Why did the government impose a ceiling on wheat stocks?
To manage the "overall food security and prevent hoarding" the Union government imposed limits on stock of wheat that can be held by traders, wholesalers, retailers, big chain retailers and processes.
Why did the government impose a ceiling on wheat stocks?
• Story?
To manage the "overall food security and prevent hoarding" the Union government imposed limits on stock of wheat that can be held by traders, wholesalers, retailers, big chain retailers and processes.
The objective is to stabilize the price of the essential commodity of steadying supply.
• Why is there a concern?
The moves come in the backdrop of rising concerns about the overall wheat output taking a hit after the unseasonal rains and hailstorms towards the end of March and April.
Lower production leads to higher prices of the crop. This in turn could create conditions for local prices exceeding the government's purchase prices and thus, bothering its endeavour to stock up supplies.
• What are the limits?
The permissible stock for traders/wholesalers is 3000 metric tonnes.
Retailers and big chain retailers can hold upto 10 mt at each of their outlets, while the latter can hold upto 3000 mt at all their depots combined.
Processors would be able to stock 75% of the annual installed capacity.
The above entities are to declare their stock on the Dept of Food and Public Distribution's portal. If the stock held by them are higher than the limit, they will have 30 days to bring them under limits.
• Addtional orders
The government has also decided to offload lakhs of tonnes of wheat from the central pool via the Open Market Sale Scheme (OMSS) to mills, private traders, bulk buyers, manufacturers of wheat products through e-auction. The same would be done for rice also.
• The Food Corporation of India is entrusted with the responsibility to ensure food grains are accessible at reasonable prices to the vulnerable sections of the society under the Public Distribution System.
• PDS is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
• PDS is operated under the joint responsibility of the Central and the State Governments. The FCI sees the procurement, storage, transportation and allocation of food grains to the State Governments.