5 min readNew DelhiJul 10, 2023 11:56 AM IST
First published on: Jul 9, 2023 at 08:37 PM IST
DAYS AFTER the Centre discontinued sale of rice to states including Karnataka under the Open Market Sale Scheme – Domestic (OMSS-D) and asked the Food Corporation of India (FCI) to e-auction grains in the market to control rising prices, it turns out there were not many buyers last week with FCI receiving bids for only 170 metric tonnes despite 3.86 lakh metric tonnes of rice on offer.
In the e-auction on July 5, FCI offered to sell 3.86 lakh metric tonnes of rice across 19 states and NEF (North East Frontier) region, a maximum of 1.5 lakh metric tonnes was for Punjab, followed by Tamil Nadu (49,000 metric tonnes) and Karnataka (33,000 metric tonnes). FCI, however, received bids in three states — Maharashtra (70 metric tonnes), Gujarat (50 metric tonnes) and Karnataka (40 metric tonnes) – and the NEF Region (10 metric tonnes), according to information available on the website of M Junction Services Ltd, a platform through which the FCI conducted the auction.
No sale happened in the remaining 16 states of Himachal Pradesh, Arunachal Pradesh, Tamil Nadu, Punjab, Bihar, Jammu & Kashmir, Andhra Pradesh, Odisha, Nagaland, Delhi, Kerala, Uttar Pradesh, West Bengal, Jharkhand, Uttarakhand, and Rajasthan. In these auctions, only private players can participate, and not state governments. The weighted average selling price of rice was Rs 3,175.35 per quintal against the reserve price of Rs 3,173 per quintal across the country.
An email seeking response from the Ministry on the e-auction response remained unanswered.
Less than a month ago, the Karnataka government had sought 2.28 lakh metric tonnes from FCI to provide 10 kg food grains per person per month to all BPL families free of cost under the Anna Bhagya scheme. In two letters dated June 12, FCI had agreed to supply around 2.22 lakh metric tonnes.
A day later, the Union Ministry of Consumer Affairs, Food and Public Distribution, directed FCI against selling grains to state governments. On June 14, the FCI cancelled its orders to allocate rice to Karnataka.
FCI Chairman and Managing Director KK Meena had on June 23 that the Centre had directed the FCI to conduct the e-auctions of wheat and rice to check inflationary trends in prevailing retail prices as a part of market intervention. In response to a query by The Indian Express on June 14, the Union Food Ministry had said, “In order to ensure that the inflationary trends are kept under control while ensuring adequate stock levels in the Central pool it has been decided to exclude State Govts’ scheme from the ambit of OMSS(D), this time.”
ExplainedThe Centre’s worries
The FCI had enough stock to meet Karnataka’s request for rice. But two issues probably weighed on the Centre’s mind. One, if prices rise then FCI should have enough stock to effectively intervene in the market. Two, what if other states make similar demands — with elections round the corner, political parties can make promises, and then knock at FCI doors for more grains.
Data available on the Department of Consumer Affairs website does show that the all-India daily average retail price of rice on July 8 at Rs 40.15 per kg on July 8 is 9.94 per cent higher than Rs 36.52 a year ago. The all-India daily average wholesale price of rice was recorded at Rs 3,522.54 per quintal, which is 10.52 per cent higher than Rs 3,187.25 per quintal a year ago.
Officials said if other states start demanding additional quantities of rice for their schemes like Karnataka, it will become very difficult to meet their demands. Besides, pointing to the NSSO survey of 2011-12, they said, the monthly per capita consumption of rice stood at 5.622 kg in rural areas of the state and 5.213 kg in urban areas. The all-India average monthly consumption stood at 5.976 in rural areas and 4.487 kg in urban areas.
Before June 13, states were allowed to purchase rice (including fortified rice) from FCI for their own schemes at the rate of Rs 3,400 per quintal (Pan India). The states were allowed to purchase rice without participating in e-auction. Information on FCI website shows that the state purchased 1.16 lakh metric tonnes of rice without participating in e-auctions under the OMSS till May 25 in 2023, of which 97 per cent (1.12 metric tonnes) was purchased by Karnataka alone.
FCI Chairman and Managing Director KK Meena had on June 23 that the Centre had directed the FCI to conduct the e-auctions of wheat and rice to check inflationary trends in prevailing retail prices as a part of market intervention. (File) 
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