The recent announcement by the Indian Prime Minister regarding a new initiative on palm oil production has attracted attention. The national scheme, designated as the National Edible Oil Mission-Oil Palm (NMEO-OP), aims to bolster farm incomes and ensure self-reliance in edible oil production. This investment of over Rs. 11,000 crore is to be deployed over the five years.
The Objectives of NMEO-OP
One key aim of the NMEO-OP is to regulate domestic edible oil prices which are currently influenced by costly palm oil imports. Another important goal is to triple the domestic production of palm oil from the current yield to ensure an output of 11 lakh MT by 2025-26. Achieving this target would require an increase in oil palm cultivation to 10 lakh hectares by 2025-26, and then further to 16.7 lakh hectares by 2029-30.
Features of the Scheme
Within this scheme, the Indian north-eastern states and the Andaman and Nicobar Islands have been singled out for special emphasis due to their favorable weather conditions suited for palm oil cultivation. In terms of financial support, the program ensures assistance to oil palm farmers in addition to remuneration under a price and viability formula.
Significance and Expected Outcomes
The scheme is expected to stimulate palm oil production, reducing dependence on imports and granting farmers access to a large market. Currently, India stands as the world’s largest consumer of vegetable oil, with palm oil making up around 55% of its total vegetable oil imports. Furthermore, under this scheme, palm oil production is expected to significantly increase. At present, India produces less than half of the roughly 2.4 crore tonnes of edible oil that it consumes annually. The other half comes from imports. As a primary ingredient in cooking, the staple constitutes 94.1% of India’s palm oil use, underlining its importance to India’s edible oils economy.
About Palm Oil
Palm oil is the most widely consumed vegetable oil worldwide with widespread use in producing detergents, plastics, cosmetics, and biofuels. The top consumers of palm oil are India, China, and the European Union (EU).
The Edible Oil Economy: Past Interventions
There have been two significant initiatives which have contributed to the development of this sector in India. The first was the inception of the Technology Mission on Oilseeds in 1986, restructured into the National Mission on Oilseeds and Oil Palm (NMOOP) in 2014 and subsequently merged with the National Food Security Mission. This intervention successfully increased the production of oilseeds from about 11.3 million tons in 1986-87 to 33.22 million tons in 2019-20. The second major initiative has been the liberalization program which promotes open market practice, fostering healthy competition and self-regulation within the industry.
The Yellow Revolution and Kharif Strategy 2021
The Yellow Revolution was launched to enhance the production of edible oilseeds in the country, serving domestic demand. In line with this, the government also initiated the Kharif Strategy 2021 aimed at oilseeds. This strategy, which plans to bring an additional 6.37 lakh hectare area under oilseeds cultivation, is predicted to yield 120.26 lakh quintals of oilseeds and edible oil amounting to 24.36 lakh quintals.
Commonly Used Oils in India
Several oils are traditionally used in India, including groundnut, mustard, rapeseed, sesame, safflower, linseed, niger seed, and castor. In recent years, soybean and sunflower oils have gained prominence. Amongst the plantation crops, coconut is of prime importance.