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Centre’s Rice open market scheme to ease Punjab’s storage pangs

The Union ministry’s open market sale scheme (OMSS) offers subsidized rice at ₹2,250 per quintal to ethanol producers, traders, and cooperatives, easing Punjab’s storage woes. This will help free space in godowns and support ethanol production. Experts believe the scheme benefits farmers and industry, though traders also seek subsidized wheat to address rising flour prices.

Punjab’s storage woes may soon ease with the Union ministry of consumer affairs, food and public distribution, announcing an open market sale scheme (OMSS) to offer subsidised rice to stakeholders, including ethanol producers, traders and cooperatives.

Rolled out last week, the scheme aims to support states in meeting their obligations under state-run programmes, enhance food security and boost ethanol production as part of the national energy strategy.

Under the scheme, the reserve price of rice has been set at ₹2,250 per quintal—significantly lower than the minimum support price (MSP) of ₹2,900 per quintal. This rate applies to sales made to state governments, state government corporations and community kitchens without requiring participation in e-auctions. For ethanol distilleries, the reserve price remains the same at ₹2,250 per quintal.

Experts believe this scheme will benefit the ethanol industry and help create additional storage space for foodgrains in Punjab. Storage shortages in state godowns have disrupted smooth procurement operations, a challenge witnessed during last year’s rabi (wheat) procurement season.

Currently, 145 lakh tonnes of foodgrains are stored in Punjab’s godowns, with 115 lakh tonnes of freshly shelled rice awaiting storage. Additionally, the state government anticipates procuring 120 lakh tonnes of wheat starting April 1. However, Punjab’s godown capacity is limited to 174 lakh tonnes, highlighting the urgent need for storage solutions.

According to Rana Inder Partap Singh, an ethanol plant owner in Punjab, the scheme is beneficial for ethanol producers, farmers, rice millers and state agencies. “It will help evacuate rice stocks from the state, addressing a significant concern for all stakeholders,” he said.

The ethanol industry, in particular, welcomes the price reduction. Previously, a quintal of rice for ethanol production cost ₹2,900, making the ₹650 per quintal price cut a substantial relief. Punjab’s 10 ethanol manufacturing plants require approximately 35 lakh tonnes of raw material annually.

General manager of Food Corporation of India, Punjab, B Srinivasan, noted that the initiative would help the state government manage its grain stockpile more effectively. However, he added that implementation might take time as stock limits for the scheme’s various categories are yet to be finalised.

Grain trader Naresh Ghai from Rajpura expressed mixed views, stating that while the scheme benefits the ethanol industry, Punjab also needs subsidised wheat stocks to address the acute shortage of wheat, which has driven up flour prices in the state.

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Source : Hindustan Times

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