A group of flour millers under the aegis of North Indian Flour Millers Federation (NIFMF) has urged the government to review the current uniform pricing policy under the Open Market Sale Scheme (OMSS) as it has affected market efficiency and discouraged non-governmental procurement.

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In a letter addressed to Food Minister Piyush Goyal and Food Secretary Sanjeev Chopra, NIFMF President Sanjay Puri said: “Currently, atta (wheat flour) prices vary significantly across different regions, despite a uniform wheat price nationwide (under OMSS). This discrepancy indicates that the benefits of the transport cost subsidy are not being passed on to consumers,” Puri said.

According to NIFMF, the ex-mill price of atta in Delhi (North) is ₹2,600/quintal, Hyderabad (South) is ₹3,500/quintal, Kolkata (East) is ₹Rs 3,100/quintal and Mumbai (West) ₹3,120/quintal. Whereas the reserve price has been fixed uniform at ₹2,125 for URS (under relaxed specification) type and ₹2,150/quintal for FAQ (fair average quality).

Buy direct from farmers

“We traditionally purchase wheat directly from farmers at harvest and maintain limited stocks for the off-season. Beyond this, our reliance shifts to the Food Corporation of India (FCI) due to our financial and storage limitations,” Puri explained in the letter, sent to the minister on February 26.

Admitting that OMSS scheme played a critical role in ensuring grain availability and stabilising wheat and flour prices, he said FCI used to traditionally sets wheat prices at auctions based on a base price at major growing and procurement locations such as Ludhiana, plus transportation and handling costs, offering buyers the option for delivery at specific depots or to arrange their own transportation.

“However, we are concerned about the recent shift to a uniform pricing model across India... Although designed to achieve pricing standardisation, this policy inadvertently leads to a subsidy on handling and incidental expenses (approximately ₹95 per quintal), in addition to freight costs, thereby further widening the gap between the economic cost (₹2,700/quintal) and the auction reserve price at auction (₹2,125/quintal). This measure, rather than benefiting the intended recipients, disrupts market equilibrium, discourages direct procurement by non-governmental players, and adversely affects farmers, the milling industry, and the consumer demographic alike,” Puri said.

Such inconsistencies burden the food subsidy system, discourage millers from purchasing at harvest, and place undue pressure on government procurement, disrupting market dynamics, the letter said.

The government has already sold about 9 million tonnes of wheat through weekly e-auction to processors since June 28 and may soon stop in northern states once procurement of fresh crop begins.