Centre to boost Oil Palm Farming

• Prime Minister Narendra Modi has announced this new national initiative on palm oil production to help increase farm incomes.
• The scheme involves investment of over Rs 11,000 crore.
• North-eastern states and Andaman and the Nicobar Islands could be promoted for palm oil farming.

Background

• India is the world's biggest importer of edible oils. India is highly dependent on imports of edible oil to meet domestic demand. Out of India's total edible oil imports, palm oil constitutes about 55 percent.
• As per official data, India imported $10 billion worth of vegetable oil in 2019-20, making it the country’s fifth most valuable import.
• Prime Minister Narendra Modi also pointed out that India has spent thousands of crores of rupees on edible oil imports and this money rather should go to farmers.
• The Prime Minister said that north-eastern states and Andaman and the Nicobar Islands could be promoted for palm oil farming.

Palm Oil

• Palm Oil is one of the cheapest edible oil available naturally and it is relatively stable at high temperatures.
• It is, therefore, suitable for reuse and deep-frying.
• It is used extensively in the production of detergents, plastics, cosmetics, and biofuels.
• Top consumers of the commodity are India, China, and the European Union (EU).

National Edible Oil Mission-Oil Palm

• Under the National Edible Oil Mission-Oil Palm, the central government will ensure that farmers get all facilities including quality seeds and technology to promote farming to produce palm oil and other oil seeds.
• The mission will promote the cultivation of oil palm.
• It will also promote the expansion of the cultivation of other traditional oilseeds crops.

Aims and Objectives of the scheme:

1. Achieve self-reliance in edible oil.
2. Harness domestic edible oil prices that are dictated by expensive palm oil imports.
3. To raise the domestic production of palm oil by three times to 11 lakh MT by 2025-26.

Benefits and significance of the scheme:

• It is expected to incentivise production of palm oil to reduce dependence on imports and help farmers cash in on the huge market.

Need for such schemes:

• India is the largest consumer of vegetable oil in the world. Of this, palm oil imports are almost 60% of its total vegetable oil imports.
• In 2016- 2017, the total domestic consumption of palm oil by India was 9.3 million MT, with 98.97 percent of it imported from Malaysia and Indonesia.
• This means India was producing only 1.027 per cent of its requirement.
• Also, in India, 94.1 per cent of its palm oil is used in food products, especially for cooking purposes.
• This makes palm oil extremely critical to India’s edible oils economy.