Revitalizing the Oilseeds Sector

21 Feb 2023

Context: 

Burdened by massive import of vegetable oil amounting to 13-14 million tonnes and valued at over $14 billion to meet chronic domestic shortage, the government is keen to boost domestic production and reduce the dependence on imports.

Requirement to be self-sufficient:

  • The country’s domestic production of oilseeds has not kept pace with this demand, leading to a heavy dependence on imports. 
  • The present import policy, while advancing consumer interest, has failed to protect the interests of domestic oilseed growers.

Why is India not Self-Sufficient in Oilseed Production?

  • Land Fragmentation: Small landholdings make it difficult to adopt modern farming techniques, machinery and technology.
  • Low Productivity: Poor seed quality, lack of irrigation facilities, inadequate use of fertilizers and insufficient research and development efforts are reasons for low production.
  • Climate Variability: India has witnessed significant changes in rainfall patterns, which have adversely affected oilseed production.
  • Lack of Storage and Distribution Infrastructure: This discourages farmers from producing oilseeds.
  • Dependence on Imports: Low import tariffs and high domestic taxes have also made imported oil cheaper than domestically produced oil.
  • Lack of Government Support: It is in terms of research and development, extension services and financial support and also there is not so much private sector investment.

Related Initiatives of the Government to boost Oil Production:

  • National Mission on Edible Oil-Oil Palm (NMEO-OP)
  • Oil Palm Area Expansion under Rastriya Krishi Vikas Yojana
  • Pradhan Mantri Fasal Bima Yojana (PMFBY)
  • Technology Mission on Oilseeds
  • Paramparagat Krishi Vikas Yojana (PKVY)

How can India boost Domestic Production?

  • Enforce area expansion through incentivised crop rotation in high-input grain mono-cropping regions of Punjab, Haryana and western Uttar Pradesh; 
  • adopt multiple technologies including infotech, satellite tech, nuclear agri-tech and nanotechnology; 
  •  Work towards a breakthrough in seed technology
  •  Implement a robust nationwide procurement system
  • Tap the huge potential of non-conventional oil sources like cottonseed, rice-bran and tree-borne oilseeds; and
  • Invest in improving crushing/extraction efficiency.

Other important considerations:

  • Regulate & Monitor: A simple administrative system of ‘Import Contract Registration’ and monitoring is the need.
  • Cutting down Credit Period to 45 days: It will automatically slow the pace of import and make the importer more responsible and accountable.
  • Bring Cooking Oil under PDS: It will support vulnerable sections of consumers.
  • Co-existence: Public Distribution System and private trade supplies can co-exist and help advance consumer interest.
  • Creating Processing Industry Modernisation Fund: A modernized industry will capture greater value and create potential to attract foreign direct investment.

Way Forward:

  • Each one of these is doable and positive effects will be visible over time. But there is also a need for some ‘quick wins’ for which six policy actions are recommended.
  • Policymakers must demonstrate strong ‘political will’ to creatively disrupt the debilitating status quo. The country’s oilseeds sector deserves policy, investment and research support.

News Source: The Hindu Business 

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UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

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