What is the issue?
- There is a rising dependence on imports for meeting the edible oils demand.
- The excessive reliance on external sources for an essential item of mass consumption is a risky fact.
How dependent are we?
- The dependence on imports for meeting the edible oils demand has gone up to 70%, since the early 1990s.
- This is projected to move up in the next.
- The bulk of imports are of palm oil and that too from just two countries, Malaysia and Indonesia.
What are the causes?
- This is largely a result of successive governments' policies favouring imports over home grown oils.
- Import duties on palm oil have been kept low enough to enable it to outdo indigenous oils.
- This has been so regardless of the fact that India can produce enough oilseeds to meet the local requirement.
What is the impact?
- Domestic units - Most of the units of edible oil industry were shut down.
- The remaining ones are also operating at below their capacities.
- Some of the units are surviving by mixing low-priced palm oil with superior indigenous oils and selling them.
- Overdependence – The risk of excessive reliance is that any disruption in supply can cause a huge upset in the Indian market.
- Unrest - The recent uprising of the Patidars (Patels) is partly due to this issue.
- They are predominantly groundnut growers in Gujarat and soybean farmers in Madhya Pradesh.
- The erosion of profitability of growing oilseeds due to the ill-advised policies is leading to unrest in the community.
- Besides, the mustard growers of Punjab and Haryana are also equally affected by this.
What should be done?
- Oilseeds Technology Mission – It was set up in 1986 when import dependence had risen to worrying levels.
- It involves -
- Promoting better technology and greater use of yield-enhancing inputs.
- Laying down an optimum band, within which local prices of oilseeds and edible oils can be allowed to fluctuate freely.
- Market interventions by government agencies only when prices tended to breach the limits to farmers' or consumers' disadvantage.
- India’s oilseed output nearly doubled as a result of this plan by 1992-93. So this could now be considered.
- Indian oilseed researchers have developed technologies that can raise the average yield of these crops.
- ICAR has even identified additional area, mostly fallow land kept untilled after the kharif harvest, to be utilised for oilseeds.
- These steps could boost the overall production.
Source: Business Standard