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National Mission on Edible Oil-Oil Palm

  • 31 Aug 2021
  • 7 min read

Why in News

Recently, the Prime Minister announced a National Mission on Edible Oil-Oil Palm (NMEO-OP), with an investment of over Rs 11,000 crore over a five-year period.

  • However, some environmentalists have raised concerns over the disastrous impact of palm oil plantations.

Key Points

  • About:
    • NMEO-OP is a new Centrally Sponsored Scheme. It is proposed to have an additional 6.5 lakh hectares for palm oil by 2025-26.
    • It will involve raising the area under oil palm cultivation to 10 lakh hectares by 2025-26 and 16.7 lakh hectares by 2029-30.
    • Oil palm farmers will be provided financial assistance and will get remuneration under a price and viability formula.
    • The Viability Formula is a Minimum Support Price-type mechanism and the government will fix this at 14.3% of Crude Palm Oil (CPO) price.
      • It will eventually go up to 15.3%.
    • Another focus area of the scheme is to substantially increase the support of inputs/interventions.
    • Special assistance will be given to replant old gardens for their rejuvenation.
  • Special Focus:
    • The special emphasis of the scheme will be in India’s North-Eastern (NE) states and the Andaman and Nicobar Islands due to the conducive weather conditions in the regions.
    • To attract industry to the NE and Andaman regions, a provision of Rs 5 crore of 5 mt/hr (million tonne per hectare) with pro-rata increase for higher capacity will be given.
  • Objective:
    • To harness domestic edible oil prices that are dictated by expensive palm oil imports and become self-reliant in edible oil.
    • To raise the domestic production of palm oil by three times to 11 lakh MT by 2025-26.
  • Significance of the Scheme:
    • Raise Farmers Income:
      • It is expected to incentivise production of palm oil to reduce dependence on imports and help farmers cash in on the huge market.
    • Rise in Yields & Reduction in Imports:
      • India is the largest consumer of vegetable oil in the world. Of this, palm oil imports are almost 55% of its total vegetable oil imports.
        • It imports the rest, buying palm oil from Indonesia and Malaysia, soyoil from Brazil and Argentina, and sunflower oil, mainly from Russia and Ukraine.
      • In India, 94.1% of its palm oil is used in food products, especially for cooking purposes. This makes palm oil extremely critical to India’s edible oils economy.
  • Concerns:
    • Impact on Tribal Lands:
      • The oil palm is a water-guzzling, monoculture crop with a long gestation period unsuitable for small farmers and the land productivity for palm oil is higher than for oilseeds, which create apprehension for more land to be given for oil palm cultivation.
        • In southeast Asia, the plantation of palm oil trees has replaced massive tracts of rainforests.
      • It could also detach tribespeople from their identity linked with the community ownership of land and “wreak havoc on the social fabric”.
    • Threat to Wildlife:
      • Focus areas are “biodiversity hotspots and ecologically fragile” and oil palm plantations would denude forest cover and destroy the habitat of endangered wildlife.
    • Palm is Invasive:
      • The palm is an invasive species that is not a natural forest product of northeastern India and its impact on the biodiversity as well as on soil conditions has to be analysed even if it is grown in non-forest areas.
        • Invasive species are non-native species that spread and interfere in a new ecosystem by posing a serious threat to the native biodiversity. They don't allow local species to grow and wildlife to move through.
    • Health Concern:
      • Oil palm requires 300 litres of water per tree per day, as well as high Pesticide use in areas where it is not a native crop, leading to consumer health concerns as well.
    • Farmers not Getting Fair Price:
      • The most critical issue in the cultivation of oil palm has been the inability of farmers to realise a remunerative price of fresh fruit bunches (FFBs).
      • FFBs (Fresh Fruit Bunches) of oil palm are highly perishable and need to be processed within twenty-four hours of harvest.

Way Forward

  • If similar subsidies and support are extended to oilseeds which are indigenous to India and suited for dryland agriculture, they can help achieve self-reliance without dependence on oil palm.
  • A solution would be to grow oil palm on agricultural land if farmers are willing to do it and the government incentivises it.
  • Lastly, the success of mission oil palm will also depend on import duty on crude palm oil.
    • In 2012, It was recommended that whenever the import price of crude palm oil falls below USD 800 per tonne, the import duty needs to be raised.
  • The transformation this crop has brought about in the lives of farmer communities in Andhra Pradesh can help emulate the same in the other potential states as well. A strong and robust, long-term policy mechanism will give this crop required push across India.

Source: TH

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