Strategy to reduce India’s Dependence on Import of Edible Oils

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With 21 % of the world’s area and 15% of the world’s production, India is the fourth largest oilseed producing country in the world, next to the USA, China, and Brazil. Oilseeds in India account for the second-largest agricultural commodities after cereals sharing 13% of the country’s gross cropped area, nearly 5% of gross national product, and 10% of the value of all agricultural products.

During the last few years, the domestic consumption of edible oils has increased substantially and has touched the level of 18.90 million tonnes in 2011-12 and is likely to increase further. With per capita consumption of vegetable oils at the rate of 16 kg/year/person for a projected population of 1276 million, the total vegetable oils demand is likely to touch 20.4 million tonnes by 2017.

Strategy to reduce India’s Dependence on Import of Edible Oils

One estimate indicates that India would need to raise 40.89 million tons of oilseeds production to meet the growing demand of edible oils in 2050 based on ICMR’s calorie requirements, changes in food consumption pattern in relation to population growth, per capita income and expenditure pattern and relative prices of food items. This necessitates formulating and implementing a strategic action plan incorporating the following actions.

  • India’s national/central research institutes and State Agricultural Universities have already evolved region and crop-specific high yielding varieties, profitable cropping systems, agronomic/cultural practices, nutrient management practices for maximizing productivity. The new technology tested at the farmers’ fields under the project Frontline Demonstrations in Oilseed Crops confirmed significant economic benefits of improved varieties and technologies as compared to farmers’ traditional practices. The incremental benefit: cost ratio established that the technologies are cost-effective. A nation-wide campaign should be launched right from this season to disseminate the use of these proven high-yielding varieties and scientific techniques.

The campaign should focus sharply on increasing:

1. Seed Replacement Ratio (SRR) with focus on Varietal Replacement

2. Irrigation coverage under oilseeds from 28% to 35%

3. Awareness and adoption of the techniques of integrated pests and nutrient management

4. Availability of adequate and timely supply of good quality seeds of high-yielding varieties and oil-palm planting material [iv] procurement of oilseeds and collection

5. Diversification of area from low yielding cereals  to oilseeds crops and inter-cropping of oilseeds with cereals/ pulses/sugarcane

6. Use of fallow land after paddy/potato cultivation

7. Expansion of cultivation of Oil Palm and tree bore oil seeds in watersheds and wastelands

8. Processing of tree-borne oilseeds

9. Inter-cropping during the gestation period of oil palm and tree-borne oilseeds to help growers obtain economic returns when there is no production.

  • Where necessary State Governments in order to make farmers’ see the benefits of improved production technologies must organize field demonstrations using seeds and Integrated Pest and nutrient management techniques.
  • The green revolution in the 1970s demonstrated that the newer genotypes can express their full genetic potential only under optimum agronomic/cultural practices and judicious use of inputs. The oilseeds production program should, therefore, strengthen the availability and augmenting the supply side in respect of critical production inputs viz. assistance for the purchase of breeder seed, production of foundation seed, production and distribution of certified seed, distribution of seed mini kits, distribution of plant protection chemicals, plant protection equipment, pesticides, the supply of rhizobium culture/phosphate solubilizing bacteria, the supply of improved farm implements, the supply of micro-nutrients, distribution of gypsum/pyrite/liming/dolomite, distribution of sprinkler sets and water-carrying pipes, among others.
  • Only around 28% area under oilseeds is irrigated specifically for rabi/summer groundnut, mustard and castor in Gujarat and Rajasthan. Almost the entire safflower and castor in Andhra Pradesh and Kharif sunflower in peninsular India are grown under rain-fed conditions. A time-bound program is necessary to bring at least 35% area under irrigated oilseeds and provision of protective irrigation during khaif season when necessary. The use of water-saving devices and water use efficiency technology must be popularized.
  • Since frequently visited droughts in one or the other parts of the country reduce yields and quality of crops significantly there is a need to invest more in research and development efforts in order to evolve drought-resistant varieties as also develop drought-proofing technology. Organic manure, which has a unique role in rain-fed conditions as it adds nutrients in the soil and helps maintain the fertility/productivity level, is fast disappearing leading to higher risks of drought. All-out efforts are required to ensure that most farmers are encouraged to produce organic manure [particularly through bio-gas technology & green-manuring techniques, among others] and invariably use it along with need-based chemical fertilizers. Often inadequate and imbalance in the use of major and micro-nutrients has directly affected the yield and cost of cultivation. This needs to be corrected through the use of organic manure and chemical fertilizers based on soil analysis.
  • The government in a PPP model can create an enabling environment that can facilitate the country’s research institutes and SAU to harness the power of science to increase productivity per unit of resources deployed, enhance input use efficiency, reduce the cost of cultivation and post-harvest losses to make it competitive, minimize risks and improve quality of oilseeds and their products.
  • Biotechnology is the most important tool to evolve varieties that possess one or more than one beneficial characteristic viz. short duration, high-yielding with a high percentage of oil content, drought-resistant/escape, insect-pests resistant that can be raised under different agro-ecological conditions. Some countries have developed genetically engineered oilseeds crops having one or more such characteristics.
  • It is time now to intensify R&D efforts to design farm equipment that suit to small farmers and help mechanize and commercialize the oil-seeds production sector by encouraging small farmers to avail contractual services of agro-service centers, agri-clinics, contract farming and value-chain system.
  • In the context of significant awareness of most people preferring organic farm products, more research is required in organic farming of oilseeds.
  • The profitability of oil seeds can be enhanced by exploring and exploiting their potential for diversified uses with high-value specialty products and derivatives including plant bio-mass.
  • Union and State Governments and the corporate sector need to commit to making available need-based resources including human capital such that central research institutes and SAUs are enabled to organize basic and strategic research to increase productivity, improve quality and value addition; establish a repository of information and genetic/genomic resources and strengthen linkages and partnerships with different stakeholders.
  • As the unbranded segment accounts for 80%to 90%.of total consumption in the country, it is necessary to formulate policies and strategic action plans such that the corporate sector can make available within five years branded products that can have better value addition and minimize health hazards by preventing adulteration.
  • Over the past decade, world-class edible oil refineries have been set up in India where superior quality refined oil is produced at a competitive processing cost. However, the capacity utilization of Indian refineries is still as low as 35% of installed capacity which if improved over a period of five years to 80% can yield rich dividends to the farmers and industry.
  • The share of raw oil, refined and vanaspati in the total oil market is 35%, 55% and 10% respectively. Thus, oil seeds offer substantial scope for the growth and development of the country’s agri-business in terms of production, processing, storage, pricing and marketing in and outside India which India can prioritize.
  • With a fragmented supply chain, farmers realize as low as 30% to 35% of the final price paid by the consumers as against 60-65% realized by farmers in other countries. This factor along with asymmetry in information, poor bargaining power, and forced sales act as a substantial deterrent for farmers to invest in oilseeds-farming. This calls for revisiting the agricultural marketing system and introducing necessary reforms that can help farmers market and export their produce and products profitably.
  • The credit and insurance infrastructure for agriculture needs to be expanded and lending and insurance policies must be farmer-friendly.

Sushma Singh

Sushma is a financial expert and online entrepreneur. With years of experience in personal finance and business management, she is dedicated to empowering individuals to take control of their finances and make smart investment decisions. Through Moneymint's website, she provides insightful tips, strategies and resources to help individuals grow their wealth and achieve financial stability. Join Sushma on the journey to financial freedom today!

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