Price assurance to oil palm farmers aimed at reducing imports: Economic Survey

Increasing oil production has been a priority for the government in view of the persistently high import of edible oil and hence, for the first time, the government will be giving a price assurance to the oil palm farmers for the Fresh Fruit Bunches (FFBs), the Economic Survey 2021-22 said.

“This will be known as the Viability Price (VP), which will protect the farmers from the fluctuations of the international crude palm oil (CPO) prices,” it said.

In August 2021, the government launched the National Mission on Edible Oils – Oil Palm (NMEO-OP) to augment the availability of edible oil in the country by harnessing area expansion and through price incentives in view of the enormous potential for cultivation of oil palm and production of CPO.

“At present, only 3.70 lakh hectares is under oil palm cultivation. Oil palm produces 10 to 46 times more oil per hectare compared to other oilseed crops and has a yield of around 4 tons oil per ha. Given the fact that even today, around 98 per cent of CPO is being imported, the NMEO-OP may be considered a major initiative of the government,” the Survey said.

The scheme aims to cover an additional area of 6.5 lakh hectares for oil palm till 2025-26 and thereby, reach the target of 10 lakh hectares ultimately. Also, the scheme targets the production of CPO to go up to 11.20 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.

This is part of the larger scheme of edible oil production wherein the government is promoting the production and productivity of oilseeds through the centrally sponsored scheme of National Food Security Mission: Oilseeds (NFSM-Oilseeds) from 2018-19 onwards in all districts of India.

Under this scheme, interventions such as production of foundation and certified seed and distribution of certified seeds and seed mini kits of latest high yielding varieties are undertaken. Under the NFSM (Oilseeds), the government has set up 36 oilseeds seed hubs during 2018-19 and 2019-20 with an objective to increase the availability of high yielding quality seed, the Economic Survey said.

“For Kharif 2021, a total of 9.25 lakh oilseed mini kits of high yielding varieties have been allocated for distribution in all the major oilseed growing states. Also, the government has through the MSP regime been providing price signals for crop diversification towards production of oil seed,” it said.

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