National Mission on Edible Oils – Oil Palm | Boosting employment generation

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Unlocking the Hidden Potential
More income with More Jobs

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India is one of the major oilseeds growers and importers of edible oils. India’s vegetable oil economy is the fourth-largest in the world. To harness the hidden potential of the sector, the Union Cabinet has given its approval to launch a new Mission on Oil palm, i.e. National Mission on Edible Oils – Oil Palm. It has been recognized as a new centrally sponsored scheme with a special focus on the Northeast region and the Andaman and Nicobar Islands.

Let’s get to know more about the Scheme

The Scheme has been launched to increase the domestic production of edible oils where increasing area and productivity of oil palm remains an important aspect. Moreover, a financial outlay of Rs.11,040 crore has been made for the scheme, out of which Rs.8,844 crore is the share of the Government of India and Rs.2,196 crore is State share.

It is also proposed to cover an additional area of 6.5 lakh hectares for oil palm till the year 2025-2026, thus, reaching the target of 10 lakh hectares.

It is also worth noting that the production of Crude Palm Oil is expected to reach up to 11.20 lakh tonnes by 2025-2026 and up to 28 lakh tonnes by 2029-2030.

The Scheme offers several benefits. Let’s learn about them.

The scheme will immensely benefit the oil palm farmers, increase capital investment and will help in boosting employment generation. It would be quite beneficial in reducing the import dependence and increasing the income of the farmers.

It is important to know that oil palm farmers produce Fresh Fruit Bunches from which oil is extracted by the industry. Currently, the prices of these Fresh Fruit Bunches are linked to the international Crude Palm Oil prices fluctuations.

Recognizing the need for transformation, for the first time, the Government of India will give a price assurance to the oil palm farmers for the Fresh Fruit Bunches. This will be known as the Viability Price. This will protect the farmers from the fluctuations of the international Crude Palm Oil prices and will also save them from volatility.

An assurance will also be provided to the farmers in the form of the viability gap funding and the industry will be mandated to pay 14.3% of the Crude Palm Oil price which will eventually go up to 15.3%. Moreover, to give impetus to the North-East and Andaman, the Government will additionally bear a cost of 2% of the CPO price to ensure that the farmers are paid at par with the rest of India. The states who adopt the mechanism would benefit from the viability gap payment proposed in the scheme and for this, they will enter into MoUs with the Central Government.

The scheme will also help in substantially increasing the assistance of inputs/interventions. A substantial increase has already been made for planting material for oil palm and it has increased from Rs 12,000 per hectares to Rs.29000 per hectares. Further, a substantial increase has been made for maintenance and intercropping interventions. Special assistance of Rs 250 per plant is also being provided to replant and rejuvenate old gardens.

Special assistance to the North-East and the Andaman regions

To augment the amount of planting material in the country, seed gardens will be provided assistance of up to Rs.80 lakhs for 15 hectares in the rest of India and Rs.100 lakhs for 15 hectares in the North-East and Andaman regions.

Further, special provisions are being made for half moon terrace cultivation, bio fencing and land clearance along with integrated farming for these regions. Also, capital assistance would be provided to the industry, for the North East states and Andamans, through a provision of Rs 5 crore of 5 metric tons per hour unit with a proportional increase for higher capacity. This will also suffice the idea of attracting industry to these regions.

Huge potential in oil palm plantation

Besides, there is huge potential in oil palm plantation and subsequent production of Crude Palm Oil. Therefore, many efforts have been made by the Government of India to increase the production of oilseeds and oil palm. The oilseeds production has increased from 275 lakh tons in 2014-2015 to 365.65 lakh tons in 2020-2021. To harness the potential of palm oil production, in the year 2020, an assessment has been made by the Indian Institute of Oil Palm Research for the cultivation of oil palm which has given an assessment of around 28 lakh hectares.

Realizing the need of the hour, the government is continuously trying to utilize the domestic resources to maximize production and ensure edible oil security for the country.

Sources/Visuals

https://pib.gov.in/PressReleseDetailm.aspx?PRID=1746942
https://nmoop.gov.in/