Centre Reduces FCI Rice Price to ₹2,250 per Quintal for States and Ethanol Producers
Price Reduction Under OMSS
The Indian government has reduced the reserve price of rice from the Food Corporation of India (FCI) under the Open Market Sale Scheme (OMSS). The new price is ₹2,250 per quintal, a decrease of ₹550, for state governments and ethanol producers. This measure is intended to boost sales and support food security initiatives.
Purchase Limits and Validity
State governments and state-run corporations are now eligible to purchase up to 12 lakh tonnes of rice at this reduced rate, while ethanol distilleries can acquire up to 24 lakh tonnes. Previously, both categories had a reserve price of ₹2,800 per quintal. The revised pricing will remain effective until June 30, 2025.
Dual Objectives: Food Security and Ethanol Production
The OMSS policy aims to improve food security and ensure efficient rice distribution. The government stated that this decision reflects its commitment to helping states fulfill their welfare scheme responsibilities, while also promoting ethanol production.
Pricing for Private Traders and Cooperatives
Private traders and cooperatives will continue to pay ₹2,800 per quintal for FCI rice. However, central cooperatives such as Nafed, NCCF, and Kendriya Bhandar selling under the Bharat brand will pay a reduced price of ₹2,400 per quintal.
Purchase Guidelines and Restrictions
The sale of rice to states under OMSS is restricted to non-surplus regions that require additional supplies. Bharat brand rice sales are not allowed to private millers but are permitted for hostels, religious institutions, hospitals, and charitable organizations.
Ethanol Production and Rice Stocks
The Food Ministry has directed that the third cycle tender for approximately 110 crore litres of ethanol during the 2024-25 period should utilize FCI rice. Preference should be given to older rice stocks where possible.
Market Impact and Price Stabilisation
This revision comes as rice sales have been relatively low compared to wheat under the same scheme. This initiative aims to increase availability and stabilise prices in the open market. The FCI manages rice stocks through weekly e-auctions as part of this effort.
The government’s decision underscores its commitment to supporting states in meeting their welfare obligations while also encouraging ethanol production, and is expected to positively impact food security and market stability.
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