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Notice (8): Undefined variable: urlPrefix [APP/Template/Layout/printlayout.ctp, line 8]latest-news-updates/the-other-oil-problem-8990.html"/> LATEST NEWS UPDATES | The other oil problem | Im4change.org
Resource centre on India's rural distress
 
 

The other oil problem

-The Business Standard

 

For a country whose cuisine uses so much edible oil, India’s dependence on imported cooking oil is as economically debilitating as its dependence on imported energy. Barring a short spell in the late eighties, when the country was nearly self-sufficient in edible oil production, the bulk of the cooking oil needs have been met through imports for decades. Even today, domestic oilseed production does not meet even half of the Indian consumers’ requirement. Since palm oil constitutes 80 per cent of all vegetable oil imports, India has come to become dependent on the handful of countries that have exportable surplus of edible oil. Any disruption in supplies from these limited sources can cause mayhem in the domestic edible oil sector. This problem gains greater importance against the backdrop of a deceleration in domestic oilseed production. Stimulating domestic production depends critically on improving productivity of land and crop varieties, and oilseed cultivation is able to stand up economically to competition for land from alternative crops. Outsourcing oilseed production by acquiring land in other countries can be one way to handle this problem. Some companies engaged in the vegetable oil business are already trying to do that. But this alone may not suffice. The easier option is to promote domestic cultivation of oil palm, the highest oil-yielding perennial crop.

Unlike other oilseed crops, which yield less than one tonne of oil per hectare, oil palm can deliver four to six tonnes of crude edible oil, besides four to six quintals of palm kernel oil, which has industrial applications. Many farmers who have switched to oil palm from traditional crops with encouragement from edible oil companies in states like Tamil Nadu, Andhra Pradesh, Karnataka, Goa, Gujarat, Orissa and Mizoram are earning good profits. While the Union government seems to have bought into this idea and plans to bring 60,000 hectares under oil palm this year, the funds made available in this year’s Budget – Rs 300 crore – will be inadequate. High initial investment and long gestation period (plants begin yielding oil only from fourth year of plantation) necessitate long-term financial support for farmers, which may subsequently be recovered in installments.

The biggest challenge in oil palm production is the post-harvest management of fresh fruit bunches or FFBs that contain palm oil. Being highly perishable, they need to be crushed within 24 hours of harvesting. The development of FFBs processing facilities, therefore, needs to go hand in hand with expansion of oil palm plantations. Strengthening sustainable links between growers and oil mills, much like what sugar and sugarcane cooperatives have sought to do, can provide one route to sustained growth of domestic output. An experts committee on oil palm has estimated that over a million hectares of irrigated land can be brought under oil palm plantations in several southern and eastern states. If this domestic potential is fully exploited, it will augment edible oil availability and help limit dependence on imports. More importantly, it will stabilise the country’s overall oilseed production and cooking oil availability in the long term, because once they are seeded, oil palm plantations remain productive for nearly a quarter century.