Centre to Boost Oil Palm Farming

Centre to Boost Oil Palm Farming

Part of: GS Prelims and GS – II – Education

In news The Centre will offer price assurances, viability gap funding and planting material assistance to oil palm farmers to boost domestic production and reduce dependence on imports via a new mission approved by the Cabinet

• Over a five-year period, the financial outlay for the National Mission on Edible Oils – Oil Palm (NMEO-OP) will amount to Rs. 11,040 crore of which Rs. 8,844 crore is the share of the Central government.
• The Mission hopes to increase oil palm acreage by an additional 6.5 lakh hectares by 2025-26 and grow production of crude palm oil to 11.2 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.
• The government aimed to reduce the risk for farmers facing price fluctuation of the fresh fruit bunches from which oil is extracted, due to volatility in the international market.
• The scheme has a sunset clause, ending November 1, 2037.
• an assessment by the Indian institute of Oil Palm Research had found 28 lakh hectares across the country which could be safely used for oil palm cultivation. Less than four lakh hectares are currently planted with oil palm.

Price mechanism

• The government will develop a mechanism to fix and regulate palm oil prices. 
• So if the market is volatile, then the Centre will pay the difference in price to the farmers through direct benefit transfer
• This is the first time the Centre will give oil palm farmers a price assurance, with industry mandated to pay the viability gap funding of 14.3% of crude palm oil prices. 
• In a bid to encourage oil palm cultivation in northeastern India and in the Andaman and Nicobar islands, the Centre will bear an additional cost of 2% of the crude palm oil prices in these States.
• The Mission will also more than double the support provided for the cost of planting materials.

What is National Mission on Edible Oil-Oil Palm (NMEO-OP) initiative? 

• Indian Prime Minister recently announced National Mission on Edible Oil-Oil Palm (NMEO-OP) initiative on palm oil production to help increase farm incomes.
• Rs. 11,000 crores over five year period will be invested in the edible oil ecosystem through this mission  
• Objective: To ensure self-sufficiency in edible oil production.
• Aim: To reduce import dependence from 60% to 45% by 2024-25, by increasing domestic edible oil production from 10.5 million tonnes to 18 million tonnes which is a 70% growth target. 
• Farmers will get all needed facilities, from quality seeds to technology. 
• Along with promoting the cultivation of oil palm, this mission will also expand the cultivation of our other traditional oilseed crops. 

News source:TH