The oilseeds sector has expressed disappointment with the Union Budget, which has not increased the Customs duty on the commodity. This, it claims, will discourage farmers from bringing more area under oilseeds.
The Solvent Extractors Association (SEA), a body of domestic edible oil industry, said the imposition of the duty would have generated additional revenue for the government without affecting consumers. At the same time, it said, the move would have boosted the confidence of the farmers in expanding the area under oilseeds. The revenue could have been utilised for oilseeds development programme, it said.
“The industry is greatly disappointed as no action/ measure has been suggested in the Budget to encourage oilseed production & productivity,” SEA said in a statement. “The international edible oil market is down and the futures trend looks bearish. Therefore, raising duty is not going to have any impact on domestic users,” said B V Mehta, executive director, SEA. According to SEA, domestic oilseeds production has remained stagnant at around 26-27 million tonnes. The country is heavily dependent on imports. Last oil year (November-October), vegetable oil imports were as high as 6.3 million tonnes worth Rs 20,000 crore.
“During the current oil year, the country will be forced to import about 8 million tonnes of vegetable oils to bridge the gap between the demand-supply. Our dependence on import of vegetable oils has increased to over 50 per cent. It is a matter of food security and the country cannot afford to depend so heavily on import of such food items,” the SEA said in a statement.
The situation under which the customs duty on vegetable oils was withdrawn last year, no longer exists. Last year inflation had peaked to 13 per cent and edible oil prices were ruling very high. Inflation has now turned to deflation and also edible oil price has reduced to nearly half of the last year peak price.
The government has laid emphasis on agriculture sector and hopes to achieve a 4 per cent growth in agriculture in the current year. However, these important issues relating to oilseed sector have not been addressed in the Budget.