Atmanirbhar Bharat series

Achieving Atmanirbhataya in oilseeds – 2

In the earlier part we saw how India went from being self-sufficient & over four decades to become the largest importer of edible oil in the world. In this part we explore various options available for the country to increase its production of oilseeds to reduce its imports of edible oil.

With a per capita consumption of 19 kg per annum, India is the fifth largest producer in the world. However, India also has the distinction of being the largest importer of edible oils in the world. India consumes 23 million tonnes of edible oils of which ~15 million tonnes is imported costing India an outgo of precious drain of ~Rs 80,000 crores per year. This is an indeed an opportune moment for the country to increase its oilseed production and achieve atmanirbharta in this sector by initiating balanced developmental and policy initiatives taking in to account both the farmer and the consumers. and policy initiatives taking in to account both the farmer and the consumers.

While there have been various policy initiatives from a trade perspective in terms of levying and increasing customs duty/tariffs to make the imports economically unviable. This has given a temporary reprieve and ensured that the farmers get a better price in the short term, however real atmanirbharta and true independence from costly unfettered imports of oilseeds will come from approaches which actually are aimed at increasing the production of oilseeds in the country.

Farmers in India cultivating oilseeds have many issues like difficulty in getting good seeds and other ingredients at reasonable costs, subdued and ambivalent prices, lack/inadequate to irrigation systems, access to proper marketing, storage and warehousing facilities and high freight. To make India self-sufficient in edible oils these issues need to be tackled on a war footing.

There are two obvious ways to increase the production of oilseeds in India, one is to dramatically increase the area under cultivation and the second is to increase the yield.

Whilst initial reports early this July 2020 suggest that due to the good monsoon situation this year, the Indian farmers have already completed sowing in 55% of the normal Kharif cropping area and covered area is 44% more than what it was in the same period last year. This increase is primarily led by pulses which was more than 160% and oilseeds more than 75% than the area same time last year. However, this could be a one-off phenomenon fuelled by ambient rainfall this year. Right now, majority of oilseed production is very much rain dependent. What will be a game changer is planning which will ensure that oilseed production in the country picks up irrespective of rains.

From increasing the yield perspective, the planners can look at the option to allow the import of high yield oilseeds for the farmer to plant. The policy planners can also explore the potential of GM seeds to increase the yield of oilseeds per hectare in the country. While the wariness of GM seeds is justified, currently there are no means to verify whether the edible oil imported is from GM seeds or not and in some countries from where our edible oil is imported from do allow cultivation of GM crops.

One of the key issues affecting the processors is direct import of edible oil, instead of oilseeds which has laid idle the processing capacity in the country.  The planners have the option to consider closely supervised import of oilseeds instead of edible oil till the domestic supply can meet the local demand. This will allow the better utilization of unproductive processing capacity in the country and also allow the oil cake to be sold as animal feed.

Building on the steps already initiated, the planners should explore the option of using the revenues generated by the incremental duties levied on the import of edible oils to educate the farmers about the viability of taking to oilseed production. This is especially needed in well-irrigated northern parts of the country where rice and wheat are favoured because of assured profitable MSP from the Government buying these food grains for the PDS through a well-established procurement mechanism. Motivating farmers in these region to plant oilseeds will also help in crop diversification by arresting the wheat-rice cycle and mainly conserve the water table as these are very water intensive crops.

What is notable here is that these are the same issues faced by the pulses sector which the Government successfully addressed and India today is in an enviable surplus position. This same policy support can help Government mirror the success for the oilseed production too.

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