Why Modi govt push for atmanirbharta in palm oil production could come at a cost to environment

The National Mission on Edible Oils-Oil Palm hopes to address a major issue — dependency on imports for edible oils — but given the nature of palm oil farming, has raised concerns.

(Representational image) Oil palm fruit | Flickr @CIFOR

New Delhi: The Modi government’s push for palm oil has led to environmental concerns, particularly for the northeast and the Andaman and Nicobar Islands, the two regions earmarked to improve the country’s edible oil production. 

But the National Mission on Edible Oils-Oil Palm (NMEO-OP) hopes to address a major problem — India is the largest importer of edible oil, over half of which is made up of palm oil imports from countries such as Malaysia and Indonesia. 

The Union Cabinet has approved Rs 11,000 crore for the scheme, with an ambitious target to increase palm oil area production by more than three times. 

But it has also led to environmental concerns, given the nature of palm oil farming and the biodiversity of the regions that the government has earmarked for the push. 

Environmental concerns

There are concerns that water-guzzling crops such as palm, which grows best in tropical areas, will trigger water scarcity and massive reduction of forest cover in biodiverse and ecologically sensitive zones in the northeast and Andaman. 

India’s four biodiversity hotspots fall in the palm oil aspirational regions, two of which are in the northeast (Indo-Burma region) and the Andaman and Nicobar Islands (Sundaland). 

The Indian Express reported that the government’s oil palm mission was also launched despite the Indian Council of Forestry Research and Education saying that the plantations “should be avoided” in biodiversity-rich areas without further studies of their impact. 

Then there are the issues of palm oil plantations being poor forests.  

According to reports, the growth of palm oil plantations has replaced rich tropical ecosystems in southeast Asian countries like Indonesia and Malaysia with monocultures – “green deserts” destroying native animals and plants in the process.

A 2020 Malaysian study found that natural forests were much better carbon sinks compared to oil palm monocultures. The study found that compared to oil palm plantations, forests had a total ecosystem carbon (TEC) stock of 287 tonnes of carbon per hectare compared to just 60.30 to 76.44 tonnes of carbon per hectare in palm plantations. TEC denotes the ability of the plantation to absorb carbon dioxide. 

Malaysia, along with Indonesia, accounts for 85-90 percent of the world’s palm oil production.

India’s national palm oil mission

The National Mission on Edible Oil-Oil Palm (NMEO-OP) hopes to end India’s dependency on imports for cooking oil.

It will offer farmers an assured fixed price on the lines of the minimum support price (MSP). As reported earlier by ThePrint, in case of market volatility, palm oil farmers will be paid the price difference via direct benefit transfer (DBT). 

The scheme will also increase planting material assistance from Rs 12,000/hectare(ha) to Rs 29,000/ha with special assistance of Rs 250/plant to rejuvenate old gardens. The government said that it will fix a formula price, on a monthly basis derived from 14.3 per cent of the crude palm oil market prices.

Such numerous incentives are needed because palm trees produce fruits ready for oil extraction only after 4-5 years of planting, making cultivation impossible for small farmers.

Moreover, according to estimates, palm produces 10-46 times more oil/ha than other oilseed crops, making it a leading candidate with enormous cultivation potential.

Under NMEO-OP, the government aims to cover an additional 6.5 lakh ha under oil palm by 2025-26 to touch 10 lakh ha. Also, production of palm oil is targeted to increase to 11.20 lakh tonnes by 2025-26 and 28 lakh tonnes by 2029-30.  

This is based on an assessment by the Indian Institute of Oil Palm Research (IIOPR), which said that the country has palm cultivation potential of 28 lakh ha.

To address planting material shortage, seed gardens will be given Rs 80 lakh/15ha, which will be increased to Rs100 lakh/15ha in northeast and Andaman. Capital assistance will also be given to the industry in the northeast and the Andamans. 

The NMEO-OP financial outlay is Rs 11,040 crore, of which the central share is Rs 8,844 crore while that of the states stands at Rs 2,196 crore.

Need for palm oil

Annual edible oil demand in the country is around 25 million tonnes, 13 million tonnes of which is met by imports. Palm oil accounts for over 55 per cent of these imports, making India the largest palm oil importer in the world.

Such heavy import dependence makes the country vulnerable to international price fluctuations, which was witnessed this year due to the second Covid-19 wave. 

The price of palm oil increased by over 60 per cent in the past year to Rs 138/kg as of 1 June 2021 from Rs 86/kg on 1 June 2020 — its highest recorded price in the last 11 years.

The government’s special focus on palm oil is also due to its vast application, involving commercial and domestic usage. Palm oil price rise doubled the cost of vanaspati, a cheaper ghee/butter substitute derived from it, which is mostly consumed by low-income families. 

Possible way out

There is, however, hope that palm oil can be sustainably cultivated in the country. 

Dr Siddappa Setty R., fellow and convenor at Ashoka Trust for Research in Ecology and Environment’s Centre for Environment and Development, told ThePrint, “A solution would be to grow oil palm on agricultural land if farmers are willing to do it and the government incentivises it.” 

“In my opinion, man-made oil palm plantations shouldn’t be included in the definition of a forest, especially if they are going to replace forest cover, because they cannot support the same level of biodiversity,” he added.

A report in the Hindustan Times noted that given that the current definition of a forest in India includes oil palm plantations, the potential loss of rainforest cover could go unaccounted for. 

Due to the pervasive nature of palm oil and its products, it can be difficult to avoid. 

However, it’s possible to purchase palm oil products certified sustainable. The Roundtable on Sustainable Palm Oil, the world’s largest association for ethical palm oil production, certifies some palm oil as sustainable owing to its certified social and environmentally responsible production, and one can prefer its label for various products.

(Edited by Arun Prashanth)