New Delhi: The Union Cabinet Wednesday approved a scheme, largely sponsored by the central government, to boost palm oil production in India and reduce its dependence on expensive imports to meet national demand.
The National Mission on Edible Oils-Oil Palm (NMEO-OP) scheme, which has a special focus on the Northeast and the Andaman and Nicobar Islands, will offer cultivators a fixed price on the lines of the minimum support price (MSP). In case of market volatility, farmers will be paid the price difference for their produce via direct benefit transfer (DBT).
The scheme proposes to cover an additional area of 6.5 lakh hectares (lha) under oil palm cultivation by 2025-26, and another 6.7 lha by 2029-30.
It will have a financial outlay of Rs 11,040 crore, with the central government’s allocation at Rs 8,844 crore and the states/UT’s at Rs 2,196 crore.
Addressing the media, Union Agriculture Minister Narendra Singh Tomar said “56 per cent of total edible oil imports come from palm”.
“We have to increase domestic production to reduce both import dependency as well as prices. As of now, palm can be cultivated on 28 lha in the country, out of which 9 lha is in the northeast.”
Oil palm, he added, has one hurdle. “Fruit and profit arrive 5-7 years after planting, making it impossible for small farmers to practise this. Hence, the government is offering price assurance and enhanced input support to promote palm oil production in the country,” Tomar said.
“Also, oil palm produces 10-46 times more oil per hectare compared to other oilseed crops such as mustard, with exponential applications… Thus, it has enormous potential for promotion of its cultivation.”
The scheme was first announced by the government earlier this month, against the backdrop of a spurt in the prices of various edible oils.
The price of palm oil, the most imported edible oil in the country, has 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.
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Assistance for farmers
Under the NMEO-OP, the government aims to increase annual palm oil production to 11 lakh tonnes by 2025-26, and 28 lakh tonnes by 2029-30.
Among other things, the scheme substantially increases the input assistance to farmers for oil palm cultivation, to Rs 29,000/hectare from Rs 12,000/hectare.
To address the issue of planting material shortage, the scheme will also provide seed gardens with assistance of up to Rs 80 lakh/15 hectares in the rest of India, and Rs 100 lakh/15 hectares in the northeast and Andaman regions.
The government’s special focus on palm oil is on account of its vast applications. The price rise meant vanaspati, a cheaper ghee/butter substitute derived from palm oil and mostly consumed by low-income families, got twice as costly.
Additionally, prices of a variety of products where palm oil is used, such as chips, instant noodles, pizza dough, shaving cream, toothpaste, lotions, lipsticks and other personal care items and cosmetics, rose in the same measure.
At its meeting Wednesday, the Cabinet also approved a Rs 77.45 crore package for the revival of state-run North Eastern Regional Agricultural Marketing Corporation Ltd.
“It will help with farming facilities, training, organic seeds, and fertiliser, to promote northeast produce,” said Information and Broadcasting Minister Anurag Thakur, who was also present at the Cabinet briefing.
(Edited by Sunanda Ranjan)
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