To reduce the country's edible oil import bill, the Union cabinet approved a new centrally sponsored scheme, National Mission on Edible Oils – Oil Palm (NMEO-OP), to boost the production of palm oil in the country, especially in the northeast region and the Andaman and Nicobar Islands.
“Due to the heavy dependence on imports for edible oils, it is important to make efforts for increasing the domestic production of edible oils in which increasing area and productivity of oil palm plays an important part. This scheme will immensely benefit the oil palm farmers, increase capital investment, create employment generation, shall reduce the import dependence and also increase the income of the farmers,” the cabinet statement said.
India is currently the largest importer of edible oil. This is done mainly from Malaysia and Indonesia. India currently produces one per cent of its requirement.
The scheme will have a financial outlay of Rs 11,040 crore of which Rs 8,844 crore is Centre's share and Rs 2,196 crore is state share. Under this scheme, it is proposed to cover an additional area of 6.5 lakh hectare (ha.) for oil palm till 2025-26 and thereby reaching the target of 10 lakh hectares ultimately. The production of Crude Palm Oil (CPO) is expected to go upto 11.2 lakh tonnes by 2025-26 and upto 28 lakh tonnes by 2029-30.
The government said efforts to increase the production of oilseeds and oil palm have been made since early 90s. The oilseeds production has increased from 275 lakh tonnes in 2014-15 to 365.65 lakh tonnes in 2020-21.
For harnessing the potential of palm oil production, in 2020, an assessment was made by the Indian institute of Oil Palm Research for cultivation of oil palm. It said it increased to 28 lakh ha. Thus, there is huge potential in oil palm plantation and subsequently production of Crude Palm Oil (CPO). At present, only 3.7 lakh hectares is under oil palm cultivation. Oil palm produces 10 to 46 times more oil per hectare compared to other oilseed crops and has yield of around 4 tonnes oil per ha. As around 98 per cent of CPO is being imported, the government proposed to launch this scheme.
The proposed scheme will subsume the current National Food Security Mission-Oil Palm programme. The scheme has two major focus areas. The oil palm farmers produce fresh fruit bunches (FFBs) from which oil is extracted by the industry. Presently, the prices of these FFBs are linked to the international CPO prices fluctuations.
“For the first time, the government will give a price assurance to the oil palm farmers for the FFBs. This will be known as the Viability Price (VP). This will protect the farmers from the fluctuations of the international CPO prices and protect him from the volatility,” an official said.
The second major focus of the scheme is to substantially increase the assistance of inputs/interventions. A substantial increase has been made for planting material for oil palm and this has increased from Rs 12,000 per ha to Rs 29,000 per ha. Further, substantial increase has been made for maintenance and inter-cropping interventions. A special assistance at rate of Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.