Surinder Sud: Edible oil crisis

FARM VIEW

At 23.3 million tonnes, this year's production of edible oils is below the 24.4 million tonnes harvested even a decade ago.

An edible oil crisis is around the corner though policy planners do not seem to realise this. The oilseed production has dropped this year by a whopping 17 per cent to 23.26 million tonnes, falling below 24.38 million tonne harvested a decade ago in 1996-97. The dependence on imports for meeting the needs, which was a mere 3 per cent in the early 1990s, has shot up to over 40 per cent. What adds to the worry is that the edible oil availability in the international market is likely to dwindle due to the large scale diversion of these oils to bio-fuel production. This may make it difficult even to import enough edible oils.

Some recent policy moves bear out the government's lack of appreciation of the gravity of the situation. For one, while the minimum support price (MSP) of wheat was hiked effectively by a whopping Rs 200 a quintal, including bonus, that of edible oilseeds was kept unchanged at last year's level. This was a clear signal to the farmers to divert area from oilseeds to wheat, which they actually did. Consequently, the output of the rabi oilseeds, notably rapeseed-mustard, declined sharply by 16.3 per cent to 9.38 million tonnes, against 11.21 million tonnes in the last season. Besides, the slashing of import duties on edible oils, even if in phases, is another move that can be interpreted as a preference for imports over domestic production.

The Solvent Extractors' Association of India, an apex body of the vegetable oil trade, has brought out a 'white paper' on the status of the oilseed sector, cautioning the government over the impending crisis. It has pointed out that the biofuel manufacturing capacities have expanded substantially the world over. While soyabean oil is being used for producing biofuel in the US, rapeseed oil is used for that purpose in the European Union as is palm oil in Malaysia and Indonesia. "We fear that we may not be able to control the landed cost of imported oils even by bringing the duties to zero level in the coming years," the white paper has stated.

The national average productivity of most oilseeds in India is just about half of that in developed countries. It is far lower than even the levels achieved at the frontline crop cultivation demonstrations carried out under the aegis of the Indian Council of Agricultural Research (ICAR). If the yields on the farmers' fields rise to the same level as at these demonstration plots, the production of rapeseed-mustard can spurt by some 30 per cent and that of soybean by 33 per cent from the present area and with the already available varieties and cultivation technology.

The question is why is it not happening? There are several reasons for that. For one, since these these crops are not as remunerative as their alternatives, they are being pushed towards the marginal lands. As a result, not even 25 per cent of the oilseeds area has irrigation facilities. Besides, most improved varieties of oilseed crops are inherently not widely adaptable. They are also susceptible to stress factors, such as drought, excess moisture, salinity, disease and pest attack. Furthermore, the high risk factor dissuades farmers from using fertilisers and plant protection chemicals. Nor do farmers invest on purchasing fresh seeds as often as they should.

The cure for the ills of this sector lies as much in technology upgradation as in policy environment. The ICAR is seeking to address the productivity issues by developing varieties and hybrids that can withstand the stresses without the use of costly inputs. Its scientists are looking for suitable genes in the wild relatives of the oilseed species. Some success is reported to have already been achieved in the search for the desirable genes for soyabean and mustard crops. Biotechnological tools would be used to transfer these genes to the crop varieties and hybrids.

On the policy front, the current practice of the least hikes in the MSPs of oilseeds to protect consumer interests "" which has proved counter-productive "" needs to give way to remunerative pricing. The impression that edible oils are contributing to inflation stems from the flaws in compilation of the consumer price index. It gives unduly high weightage to groundnut oil, while the largest consumption is of palm and soyabean oils.

Besides, there is also the need to tap other sources of vegetable oils like the tree-borne oilseeds and rice-bran oil, to augment total edible oil availability.