India's edible oil problem: Oilseeds, instead of palm oil, key to decrease import dependency

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India’s edible oil problem: Oilseeds, instead of palm oil, key to decrease import dependency

At a time when the Situation Assessment Survey for agricultural households 2018-19 points to declining farm incomes from crop cultivation — with earnings from non-farm activities taking a major share of the income basket of an average agricultural household — re-launching of the forgotten “Yellow Revolution” offers a golden opportunity to meet the twin objectives of increasing domestic edible oil production as well as enhancing farm incomes.

It couldn’t have come at a better time considering that tens of thousands of farmers have been protesting at the borders of New Delhi against the three new farm laws, and are demanding Minimum Support Price (MSP) to be made a legal right. Recasting the Rs 11,040-crore National Mission on Edible Oil – Oil Palm (NMEO-OP) to promote oil palm plantations in the Northeast and in the Andaman Nicobar islands, instead, can be comprehensively redesigned to sow the seeds of a more sustainable and productive oilseeds revolution. Benefitting several million small farmers, the re-birth of a “Yellow Revolution” also has the potential to build confidence among the distraught farming community.

In the case of oil palm, the benefit will accrue mainly to a handful of companies. To illustrate, as many as 60 percent plantations in Malaysia and Indonesia are managed by large private and public companies. On the contrary, what India needs is a transition towards a farming system where the gains are distributed equally among a large farming population. Addressing the continuing agrarian distress has to be the top priority.

History of the “Yellow Revolution” and why it dried up

The “Yellow Revolution” that India launched in 1985-86, and which ran out of steam in the mid-1990s, was built on harnessing the inherent strengths. This includes the diverse agro-ecological conditions suitable for the nine oilseed crops, including two non-edible oilseeds — linseed and castor. The Oilseeds Technology Mission that the government had then launched helped expand the area and also increase crop production. Aided by suitable public policies, which gave a boost to the solvent extraction industry, the impressive turnaround in production made India ‘almost self-sufficient’ by the year 1993-94.

Let me reiterate, the remarkable transformation helped India produce almost 97 percent of its edible oil requirements domestically, with only 3 percent imports. And then the oilseeds revolution began to crumble.

International trade policies, along with a strong import lobby continuously building pressure to allow cheaper edible oil imports to soften consumer prices, forced the country to reduce tariffs. Over the years, tariffs were systematically lowered reaching to almost zero at one stage. When cheaper imports came in, it forced oilseeds growers to abandon its cultivation and move to other crops.

The gains of the “Yellow Revolution” were thus frittered away. The import dependence only continued to grow, and India has now emerged as the world’s second biggest importer of edible oils, with roughly 60 percent of its edible oil requirement being imported.

Benefits of oilseed cultivation over oil palm plantation

It isn’t too late to pick up the threads and start again. First, oilseeds offer tremendous potential for a dynamic turnaround. Unlike other countries in Latin America, Africa and Southeast Asia, where more area needs to be deforested if area under soybean cultivation for instance has to be expanded, India does not require any such land use changes. No forests have to be axed to make way for more area under oilseeds. Already 28.79 million hectares, which is 14 percent of the total cultivable land in India, is under oilseeds and given the crying need to encourage crop diversification, farmers would be too willing to shift and even double the area in a short span, provided they are assured of a higher guaranteed price and an assured marketing system.

Second, unlike oil palm plantations, which result in a huge loss of natural habitat, biodiversity and wildlife from cutting down of tropical forests, like what many environmentalists have already warned, oilseed cultivation is environmentally very sustainable. Studies have shown that in Malaysia, oil palm plantations have resulted in 47 percent deforestation (16 percent in Indonesia) over the past four decades. In addition, the loss of carbon pool, the carbon reservoir that can perform the dual role of absorbing and releasing carbon, gets severely diminished once the forests are cleared. Some studies estimate this loss to be around 160 tonnes per hectare. Even if the policy intention is to divert a part of the palm oil production towards bio-fuel, environmentalists warn that the net carbon dioxide emissions would increase for decades. It is primarily for this reason that the EU is planning to put a ban on biofuel production from palm oil. Oil palm plantations definitely leave behind a much bigger ecological footprint.

As if this is not enough, with an average requirement of 300 litres of water per tree per day, oil palm plantations are heavy water guzzlers. On a per hectare basis, it consumes 19.16 million litres of water, which means oil palm plantations literally lead to mining of precious water resources. At a time when intensive paddy-wheat cropping pattern is blamed for drying deep aquifers and leading to semi-arid conditions, policy makers should have been doubly careful in proposing an expansion in the area under oil palm plantations to 10-lakh hectares by 2025-26, and further expanding it to 16.7-lakh hectares by 2029-30. Suggesting a techno-fix in the form of drip irrigation for such massive plantations is not an easy escape. Instead, a viable and environmentally-safe alternative should have been first looked at before blindly accepting the industry prescription to meet the edible oil shortfall.

Compare this with oilseeds; nearly 70 percent of the nine oilseeds that India cultivates are grown in the rainfed areas. This is one reason why it’s per hectare productivity continues to be low. The need is to bring more oilseed area under irrigation, and this will happen once farmers realise the economic gains and are willing to make the switch from cereals and other cash crops. It requires a suitable policy mix with an appropriate package of practices depending on the location-specific needs to revitalise oilseeds farming. For which, oilseeds crops too need to be given the same kind of subsidy support and guaranteed prices that have been promised for the oil palm sector.

India’s stance

And finally, when Union Minister Nitin Gadkari suggested that edible oil packets should have a clear disclosure in ‘bold letters’ on the label mentioning how much palm oil it is blended with, he in reality pointed to the consumer penchant for healthy edible oils. This is exactly what India needs to build on, given that the country is bestowed with quite a wide diversity of edible oils, healthy and rich. It is therefore not too late to revamp the NMOEO-OP and bring back the focus on safe environment, healthy foods and wealthy farmers.

The writer is an expert on Indian agriculture. Views expressed are personal.

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