction did not find encouraging response from the trade. Only 0.19 MT of rice was offloaded through OMSS to bulk buyers at Rs 2900/quintal.
Given the surplus rice stocks and robust kharif sowing, the government is also considering relaxing the restrictions on the grain’s trade. It may allow increased shipments of rice varieties under government-to-government (G2G) contracts from its stocks and may even lift some of the general export restrictions imposed last year.
States including Punjab, Haryana, Madhya Pradesh, Rajasthan, Odisha, Chhattisgarh, Andhra Pradesh and Telangana are rice and wheat surplus and contribute significantly to the central pool stock through the minimum support price (MSP) procurement.
This article has been republished from The Financial Express.