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Farm min working with NITI Aayog on ways to stem edible oil imports

Farm min working with NITI Aayog on ways to stem edible oil imports

Wednesday, Jun 26

By Kaushal Verma

NEW DELHI – The farm ministry is working with government think tank NITI Aayog to devise ways to stem huge imports of edible oil in the country, and support the industry and domestic oilseed growers, a senior government official said today.

"Agriculture ministry with NITI Aayog are studying the measures to restrict hefty imports of palm oil in the country. The imports cost over 70,000 crore (700 bln) rupees to the state's exchequer (annually)" the official said.

India, the world's top buyer, imports 14-15 mln tn of edible oil annually to meet domestic consumption of around 25 mln tn. Currently, the country does not produce enough edible oil to meet even half the requirement.

Palm oil accounts for 60% of the total edible oils imported annually, most of it from Indonesia and Malaysia. Most of the crude degummed soyoil is imported from Argentina, the world's third largest soybean producer, crude canola oil is purchased from Canada and crude sunflower oil is bought from Ukraine.

"There are many ways to curb imports. It could be through levying cess on imports, increase base tariff, or increasing custom duties," he said.

If imports fall, India has to produce adequate cooking oils to meet the domestic demand, he said.

The government is also working on methods to increase oilseed production in the country to meet the deficit, the official said.

The farm ministry has launched National Mission for Vegetable Oils to promote output of domestically-grown oilseeds, including oil palm, the official said. The mission will initially focus on providing subsidies on farm inputs and higher minimum support price, he said.

Procurement by state-run agencies will also be pushed in order to encourage farmers. It may incentivise farmers to shift to oilseed crops, he said.

For the long term, the ministry is trying to add more area under oil palm plantation by announcing fair and remunerative price on fresh fruit bunches of oil palm at 8,000-8,500 rupees per tn, he said.

India has 325,000 ha under oil palm trees at present and it may grow to 350,000 ha in 2019-20 (Apr-Mar), he said.

However, of the total area under oil palm, fruit-bearing trees cover only 225,000 ha. The government aims to increase area under the plantation primarily in coastal areas and northeast, the official said.

Currently, India produces 200,000 tn oil palm annually, way lower than the domestic requirement, he said. With new plantation, production may increase in next four to five years, which is the gestation period of the oil palm tree, he said.

The government is also aiming to set up seed hubs in the country to provide good quality certified oilseed seeds to the farmers. These seed hubs are expected to be set up in Krishi Vigyan Kendras, and Indian Council of Agricultural Research centres, he said. End