Context: Supply disruptions during the pandemic and the Russia-Ukraine war have led many nations to think about self-sufficiency in critical food items
Examples include Russia’s export ban on wheat and sunflower oil, Ukraine’s ban on exports of food staples, Indonesia’s ban on palm oil exports, Argentina’s ban on beef exports, Turkey, Kyrgyzstan and Kazakhstan’s ban on a variety of grain products, and India’s wheat export ban.
Sudden actions such as these exacerbate the pressure on global trade leading to a spike in the prices of these commodities, threatening the food security of net food-importing countries.
Thus such disruptions in supply chain had made India to rethink about self-sufficiency in critical food items or at least reduce their excessive dependence on imports of essential food products.
Stats
India agri-exports in FY22 touched $ 50.3 billion against its agri-imports of $ 32.4 billion.
This means that Indian agriculture is largely globally competitive.
But its biggest agri-import item, edible oil, accounts for 59 per cent of India’s agri-import basket.
India’s edible oil import bill in 2021-22 (FY22) crossed $19 billion
Palm oil comprises more than 50 per cent of India’s edible oil imports, followed by soybean and sunflower.
India imports 55 to 60 per cent of its edible oil requirements.
The excessive dependence on imports has raised the pitch for atmanirbharta in edible oil.
Thus the GoI launched National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021
National Edible Oil Mission-Oil Palm (NEOM-OP) in 2021
It aims raise the domestic production of palm oil by three times to 11 lakh MT by 2025-26.
This will involve raising the area under oil palm cultivation to 10 lakh hectares by 2025-26 and 16.7 lakh hectares by 2029-30.
Features:
The special emphasis of the scheme will be in India’s north-eastern states and the Andaman and Nicobar Islands due to the conducive weather conditions in the regions.
Under the scheme, oil palm farmers will be provided financial assistance and will get remuneration under a price and viability formula.
Significance of the Scheme:
Reduction in Import dependence – India is the largest consumer of vegetable oil in the world.
Rise in Yields – India produces less than half of the roughly 2.4 crore tonnes of edible oil that it consumes annually, with financial assistance and guidance there will be rise in the yield.
Food Security
Concerns
Achieving atmanirbharta in edible oils would require an additional area of about 39 million hectares under oilseeds.
Such a large tract of land will not be available without cutting down the area under key staples (cereals) – this could endanger the country’s food security
Long gestation period crop it takes four to six years to come to maturity affecting farmers income
Price volatility
Way Forward
A rational policy to reduce import dependence in edible oils and achieve food security without affecting other essential crops
Supporting farmers during gestation period with incentives and opportunity cost of their lands
Proper pricing formula that take into account the price volatility
Declare oil palm as a plantation crop and allow the corporate players to own/lease land on a long-term basis
