India will launch an oil seeds mission soon, entailing investments of `11,000 crore in the “cooking oil eco system”, Prime Minister Narendra Modi said on Monday.
The move comes amid repeated instances over decades of surging edible oil prices stoking food inflation and high imports of these items straining the country’s current account.
Import dependence on edible oils is as high as 60%, with the import bill hovering around Rs 75,000 crore per year.
As reported by FE earlier, after crude petroleum and coal, edible oils are threatening to strain India’s current account, with imports of these items seen surging 65% on year to $17 billion in the 2020-21 oil year (November-October) due to a spike in global prices. The government appropriates more than a third of the import value through high import taxes on edible oils, which range from 30% to 49.5% at present.
According to official sources, Modi is likely to announce details of the plan during his address to the nation on Independence Day.
“It has been resolved to start a National Edible Oil and Oil Palm Mission for self-reliance in edible oil. Through this mission, more than Rs 11,000 crore will be invested in the cooking oil ecosystem,” Modi said. He was addressing farmers after presiding over a function marking the distribution of Rs 19,500 crore to 9.75 crore farmers under the income support scheme ‘Pradhan Mantri Kisan Samman Nidhi’ (PM-Kisan) on Monday.
The government will ensure that farmers get all the facilities, from quality seeds to technology, the PM said, adding that along with oil palm cultivation, growing of other traditional oilseed crops also be given a boost under the proposed mission.
“The thousands of crores that we [pay] abroad to buy edible oils should be given to the farmers of the country. There is every possibility for increasing cultivation of oil palm in India, particularly in the northeast and Andaman-Nicobar Islands.”
Yoga guru Baba Ramdev’s Patanjali group-led Ruchi Soya is reportedly planning to start palm oil plantations in Assam, Tripura, Meghalaya and Manipur, for which filed surveys have been completed, according to a PTI report this month. The oil palm plantations will be set up through contracts that guarantee farmers a buyback by Ruchi Soya’s processing plants to be set up in those states.
The agriculture ministry had proposed a five-year plan of the edible oil mission at an estimated expenditure of `19,000 crore to reduce import of edible oils such as palm and soybean oil.
As high edible oil prices in the country increased food inflation and generated public resentment, the government in June had slashed basic import duty on crude palm oil to 10% from 15%. But the agri cess (17.5%) and social welfare cess (10%) were unchanged, making effective duty 30.25%. Refined oils of all varieties attract higher duty.
A big rise in global prices would likely push the import bill to Rs 1.26 lakh crore in the current oil year (November-October), against `75,000 crore last year, BV Mehta, executive director of Mumbai-based Solvent Extractors’ Association of India (SEA) had said prior to the cut in import duty. The government would garner around `45,000 crore from the import taxes on edible oils this year, Mehta had said.
Though production of oilseeds has risen a bit in the last few years, it is highly inadequate to make any significant impact on India’s annual edible oil import bill. Oil seeds output has increased to 37.31 million tonne (MT) in 2020-21 from 27.51 MT in 2014-15, while the area has gone up to 28.82 million hectares from 25.99 million hectares during this period. The overall yield has increased to 1,295 kg/ hectare from 1,075 kg/ hectare. The availability of edible oils from domestic production is around 8 MT against annual consumption of over 21 MT, industry data show.
Source:financialexpress.com