Crisis of expensive edible oil

Jayantilal Bhandari

Unless the production of oilseeds in the country is increased as per the target and remunerative price of oilseeds is not available, neither will there will be a smile on the face of oilseed producing farmers nor will the edible oil consumers get relief. These days expensive edible oils have spoiled the kitchen budget of not only the poor section but also the middle class families. Palm, mustard and groundnut oil are mainly used for edible oils in the country. If we look at the retail prices of edible oils in the last one year, we find that in the last one year, on an average, the prices of all oils have increased by more than 60 per cent. The government has given concessions in all other taxes including reduction in import duty on imported edible oils as part of immediate measures to bring down the price of edible oils. This is the reason that compared to the steep increase in the prices of Palmolein and Soyabean in the global market, their prices in India have registered a small increase. Rising edible oil prices and inadequate oilseeds production have emerged as a painful economic challenge for the country.

However, grain stocks in India are full at this time. The country is self-sufficient in wheat, rice and sugar production and their exports are also increasing. But in the case of oilseeds, we are not even able to produce enough to meet our needs. There is a shortage of edible oils in the country for the last three decades. To overcome this, several attempts were made to increase domestic oilseed yields. Although the Yellow Revolution played an important role in increasing the production of oilseeds, but no significant success could be achieved. Under the Green Revolution, the way work was done on the seeds of paddy-wheat, the work was reduced in the field of oilseeds. As a result, the country fell behind in the production of oilseeds. As a result, the production of edible oils was affected due to the non-increasing production of oilseeds as per the requirement in the country.

India’s dependence on the import of edible oils continued to grow as the production was low as compared to the consumption of oilseeds. By the year 1990, the country was almost self-sufficient in edible oils. Then the country’s dependence on the import of edible oils gradually increased and at present it is at a worrying level. At present, India imports about 60 per cent of its requirement of edible oils. Since the domestic production of edible oils is about forty per cent to meet the requirement, this inadequate oilseeds production does not control the price of edible oil in the market. As a result, the international market for edible oil affects the price of edible oil in the country.

It is also important to note that the biofuel policies of many countries have also become the cause of inflation of edible oils. For example, in Malaysia and Indonesia, which export palm oil to India, biofuel is being produced from palm oil and in the US, fuel is being produced from soybean oil. Large Chinese companies are also buying edible oil on a large scale in the world market. In India, where the share of palm oil is more than thirty percent, the share of soybean oil is about twenty-two percent. In such a situation, the effect of change in the prices of edible oil in the international market falls sharply on the domestic price of edible oil. In the last one year, the prices of edible oils in India have increased rapidly. The situation is that despite being an agricultural country, India has to import edible oil worth about sixty five to seventy thousand crore rupees annually. Every year such a huge foreign exchange goes into the hands of countries like Indonesia, Malaysia, Brazil and America. India is the largest importer of edible oils in the world.

In the last few years, several steps have been taken to encourage the production of oilseeds in the country. But there is a long way to go to make the country self-reliant in oilseeds production. Last month, the central government approved the National Edible Oil Mission (NMEO-OP) for palm oil with a financial outlay of Rs 11,040 crore. Its objective is to accelerate the production of edible oils in the country itself. For this, targets have been set to increase the area and yield of palm oil. There has been a huge increase in aid for palm cultivation. Earlier, twelve thousand rupees were given per hectare, which has been increased to twenty nine thousand rupees per hectare. Under this scheme, a target has been set to increase the area under palm oil to six and a half lakh hectares by the year 2025-26. Along with this, a target has been set to reach 11.20 lakh tonnes of crude palm oil by 2025-26 and to twenty eight lakh tonnes by 2029-30.

It is also important that now the necessary raw material, technology and information will be made easily available to the producers to increase the production of oilseeds under the Edible Oil Mission. In this kharif season, farmers will be provided seed kits of various oilseed crops including groundnut and soybean with high yielding and disease and germ protection ability. There is a need to increase public research expenditure in oilseed crops for the development of organic and inorganic varieties of oilseed crops and increase in yield. Availability of fertilisers, pesticides, credit facilities, crop insurance and extension services will have to be ensured in the ecological areas important for oilseed crops. Adequate protective measures have to be adopted to avoid unfair competition in the international market.

To overcome the crisis of edible oils, work has to be done to extract good quality edible oil from non-conventional sources also. India is the second largest producer of rice in the world but very little of the rice is used to extract the oil (rice bran oil). Similarly cottonseed is used in large quantities as animal feed without extracting the oil. In such a situation, it would be appropriate to focus on the aspects related to increasing rice bran oil and cottonseed oil under the new National Oilseeds Mission.

It is a question to be asked that when the contribution of the country’s agriculture sector to the Gross Domestic Product (GDP) is increasing continuously and agricultural exports are increasing continuously, then the conditions remain in dismal conditions in oilseeds production. It is known that agriculture has been the only sector in which the growth rate has increased continuously in the first quarter of three years. If there is a good growth in oilseeds production, then there will be further growth in agricultural GDP. It has to be kept in mind that unless the production of oilseeds in the country is increased as per the target and remunerative price of oilseeds is not obtained, neither the farmers producing oilseeds will have a smile nor will the edible oil consumers. will get relief. It should be expected that the prices of edible oil in the domestic market will start reducing gradually from December this year after the fresh trend in the global edible oil market and the arrival of new oilseeds crop.