India

For Palm Oil Production Indian Govt in Action encourage farmers.

With India’s edible palm oil imports projected to rise manifold in the coming years, the Union Cabinet today approved a new Rs 11, 040 crore mission to boost domestic palm oil production.

A highlight of which was an MSP-type tool for ensuring a benchmark assured price to farmers along with side scarcity price payment through DBT.

The decision comes after Prime Minister Narendra Modi announced the new central scheme on August 15 during his Independence Day speech at Red Fort to reassure the increase in the production of Palm oil in the future.

Under the new assured price mechanism, the government said that it will give price assurance to the palm oil farmers for their Fresh Fruit Bunches (FFBs).

the crops which are used to extract the vegetable oil come under FFBs. This will be known as the Viability Price (VP).
“This VP shall be the seasonal mean CPO price of the last 5 years modified with the wholesale price level to be increased by 14.3 percent,” the government said in a statement.

This will be adjusted yearly for the feather palm year from 1st November to 31st October.
“This conviction will implant trust within the Indian feather palm farmers to travel for the increased area and thereby higher production of vegetable oil.

It further said that the reassurance to the farmers is going to be within the sort of the viability gap funding and therefore the industry is going to be mandated to pay 14.3 percent of the CPO price which can eventually go up to fifteen .3 percent.

the agricultural Minister Narendra Singh Tomar told the reporter after ending the meeting that adjacent income sources of farmers remain invested enough because projects like the cultivation of feather palm take very long span for maturation that is of 5 to 7 years before it gives any returns to the farmer

Also to give motivation to the Andaman, the Government will carry the cost of 2% of CPO price which will be paid to farmers at standard with the rest of India
That apart, the union cabinet also approved an incentive of Rs 5 crore for the oil palm processing units if they plan to set up their industry in North-Eastern states.

The data support for farmers has also been increased from the present Rs 12,000 per hectare to Rs 29,000 per hectare.

“The Indian Council of Agriculture Research (ICAR) has recognized that around 2.8 million hectares of land in the country is fitting for palm oil cultivation of which just around 0.9 million is in North-East India which won’t be used by cutting standing forests or moving farmers from other crops,” Tomar assured.

He said aside from the benchmark price special assistance at the speed of Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.

To address the difficulty of shortage of planting material within the country, seed gardens are going to be assisted up to Rs 80 lakhs for 15 hectares in the remainder of India and Rs 1 crore for 15 hectares in North-East and Andaman regions.

Further, assistance for seed gardens at the speed of Rs 40 lakhs and Rs 50 lakhs for the remainder of India and North-East and Andaman regions respectively.

The overall structure of the investment which is going to be needed for this is around Rs.11,040 Crores out of these the central government will be part of this project by contributing Rs.8,844 Crores and states will have to carry on with the share of Rs.2,196.

The Target

According to officials, the new Mission plans to extend plume palm farming to 1 million hectares by 2025-26 and 1.7-1.8 million hectares by 2029-30.

At present, but 0.5 million hectares, around 0.34 million hectares is under feather palm oil cultivation in India domestically largely in Andhra Pradesh and a couple of North-Eastern states.

The domestic vegetable oil production is targeted to rise by 3 times to 1.1 million hectares by 2025-26 under the Mission and a couple of .8 million tonnes by 2029-30.
Import Dependency.

India annually imports around 13-15 million tonnes of edible oil of which just about 55-60 percent is vegetable oil alone. This is projected to travel up 20 million tonnes by 2030 thanks to rising disposable incomes and changing food habits.
Palm oil is essentially imported from Malaysia and Indonesia, for whom India is that the biggest consumer.
Trade Reaction.

Sanjay Goenka, President of feather palm Developers and Processors Association (OPDPA) said that the shaft palm crop may be a highly profitable crop (to the farmer) that has the potential to supply a tremendous return on investment per acre balanced to other commercial crops.

While, Babulal Data, President, Central Organization for refining industry and Trade (COOIT) said the choice to compensate farmers of feather palm just in case the costs fall below minimum support price and enhancement of input subsidy from Rs 12,000 per hectare to Rs 29,000 per hectare will encourage farmers to undertake cultivation of feather palm Oil.

Author P

Simon has a Masters in Business Management, but due to his keen interest in journalism he started his career by becoming a freelance contributor. Initially joining us as a part-time contributor, Simon quickly managed grab a permanent position in our editorial staff. He covers finance, money and Education news and analysis.

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