India's edible oil mission: long awaited and with good Intent but direction is flawed

In the beginning of this week, we saw two big news dominating the headlines: Lets discuss first news item and try to interweave the second:

Self-reliance: India to launch Rs 11,000-cr edible oil mission: PM

India will launch an oil seeds mission soon, entailing investments of Rs. 11,000 crore in the cooking oil eco-system, Prime Minister said on Monday. The government will ensure that farmers get all the facilities, from quality seeds to technology, adding that along with oil palm cultivation, growing of other traditional oilseed crops also be given a boost under the proposed mission.

The PM further stated that, thousands of crores that we pay abroad to buy edible oils should be given to the farmers of the country. There is every possibility for increasing cultivation of oil palm in India, particularly in the northeast and Andaman-Nicobar Islands. 

The move comes amid surging edible oil prices stoking food inflation and high imports of these items straining the country’s current account. Import dependence on edible oils is as high as 60%, with the import bill hovering around Rs 75,000 crore per year. After crude petroleum and coal, edible oils are threatening to strain India’s current account, with imports of these items seen surging 65% on year to $17 billion in the 2020-21 oil year (November-October) due to a spike in global prices. The government appropriates more than a third of the import value through high import taxes on edible oils, which range from 30% to 49.5% at present. A big rise in global prices would likely push the import bill to Rs 1.26 lakh crore in the current oil year (November-October), against Rs. 75,000 crore last year.

Though production of oilseeds has increased a bit in the last few years, it is highly inadequate to make any significant impact on India’s annual edible oil import bill. Oil seeds output has increased to 37.31 million tonne (MT) in 2020-21 from 27.51 MT in 2014-15, while the area has gone up to 28.82 million hectares from 25.99 million hectares during this period. The overall yield has increased to 1,295 kg/ hectare from 1,075 kg/ hectare. The availability of edible oils from domestic production is around 8 MT against annual consumption of over 24 MT, industry data show.

In this context, the intent of the Central Government to create an edible oil mission and have enough edible oil produced locally is a welcome move. In fact, India had Technology Mission on Oilseeds and Pulses in established 1986, which acted on mission mode to coordinate activities of different Ministries. This was followed up by Operation Golden Flow, a programme devised in 1988 which sought to make India self-reliant in edible oils.

Through the launch of Dhara edible oil brand, Operation Golden Flow brought together small-scale oilseed farmers affiliated to local Oilseed Growers' Unions and the National Dairy Development Board (NDDB) to produce, collect, process and package homegrown edible oils. Operation Golden Flow sought to replicate for oil seeds what Operation Flood had managed to achieve for milk production in the 1970s highlighted by the emergence of Amul.

This push towards self-reliance in edible oils, a vital element of any Indian household consumption basket, went exceedingly well for a decade and by 1998-99, India was almost self-reliant in edible oil with hardly any edible oil imported in the country. However cases of toxic adulteration, which industry insiders describe as a deliberate sabotage, and liberalisation of imports brought this process to an end with reversal in trend as described below:

 

Thereafter, National Mission on Oilseeds and Oil Palm was created and later merged into National Food Safety Mission (NFSM). However, not much has changed during the period since collapse of Operation Golden Flow and imports have been rising year-on-year.

Therefore, the intent to make India "Atmanirbhar" or self-sufficient in edible oils and creating a dedicated Mission for Oilseeds is a well-thought and right move by the Central Government. 

Problem is on the second part of announcement i.e. "increasing cultivation of oil palm in India, particularly in the northeast and Andaman-Nicobar Islands." Now read this with the second important news of the week as below (in fact, most important wake-up call for humankind in the millennia):

IPCC climate report: Earth is warmer than it’s been in 125,000 years

Earth’s global surface temperature has increased by around 1.1 °C compared with the average in 1850–1900 — a level that hasn’t been witnessed since 125,000 years ago, before the most recent ice age. This is just one of the blunt facts appearing in a summary released with the IPCC report.

The report lists a dizzying array of impacts that climate change has had on Earth — and that are already evident from pole to pole. The coverage of sea ice in the Arctic during the late summer has been lower over the past decade than it has been in at least 1,000 years. The ongoing global retreat of glaciers is unparalleled in at least 2,000 years. And oceans are heating up at a pace not seen since the end of the most recent ice age, 11,000 years ago. 

Now combine this dire climate emergency, very low forest cover available in India and India being the highest recipient of climate crisis and what palm has done across the World in terms of deforestation viz. Indonesia.

The palm oil industry was responsible for at least 39% of forest loss on the biodiversity-rich island of Borneo between 2000 and 2018, data from a research firm based in Indonesia shows. Borneo lost 6.3 million hectares (15 million acres) of forest cover between 2000 and 2018, the data from the Center for International Forestry Research (CIFOR), shows.

And now the Indian Government plans to have palm oil plantations in North-East & Andaman Islands, which are one of the last standing tropical evergreen forests in the continent. 

And we also fail to understand the fascination behind Palm Oil. Palm oil is not part of the traditional Indian diet and it does not suit forcefully ingesting such cheap oils at the cost of more nutritious alternatives already available in the country. Palm Oil contains more than 50% saturated fats, is responsible for increasing LDLs and most importantly, creates Trans-Fats during cooking, which are harmful for human health as depicted below:

Further, palm oil has a long gestation period, harvesting of the crop is challenging and oil palm is water guzzling crop. On top of that, the forested and Government owned lands are targeted for Palm Oil cultivation by large Corporates, completely removing farmers from the equation.

Therefore, creating an edible oil self-sufficiency around Palm Oil this is a myopic strategy and in the long run, India will gain by having a stable agriculture policy to boost production of traditional oilseeds like soybean, groundnut, mustard & sesame.

There have been calls to change the current policies of procurement, MSP and inputs mainly directed towards cereals like Wheat & Rice to more towards Pulses & Oilseeds and while we are far off from implementing quota system of crops or acreage due to complexity of implementation, the Government can definitely amend the procurement & MSP policies to motivate farmers towards more Pulses and Oilseeds. Hope, the Government takes the right direction, which can surely make India self-sufficient in Oilseeds and also involve farmers ate every stage.