Beyond the Edible Oil Mission

Why in news?

Recently launched Rs 11,000-crore National Edible Oil Mission-Oil Palm (NEOM-OP) is a bold step to augment domestic edible oil supplies but still much more is needed to boost edible oil production. 

How import-dependent is India?

• 60 % of the edible oil consumed in the country is imported and more than half of this is palm oil
• In FY 2020-21, edible oil imports touched $ 11 billion or about Rs 80,000 crore
• Despite these imports, edible oil inflation in July 2021 was 32.5 %

What are the government initiatives taken in this regard?

• National Edible Oil Mission-Oil Palm (NEOM-OP)
• Oil Palm Area Expansion under Rastriya Krishi Vikas Yojana
• Increasing the MSP of rapeseed-mustard up by 8.6 % recently
• Creation of buffer stock for oilseeds
• Cluster demonstration of oilseed crops

Why is the recent oil palm mission so significant?

• Productivity - Oil palm is the only crop that can give up to four tonnes of oil productivity per hectare under good farm practices
• Area Expansion - The National Re-assessment Committee (2020) has identified 28 lakh hectares suitable for oil palm cultivation but actual area under oil palm cultivation, as of 2020, is only 3.5 lakh hectares
• Thus a huge  potential of area expansion is waiting to be tapped especially in North East, Andhra Pradesh and  Telangana
• The government plans to boost cultivation of oil palm to 10 lakh hectares by 2025-26
• Reduction in imports - Comprehensive assistance package is offered to attract farmers and industries to boost edible oil production in a globally competitive manner thereby reducing the import bill.
• Pricing formula - There will be no MSP, but the price for farmers would be fixed at 14.3 % of average landed CPO price of the past five years, adjusted with the wholesale price index

What is needed beyond the mission?

• Import duty needs to be in sync with rational domestic price policy as recommended by Commission for Agricultural Costs and Prices (CACP)
• Revisit the existing incentive structure that unduly favours rice, wheat and sugarcane through heavy subsidisation of power, fertilisers and MSP
• Devise a crop-neutral incentive structure where cropping patterns are aligned with demand patterns

Source: The Indian Express

Quick Facts

India’s edible oil economy

• India is the world’s largest importer of edible oil with a share of 20.7 per cent, followed by EU and China. 
• 60% of edible oil requirement is met through imports and the  share of palm oil is about 60% of the import bill. 
• India is the second-largest edible oil consuming country. 

Palm oil

• Palm oil is currently the world’s most consumed vegetable oil
• Top consumers are India, China, and the European Union (EU)
• It is used extensively in the production of detergents, plastics, cosmetics, and biofuels