Karnataka Cong govt’s food grain guarantee takes a hit, Centre stops rice, wheat sale by FCI to states

Siddaramaiah says Centre trying to block its scheme, after FCI had cleared sales to it; Centre cites “rising prices” for excluding state govt schemes from open FCI sales

The "Government of India will be responsible" for any delay in supplying grains, Siddaramaiah said. (PTI)

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IN A SETBACK to the Karnataka Congress government’s plans to roll out its second guarantee, the Anna Bhagya scheme providing 10 kg food grains per person per month to all BPL families, the Union government has stopped the sale of wheat and rice from Food Corporation of India (FCI) stocks to state governments.

Chief Minister Siddaramaiah accused the BJP government at the Centre of taking a “political decision” to prevent Karnataka from supplying grains to the poor.

He said his government had sought 2.28 lakh metric tonnes (MT) from the FCI to supply grains under the Anna Bhagya scheme, and that on June 12, the FCI sent two letters agreeing to supply around 2.22 lakh MT.

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A day later, on Tuesday, came the directive by the Union Ministry of Consumer Affairs, Food and Public Distribution discontinuing the sale of wheat and rice from FCI stocks.

The directive, copies of which were shared by the CMO Wednesday, says: “FCI may liquidate rice under Open Market Sale Scheme (Domestic) (OMSS-D) to Private Parties from central pool stock, as per requirement, in order to moderate prices… The sale of wheat and rice under OMSS(D) for State Governments is discontinued.”

The letter makes exceptions for the Northeast, hilly states and states facing law and order situation or natural calamities.

In response to The Indian Express, the Food Ministry called the measure part of steps to check prices. “In order to ensure that the inflationary trends are kept under control while ensuring adequate stock levels in the Central pool, it has been decided to exclude State Govts’ scheme from the ambit of the OMSS(D), this time,” the ministry said.

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Siddaramaiah claimed the Centre was stopping FCI sale to states despite sitting on rice stocks of seven lakh tonnes. The state is largely looking at buying rice from the FCI, and not much wheat.

As per data available on the FCI website, on June 1, the rice stock in the Central pool stood at 262.23 lakh MT and the unmilled paddy stock at 226.85 lakh MT (equal to 152 lakh MT rice).

An official said up to 87 lakh MT of wheat and 270 lakh MT of rice available in the Central pool could be offered for sale under the OMSS(D), if required, to curb prices of foodgrains.

The ministry told The Indian Express that the first open market auction of wheat and rice through the FCI was planned for June 28. “In this OMSS(D), the quantity that a bidder can purchase in a single bid ranges from 10-100 MT. During the earlier sale, the maximum quantity allowed was 3,000 MT per bid for a buyer. The quantities have been reduced this time to accommodate more small and marginal buyers and to ensure a wider reach of the scheme. This will facilitate the release of stocks sold under the OMSS(D) to the general public immediately,” it said.

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The monthly expenditure set aside by the Congress government in Karnataka for the Anna Bhagya scheme is Rs 840 crore, on the expectation of acquiring rice at a rate of Rs 36.6 per kg from the FCI.

Siddaramaiah said Karnataka had approached rice-cultivating states such as Chhattisgarh, Telangana as well as agencies that provide rice to ensure the rollout of the scheme from July 1. “We will try to provide grains irrespective of the extent of the conspiracy… The Government of India will be responsible (for any delay),” he said.

The CM added that before announcing the Anna Bhagya rollout, his government had written a letter to the FCI on June 6. “I spoke to the Deputy General Manager of FCI who agreed to provide grains at a rate of Rs 34 per kg and Rs 2.60 transport charge per kg… After agreeing to it, they wrote two letters to us on June 12,” Siddaramaiah said, adding that these included a promise to sell 2.08 lakh metric tonnes of rice for July under the OMSS(D), plus another 13,819.485 tonnes.

“A day later, on June 13, a political decision was taken (to stop FCI sales to states),” Siddaramaiah said. “The Central government is trying to scuttle (the scheme).”

As per data available on the Department of Consumer Affairs website, the all-India daily average retail price of rice was Rs 39.81 on Wednesday (it was about Rs 36.3 a year ago), and the average wholesale price Rs 3,487.84 per quintal (it was Rs 3,148.88 a year ago).

Countering Siddaramaiah’s claims, BJP general secretary C T Ravi said that if the CM cannot arrange 10 kg rice per person, he should transfer the market price of the rice to the bank accounts of the poor. “It is the Narendra Modi-led BJP government which is giving 5 kg rice to all the poor families of the state,” he said.