07/07/2020 - Agriculture

KEY POINTS

·         It is presumed that, for a large country like India with a 1.37-billion population, much of the food has to be produced at home.

·         So, in that sense, the biggest reform of the last three decades that has given aatmanirbharta in food is the correction of the exchange rate, coupled with the gradual integration of India with the world economy.

·         However, if one were to look at agriculture and chalk out a strategy where exports can be augmented and imports compressed, we need to keep in mind the principle of “comparative advantage”. That means exporting more where we have a competitive edge, and importing where we lack competitiveness.

·         Rice and sugar are quite subsidised through free power and highly subsidised fertilisers, especially urea. Together, the power and fertiliser subsidies account for about 10-15% of the value of rice and sugar being produced on per hectare basis.

·         Thus, quite a bit of such “revealed comparative advantage” in rice and sugar is hidden in input subsidies. This leads to increased pressure on scarce water and highly inefficient use of fertilisers. It may be worth noting that almost 75% of the nitrogen in urea is not absorbed by plants. Either it evaporates into the environment or leaches into groundwater, making it unfit for drinking.

·         On the agri-imports front, the biggest item, edible oil, is worth about $10 billion (in quantity terms, about 15 mt plus). This is where there is the need to create aatmanirbharta, not by putting high import duties.

·         But by creating competitive advantage through augmenting productivity and recovery ratio of oil from oilseeds, and in case of palm oil, from fresh fruit bunches. While mustard, sunflower, groundnuts, cottonseed have potential to increase oil production to some extent, the real potential lies in tapping oil palm. This is the only plant that can give about four tonnes of oil on per hectare basis.

·         India has about two million hectares area suitable for oil palm cultivation, which can give 8 mt of palm oil. But, it needs a long-term vision and strategy. 

Great reform often emerges unexpectedly from the shadow of a profound crisis. In current corona crisis, self-reliance in the agriculture sector, by way of working on "oil palm crop" - is one such threshold in the journey of "Atmanirbhar Bharat".

Palm oil is an incredibly efficient crop, producing more oil per land area than any other equivalent vegetable oil crop. India has about "two million hectares area suitable for oil palm cultivation, which can give 8 mt(million tonnes) of palm oil". 

>>> Significance of oil palm crop to become  self-reliant in agriculture :

- An excellent substitute of vegetable oil  import  : In terms of oil yield, a palm plantation is "10 times more productive" than soybean, sunflower or rapeseed cultivation because the palm fruit and kernel both provide usable oil. 

- Sustainable vegetable oil : In terms of yield,  it requires "one-ninth of land" used by other vegetable oil crops. This is the only plant that can give about "four tonnes of oil on per hectare basis".

- Source of livelihood for millions of farmers : 

The fact is that, palm oil is also the common ingredient in packaged food, shampoo, toothpaste and cosmetics, makes the impact of the biofuel far bigger.

>>> Competitive advantage in agriculture through oil palm crop :

- Competitiveness in agri produce  can be improved by increasing productivity of palm oil crop and recovering ratio of oil from oilseeds.

- For this, we need to devise a "sustainable framework across the palm value chain". 

- It means having a set of environmental and social criteria at each stage of the value chain which must be complied with, in order to produce "sustainable palm oil".

>>> Way forward :

- Oil seeds cultivation needs a gestation period of 4-5 years. Govt must support farmers in this period.

- Oil palm has the maximum potential to increase domestic edible oil output. Domestic oil palm production can replace nearly 50% of edible oil imports. Hence this must be incentivized in states of Andhra Pradesh, Karnataka and Tamil Nadu where it is suitable for cultivation.

- Processing capacities must be enhanced to create economies of scale.

>>> Conclusion:

By improving competitiveness of Indian agriculture, self reliance can be achieved. Oil palm in particular needs emphasis through long term vision and strategy.

please review

Greetings,

Please review my answer.

Thanks 

sir kindly review

thank you