Centre Reduces FCI Rice Price by Rs 550 to Rs 2,250 per Quintal for States and Ethanol Producers

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 Rs 2,250 per quintal, down by Rs 550, for states and ethanol producers. This move aims to enhance sales and bolster food security initiatives.

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State governments and state-run corporations can now acquire up to 12 lakh tonnes of rice at this reduced rate. Ethanol distilleries have a higher purchase limit of up to 24 lakh tonnes. Previously, both categories had a reserve price of Rs 2,800 per quintal. The revised pricing will be in effect until June 30, 2025.

Focus on Food Security and Ethanol Production

The OMSS policy is designed to improve food security and ensure rice is distributed efficiently to various stakeholders. The government stated that this decision underscores its commitment to helping states meet their welfare scheme responsibilities while also promoting ethanol production.

Private traders and cooperatives will continue paying Rs 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 slightly lower price of Rs 2,400 per quintal.

Specific Purchase Guidelines

The sale of rice to states under OMSS is limited to non-surplus regions that need additional supplies. Bharat brand rice sales are not allowed to private millers but are permitted for hostels, religious institutions, hospitals, and charitable organisations.

The Food Ministry has instructed that the third cycle tender for approximately 110 crore litres of ethanol during the 2024-25 period should utilise FCI rice. Preference should be given to older rice stocks where possible.

Market Dynamics and Price Stabilisation

This revision comes as rice sales have been relatively low compared to wheat under the same scheme. The 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 reflects its dedication to supporting states in fulfilling their welfare scheme obligations while encouraging ethanol production. This policy adjustment is expected to have a positive impact on both food security and market stability.