Centre's Rice Allocation Policy Receives Support from Opposition-Ruled States

India’s rice policy aims at ensuring food security and supporting farmers. The government implements Minimum Support Price (MSP) to provide a guaranteed price to farmers for their rice crops. It also procures rice from farmers at MSP to maintain buffer stocks.

Additionally, the government implements various schemes to distribute rice to low-income households at subsidized rates through the Public Distribution System (PDS).

On Monday, the Centre announced that it has received backing from Food Ministers of 16 out of 17 states, including Bihar, Rajasthan, Tamil Nadu, and Jharkhand, regarding the rice allocation and sales policy. This support comes amidst the controversy surrounding the low demand in open sales e-auctions, with the explanation given that buyers may not be fully aware of the opportunities available.

Furthermore, the Food Corporation of India (FCI) has denied Karnataka's request for additional rice.

Blame on Karnataka

Food Secretary Sanjeev Chopra, in a veiled mention of Karnataka's dissent, informed reporters that all states except one expressed their support for the policy, emphasizing that it should not be tailored to benefit a single state.

This statement was made following a Food Ministers' meeting held last week. The central topic of discussion during the conference was whether the Central Pool stock should be utilized for retail operations to lower market prices or allocated to specific states to enhance distribution among NFSA beneficiaries.

Not Feasible

Highlighting the current annual requirement of 360 lakh tonnes of rice for distribution through ration shops and welfare schemes, Chopra stated that if all states demanded an additional allocation of the same quantity, the total requirement would reach 720 lakh tonnes. However, the annual rice procurement is only around 560-570 lakh tonnes.

In the first auction of the open market sale scheme (OMSS) on July 5, the Food Corporation of India (FCI) managed to sell only 170 tonnes of rice out of the offered 3.86 lakh tonnes, which accounts for a mere 0.04% of the total.

Chopra acknowledged the significance of the signal conveyed by the auction results, despite the lacklustre response, and stated that the government is open to implementing necessary changes if required. When asked about increasing availability without ensuring offtake, he explained that the rice auction has just begun and there are still nine months remaining. He expressed a willingness to observe the situation and make adjustments accordingly.

Chopra also mentioned that the rice auction is being conducted for the first time in many years, as previously only wheat was auctioned in the open market. He suggested that people may not be fully aware of the auction process, and the Food Corporation of India has taken measures to raise awareness among potential buyers.