Critically evaluate the Open Market Sale Scheme (Domestic) as an instrument for managing FCI's surplus stocks and stabilising open-market prices.

Under the Open Market Sale Scheme (Domestic), FCI e-auctions surplus central-pool grain to add supply to the open market. On 1 July 2025, central-pool rice stood at 377.83 LT against a buffer norm of 135.40 LT [2]. Against that background, the Centre has doubled the 2026-27 rice target from 25 to 50 LMT [1]. OMSS is an effective lever, but a costly and reactive one.

Strengths: managing surplus stocks

• Offloads excess grain: stocks are about 2.8× the buffer norm, so sales cut FCI's carrying cost [2].
• Demand is rising: 25 LMT was sold by 31.10.2026, against 11 LMT a year earlier [1].
• Wider buyer base: a pan-India ₹2,250/qtl rate for ethanol distilleries in 2024-25 [3] tied surplus rice to the Ethanol Blending Programme.

Strengths: stabilising prices

• Transparent price discovery through regular e-auctions to registered bidders.
• Part of a wider package: Bharat Rice for the Southern States, plus weekly stock disclosure on the Food Stock Portal backed by ECA 1955, Sections 6 & 7 [1].

Weaknesses

• Fiscal cost: FCI's economic cost of rice was about ₹39.8/kg in 2024-25 [4], far above the ₹22.5/kg ethanol rate [3]. The food subsidy bill absorbs the gap.
• Weak, price-sensitive uptake: in 2023-24 only 1.62 LMT of rice sold, against 71.01 LMT of wheat [5].
• Ad hoc design: targets and prices change mid-year. The Shanta Kumar Committee called for automatic sales whenever stocks exceed buffer norms, but this is still not a rule [6].
• Leakage: Parliament was told of two cases of diversion of rice meant for ethanol production [7].
• Limited reach: stock limits are still needed until 31.01.2027, which suggests OMSS supply alone is not reaching every region [1].

Overall verdict: OMSS reduces surplus well, but it only partly works as a price stabiliser.

OMSS is a sensible way to turn idle stock into market supply, but it works through yearly decisions rather than a standing rule. The way forward is to:

• adopt a rule-based, stock-linked liquidation policy with reserve prices announced in advance;
• track end-use of OMSS rice;
• prioritise food demand over ethanol quantities.

These steps would put the Shanta Kumar Committee's vision into practice [6]. They would also help OMSS deliver on SDG 2 (Zero Hunger) with fiscal prudence.