Centre to also give 50% subsidy for new mills, technical help to cultivators.
The Union agriculture ministry has identified eight states where the Budget annoucement on expanding the area under oil palm cultivation can be implemented. It has decided to provide 50 per cent subsidy for setting up palm oil extraction units.
India imports about 8.2 million tonnes of edible oil in a year and 80 per cent of this is palm oil. Edible oil imports rose by 57.5 per cent between 2007-08 and 2009-10 (November-October) because of stagnant domestic oilseed production and rising consumption.
The domestic annual production of palm oil is no more than 70,000 tonnes. The Budget had said palm cultivation in the country would be expanded by 60,000 hectares in 2011-12. Of the eight states, it has been subsequently decided, around 40,000 ha would be brought under palm plantation in Andhra Pradesh this year, followed by 7,000 ha each in Karnataka and Tamil Nadu. In Orissa, it would be around 3,700 ha and in Gujarat and Mizoram, about 1,000 hectares each. Chhattisgarh and Maharashtra are the other two states where new areas will be brought under cultivation in this financial year to a small extent, of a few hundred ha.
The 50 per cent subsidy for setting up oil palm mills “is meant to sustain the confidence of oil palm cultivators",agriculture ministry officials said.
The programme to expand area will be under the existing Rashtriya Krishi Vikas Yojana, which aims to augment domestic palm oil production by 2.5-3 million tonnes in the next five years. To be termed the Special Programme on Oil Palm Area Expansion, officials said priority will be given to expand the area under the purview of existing mills, so as to increase their technical and economic viability.
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The government will incentivise growers for identified interventions such as planting material, compensation for loss of income to farmers during the gestation period (usually four years), drip irrigation, pump sets and support for intercropping during the gestation period.
“States will have the option to club these components with other interventions under existing schemes to expand the area under palm plantation in the country and wasteland development,” officials added.
The government will also undertake a publicity drive on the nutritional values of palm oil. The Andhra Pradesh-based Directorate of Oil Palm Research will appoint 11 technical personnel to monitor the palm plantations in Andhra Pradesh and one person each in other states.
“It is estimated that India has potential to cultivate oil palm in 1.03 million hectares of land, which could produce 4-5 mt of oil annually. This would cater to the consumption requirement of 330 million people and considerably reduce the country’s rising edible oil import,” they said.