Edible Oil Economy in India – UPSC GS3

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Why is India not Self Sufficient in Edible Oils Production?
  • Four main concerns for oil seed and oil producers in India are:
    • Lack of Micro-irrigation Infrastructure
    • Non availability of quality seeds
    • Lack of marketing infrastructure and
    • Government policies
  • According to the Ministry of Consumer Affairs, Food, and Public Distribution the total domestic demand of edible oils in the country is approximately 250 lakh metric tonnes per year.
  • 60% of the edible oils consumed in the country is met through imports. 
  • Palm oils (crude + refined) import constitutes around 60% of the total edible oil imported, out of which 54% is imported from Indonesia and Malaysia.
Steps to increase Edible Oil Production in India:
  • Technology Mission on Oilseeds was setup in 1986 which was converted into a National Mission on Oilseeds and Oil Palm (NMOOP) in 2014.
  • Further it was merged with NFSM (National Food Security Mission).
  • This gave a thrust to Government’s efforts for augmenting the production of oilseeds.
  • The Yellow Revolution is one of the colour revolutions that was launched to increase the production of Edible oilseeds in the country to meet domestic demand.
  • The government has also launched the Kharif Strategy 2021 for oilseeds.
  • It will bring an additional 6.37 lakh hectare area under oilseeds and is likely to produce 120.26 lakh quintals of oilseeds and edible oil amounting to 24.36 lakh quintals.
  • National Edible Oil Mission-Oil Palm (NMEO-OP):
    • Government has announced the National Edible Oil Mission-Oil Palm (NMEO-OP) scheme for self-reliance in edible oil and involves investment of over Rs. 11,000 crore (over a five year period).
Steps are taken to check the Prices of Edible Oils:
  • Extended the Current Basic Rate:
    • The government has extended the current basic rate of import duty of zero percent on Crude Palm Oil, Crude Soyabean oil and Crude Sunflower Oil upto 30th September, 2022.
    • The rate of import duty on Refined Palm Oils at 12.5%, Refined Soyabean oil and Refined Sunflower Oil at 17.5% will remain in force up to 30th September, 2022.
    • This measure will help in cooling down the prices of edible oils which are witnessing an upward trend in the international market due to lower availability and other international factors.
  • Imposed Stock Limit Quantities:
    • The government had earlier imposed stock limit quantities on edible oils and oilseeds for a period upto 30th June, 2022 under the Essential Commodities Act, 1955 to check hoarding.
    • This measure is expected to curtail any unfair practices like hoarding, black marketing etc. of edible oils and oilseeds in the market which may lead to any increase in the prices of edible oils.
  • Government has reduced Agricultural Infrastructure Development Cess (AIDC) for Crude Palm Oil (CPO) from 7.5% to 5% with effect from 12th February, 2022. It will benefit the domestic refining industry to import Crude Oil for refining.
Way Forward:
  • The government should approve Genetically Modified cultivation for oil seeds to increase production.
  • Policy is the major problem when it comes to increasing seed oil production. For years, farmers produced groundnuts and sunflowers but with unseasonal rains and pests, they have turned to soya.
  • Thus, there must be a micro-level plan with technological support. The world has accepted GM oilseed cultivation and now its high time India takes a call on this matter.
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