The Central Pool of foodgrains has been created primarily to maintain a minimum buffer stock for meeting the unforeseen exigencies like drought, flood and other natural calamities and also for providing foodgrains required for Public Distribution System and the other foodgrain based welfare programmes of the Government. In addition, the FCI on the instructions from the Government, has been resorting to sale of foodgrains i.e. wheat and rice, at predetermined prices to the open market from time to time to achieve the objectives as under:

• To enhance the supply of foodgrains especially during the lean season and thereby to have a healthy and moderating influence on the open market prices.
• To offload the excess stocks in the Central pool and to reduce the carrying cost of fodgrains to the extent possible.
• To save the foodgrains from deterioration in quality and to use foodgrains for human consumption.
• To release valuable storage space for stocks procured during the ensuing marketing season of wheat/rice.

Sale of wheat under OMSS(D)

The Open Market Sale Scheme (Domestic) for wheat was introduced in October, 1993. Various pricing parameters are considered while fixing prices such as like State-wise, Centre wise, Zone wise etc.. Prices of wheat under the OMSS(D) were determined and announced by the Central Government till October, 2000 when the High Level Committee(HLC) of the FCI was empowered to fix these prices. The zone based pricing pattern adopted by the HLC has been switched over to State wise prices since February, 2002 and from February,2003 these State-wise prices are being fixed on the basis of age of the crop. These month wise prices are now being fixed after taking into account the acquisition cost, the average freight to the State from the procuring region and open market prices. A Statement indicating state-wise prices of lustre lost wheat (2001-02) and ‘C’ & ‘D’ Cat. wheat/Sound wheat (crop year-wise) since July, 2005 is at Annex-I. The quantity of wheat sold under the OMSS(D) during the last three years is as under:

The Government has decided to continue open sale of wheat and rice without quantitative restrictions at the prices to be determined by the existing High Level Committee of FCI. A Statement showing the quantity of wheat sold under the OMSS(D) during 2005-06 in various regions of the FCI is at Annex-II.

Sale of Rice Under the OMSS (D)

After suspension of sale of rice under the OMSS (D) in April, 1997, sale of rice in the open market under the scheme was resumed in September, 2000 and, as decided by the Government, the FCI was authorized to undertake open sale of 30 lakh MT of rice in the consuming States. The price was fixed for one year/two years old rice at Rs. 950/- per quintal. Since open sale of rice could not pick up and remained negligible despite all efforts, the FCI, on the instructions from the Government, discontinued open sale of rice w.e.f. 21st August, 2001. Again, as approved by the Cabinet, FCI has been given a target of 10 lakh MT, of rice for sale under the OMSS (D) during the year 2002-2003. As intimated by FCI, the notional price fixed for the open sale of rice at the level of the issue price for export i.e. Rs. 950/- per qtl. which is higher than the prevailing open market prices of comparable grade of rice and there can be no open sale of rice by FCI at this price in the domestic market. However, FCI has been liquidating old stocks and stocks procured under relaxed specifications of rice in the open market through tenders at the rates approved by its High Level Committee.

• ANNEX I
• ANNEX II