Mains – 2nd Nov 23
Open Market Sale Scheme
Why in news?
States have been looking at alternative ways of procuring wheat and rice in the aftermath of the Food Corporation of India’s (FCI) quantity restrictions followed by the refusal to allow states to procure the two food grains through its Open Market Sale Scheme (OMSS).
Open Market Sale Scheme
- At first, procurement of food grains like wheat and paddy for the central pool happens in Rabi and Kharif marketing seasons by the FCI and State corporations according to procurement estimates finalised by the government of India before the seasons. These purchases happen as per the Minimum Support Price.
- From the central pool, the government has to set aside wheat and rice for the 80 crore beneficiaries of free foodgrains under the National Food Security Act (NFSA), maintain a buffer stock, and have a marketable surplus.
- Under the Open Market Sale Scheme, the FCI from time to time sells (through e-auctions) surplus food grains from the central pool especially wheat and rice in the open market to traders, bulk consumers, retail chains and so on at pre-determined prices. This is done to enhance the supply of grains especially during the lean season and thereby to moderate the general open market prices especially in the deficit regions.
- Usually, states are also allowed to procure food grains through the OMSS without participating in the auctions, for their needs beyond what they get from the central pool to distribute to NFSA beneficiaries.
Recent Changes
- The OMSS underwent a recent revision with a focus on limiting the quantity that a single bidder can purchase in a single bid.
- Previously, the maximum allowed quantity per bid was 3,000 metric tonnes. However, it has now been reduced to a range of 10-100 metric tonnes.
- The aim of this change is to promote wider participation by accommodating small and marginal buyers.
Discontinuation of OMSS Sales to States:
- The Centre decided to discontinue the sale of rice and wheat from the central pool to state governments under the OMSS.
- Additionally, private bidders are no longer allowed to sell their OMSS supplies to states.
- The rationale behind this decision is to control inflationary trends and maintain adequate stock levels in the central pool.
- Karnataka and Tamil Nadu have criticized the Centre’s decision.
| The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
MSP for a crop is the price at which the government is supposed to procure/buy that crop from farmers if the market price falls below it.
Crops Included The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane. The mandated crops include 14 crops of the kharif season, 6 rabi crops and 2 other commercial crops. Crops covered by MSPs include:
Who decides the MSP? The MSPs are announced by the Union government but its decision on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs and other recommendations made by CACP. MSPs have no statutory backing — a farmer cannot demand MSP as a matter of right. While recommending MSPs, the CACP looks at the following factors:
National Food Security Act 2013
Food Corporation of India
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India – Japan
Why in News?
- Speaking at an event recently, India’s External Affairs Minister Dr S Jaishankar said that India and Japan would rather work to strengthen their “peacetime cooperation”.
About India-Japan Relationship:
- History –
- Japan and India signed a peace treaty and established diplomatic relations in April, 1952.
- This treaty was one of the first peace treaties Japan signed after World War II.
- Recent engagements –
- PM Yoshiro Mori’s visit to India in August 2000 provided the momentum to strengthen the Japan-India relationship.
- Mori and Prime Minister Atal Bihari Vajpayee decided the establishment of “Global Partnership between Japan and India”.
- When Prime Minister Manmohan Singh visited Japan in December 2006, Japan-India relationship was elevated to the “Global and Strategic Partnership”.
- In September 2014, Prime Minister Narendra Modi paid an official visit to Japan and had a summit meeting with Prime Minister Shinzo Abe.
- They concurred to upgrade the bilateral relationship to “Special Strategic and Global Partnership”.
- Cooperation in Security Fields –
- During Prime Minister Singh’s visit to Japan in October 2008, two leaders issued ” Joint Declaration on Security Cooperation between Japan and India”.
- There are also various frameworks of security and defense dialogue between Japan and India including –
- Foreign and Defense Ministerial Meeting (“2+2” meeting),
- Annual Defense Ministerial Dialogue and
- Coast Guard-to-Coast Guard dialogue
- In 2020, both signed the Agreement Concerning Reciprocal Provision of Supplies and Services between the Self-Defense Forces of Japan and the Indian Armed Forces (so-called ACSA).
- Economic Relations –
- India was the 18th largest trading partner for Japan, and Japan was the 13th largest trading partner for India in 2021.
- Japan was the 5th largest investor for India in FY2021.
- Japan’s bilateral trade with India, totalled US$ 17.63 billion in FY 2018-19.
- Economic Assistance –
- India has been the largest recipient of Japanese ODA Loan for the past decades.
- Delhi Metro is one of the most successful examples of Japanese cooperation through the utilization of ODA.
- Besides, Japan and India had committed to build High-Speed Railway in India.
- Japan continues to cooperate in supporting strategic connectivity linking India to Southeast Asia through the synergy between ”Act East” policy and ”Partnership for Quality Infrastructure”.
- Indian Diaspora in Japan: More than 40,000 Indians are residing in Japan.