The States like Telangana where oil palm cultivation is being encouraged in a big way with incentives have flagged the issue of high import tax on oil palm seeds and rightly advocated tax reduction
The recently unveiled Rs 11,000-crore National Mission to boost palm oil production and reduce the dependence on imports will prove beneficial for the country in the long run, provided it remains farmer-centric, addresses the environmental concerns and stays away from becoming a target for corporate lobbying. The States like Telangana where oil palm cultivation is being encouraged in a big way with incentives have flagged the issue of high import tax on oil palm seeds and rightly advocated tax reduction. While ramping up domestic production, there is also a need to rationalise the import tax by bracketing the oil palm seeds under the fruit seeds category. The annual demand for edible oil in India is about 22 million tonnes while the oil seed production is only 7 million tonne. As a result, the country is now importing palm oil worth Rs 70,000 crore annually. As the existing oil palm seed gardens in the country are unable to meet the demand, private companies are importing oil palm seed sprouts. In some quarters, there are apprehensions that the big corporations may lobby for changes in land ceiling laws to enable them to go for industrial-scale plantations rather than sourcing their raw material from farmers. It is possible that in the future these corporations will eye ecologically sensitive non-forest areas in the northeastern States. However, regulations governing the national mission must be framed appropriately to avoid such exploitation. If done on a mission mode, the large-scale oil palm cultivation would serve the cause of self-reliance.
At present, 56% of total edible oil imports come from palm. There is a strong case for ramping up domestic production to reduce both import dependency and prices. Palm oil and its derivatives account for the largest share among vegetable oils in the country. Thus, the Centre’s Atmanirbhar plan for palm oil production through increased cultivation makes sense. It seeks to raise the crude palm oil production to 11 lakh tonnes by 2025-26, during which 6.5 lakh hectares of land will be added to the existing 3.7 lakh hectares. Oil palm is land-use efficient, yielding 3-4 tonnes per hectare, compared with 1 tonne per hectare for other oil seeds. Marginal paddy farmers, producing less than 2 tonnes per hectare, will stand to benefit if they switch to oil palm cultivation. The new scheme will have the Centre providing Rs 8,844 crore while the States will have to chip in with Rs 2,196 crore. Significantly, India’s push for palm oil self-reliance has a special focus on the Northeast and the Andaman Nicobar Islands, the two ecologically sensitive regions. The Centre must ensure that environmental safeguards are in place and health interests are not compromised.
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