In his Independence Day speech this year, the Prime Minister announced a scheme to boost palm oil production in regions with high rainfall, since these crops require rainfall throughout the year for successful growth. Three days later, on August 18, the Cabinet approved a ₹11,040 crore outlay over five years for the National Mission on Edible Oils – Oil Palm (NMEO-OP), emphasising on the argument of reducing India’s dependence on importing edible oils.
The government has also announced that ecologically sensitive northeastern states and eastern archipelago of the Andaman and Nicobar islands will be used for cultivation of the oil.
India currently produces palm oil on more than 3,00,000 hectares of land and plans to cover an additional area of 6,50,000 hectares by 2025-26.
But, the palm oil mission proposes to cover an additional area of 6.5 lakh hectares by 2025-26 to increase crude palm oil (CPO) production to 11.2 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.
Why Palm Oil
The very versatility of the oil has made it an effective substitute for other kinds of oil. The government also includes palm oil in food rations for the poor. With 1.3 billion people, Indian consumption of this oil has exponentially increased in the last two decades simply because it comes cheap.
Why India has launch the Palm oil scheme?
Malaysia and Indonesia supply more than 80 percent of the world’s palm oil. On the other hand, India is the world’s largest palm oil importer heavily dependent on these two countries to meet about 60 percent of its annual needs.
To achieve its production targets, the NMEO-OP scheme increases input cost assistance to farmers for oil palm cultivation, from Rs 12,000 per hectare to Rs 29,000 per hectare.
It will also offer cultivators a fixed price for their output, along the lines of a minimum support price. In case of market volatility, farmers will be paid the price difference on their produce via direct benefit transfers.
The government has also promised to provide seed gardens with financial assistance of up to Rs 1 crore per 15 hectares in northeastern states and in the Andaman and Nicobar Islands, and Rs 80 lakh per 15 hectares in the rest of India. Currently, Andhra Pradesh and Telangana account for over 90 per cent of India’s crude palm oil production.
Concerns
palm oil is a fast growing and large plant and requires a lot of water, which is the major problem in India unlike Indonesia and Malaysia, since India’s average annual precipitation comes to a little over 1,000 mm.
The demand for water cannot be met by rain alone, and needs irrigation systems.
This, in turn, means greater strain on water sources, especially groundwater, which leads to a falling water table. The water problem has also witnessed a switch to coconut oil cultivation in Andhra Pradesh which is one of India’s largest palm oil producers.
- Agencies