Palm Oil

The burden of edible oil imports has been increasing and edible oil prices have been rising sharply. Hence it was only to be expected that the government will soon announce some major initiative to resolve this crisis. On August 18 the Union Government announced the National Mission on Edible Oils with a financial outlay of Rs. 110,40 crore ( one crore=10 million) to promote the domestic cultivation of palm oil fruit trees in the next five years. It is planned to raise the area of palm oil fruit  trees to about 10 lakh ( or one million ) hectares from the existing 3.7 lakh hectares by 2025-26.

This scheme will subsume the current National Food Security Mission—Oil Palm program. Hence the entire allocation cannot be treated as a new addition. What is more the government initiative is now mainly focused on palm oil while the main traditional oilseeds preferred by Indian farmers and consumers such as groundnut and mustard are not receiving the due encouragement.

If the government development funds are to be concentrated so much on palm oil, then this will be at the cost of giving due encouragement to the farmers who are very well experienced in growing these and other traditional oilseeds. Palm oil fruit trees will anyway take some years to grow and hence cannot provide immediate relief, while extending much more resources for boosting groundnuts or mustard or sesame would have given immediate results within a single crop season.

The Food and Consumer Affairs Ministry had earlier informed the Rajya Sabha in the first week of  August  that the sharpest rise in retail  price of edible oils has been recorded in 2021 on a year-on-year basis since 2016. The price of sunflower oil this year has increased by 41%, folowed by a rise of 37% for soyabean oil, 35% for palmolin oil, 29% for mustard oil, 17% for groundnut oil and 30% for the so-called vanaspati ( hydrogenated oil). All these figures are  in comparison to the previous year .

If a big relief is to be given to the consumer in the short run without increasing the already high import burden, clearly the right approch is to immdiately push for a big increase in production of traditional oilseeds. Price rise trends have also revealed that the price rise is more for those oils in which a big share is imported. Hence giving a high emphasis to increasing traditional oilseed production is the right step forward.

India has a very rich heritage of cultivation and processing of several indigenous oilseeds.Traditionally, farmers in vast areas of India have  rich experience in cultivating   groundnut, mustard, sesame, coconut, not to mention cottonseed and some other oilseeds including  several minor but nutritious oilseeds ( such as those grown by tribal and hill communities).

These various oilseeds used to be well-integrated in the overall crop-rotations and mixed farming systems, related also to soil and water conservation needs. Linked to this cultivation of oilseeds were a very large number of cottage and small-scale oilseed processors. When oilseed was processed close to villages which produced them, edible oil obtained was more nutritious and villagers could  also have better access to the by-product of oilcakes needed for dairy animals, increasing milk production, resulting in more local production of ghee, considered a very healthy cooking medium in villages.

Oilseed crops gave several other residual nutritious edibles in other forms including nuts and dry fruits, raw and ripe coconut slices, coconut water , green leafy vegetables etc. Good quality edible oils also have health uses as medicine and for massaging body. The path ahead is to build further on these strengths, utilizing well the experience and skills of our farmers regarding these traditionsl oilseeds, at the same time integrating small-scale oil processing and animal husbandry with this so that there is adequate availability of pure , safe, high nutrition oilseeds as well as highly nutritious concentrate animal feed in the form of freshly processed , locally available oilcakes.

With this rich heritage India has the potential to emerge as a world leader in healthy edible oils, providing the base for sustainable livelihoods of a very large number of farmers and processors. This potential could not be realized so far because of hurried, unwise changes in crop rotations and mixed farming systems, as well as lack of adequate encouragement for farmers growing traditional oilseeds. Under the existing system edible oil traders, big processing units and importers as well as oilcake exporters have been getting rich while farmers growing traditional oilseeds have been languishing.

At the same time the nutrition quality and safety of edible oils has declined. As  importers increased their profits by importing cheaper and less healthy oils , farmers growing traditional oils started having more difficulties in getting a fair price for their crop ( despite consumer preference for indigenous oilseeds) due to the ready availability of much cheaper alternatives. Hence the cheaper imported oils were used as a disincentive to grow indigenous oils, a trend which went on increasing and was facilitated greatly by the WTO trade regime.

With the introduction of genetically modified cottonseed oil, a by-product of the spread of Bt cotton, health hazards associated with edible oils increased further. It is suspected that some GM edible oils have also been imported,and the GM lobby made very strong efforts to introduce GM mustard crops as well, a move whoch would have been disastrous for health and nutrition if it had succeeded ( it came very close to succeeding as the GM lobby is very strong in the present union government and these attempts are still continuing).

Once the oilseed sector had got dominated very heavily by imports, it was only a matter of time when any big increase in the price of imports would lead to a big rise overall in edible oil price in India, as big business and traders interests have also got used to squeezing big profits out of oil trade deals.

However the real policy option is to provide many sided encouragement to farmers to increase organic production of oilseeds and emerge as a world leader in oilseeds. To make this a reality it is very important to reduce the grip of big business and importer lobbies, and to keep away the GM crop/food lobby for ever.

Palm oil fruit is a high yield, low price crop and if it  dominates the domestic oil producton within a decade or so, then this will erode the prospects of traditional oilseed crop farmers whose chances of getting a fair price in market will be reduced further. Advancing palm oil in a country can be understood in a country with lack of traditional oilseed crops, but is not at all advisable for a country which is so rich in many tradional oilseeds. By flooding the market with  palm oil if the market of traditional oilseed farmers is destroyed, then the country’s edible oil sector will be permanently dominated by an exotic crop  which may not be suited in the longer-term to local conditons. Hence it is much more advisable to concentrate mainly on traditional oilseed crops where our real strengh exists.

Instead of moving in this direction the government has chosen to further promote big business interests in farming sector by relying more on the non-traditional, non-indigenous palm oil which is mostly processed in very big industral units. Palm oil has been the most controversial edible oil of recent decades as its producton was promoted in many countries in ecolgically destructive ways.

Its spread has been associated with increasing soil erosion and heavy use of water, hence it creates problems for other farmers. Monoculture plantations of palm oil fruit trees have been raised often by using heavy doses of chemical fertilizers and pesticides leding to serious ecological problems. As processing huge units generally require vast amounts of palm fruit, often pressure is generated to bring forest and degraded forest areas also under this tree. In the process biodiversity suffers heavy damage . In areas where palm oil plantations will be promoted under the recently announced scheme in a big way ( ecologically highly sensitive areas and biodiversity rich  areas  like the North-East region and Andaman and Nicobar, plus some other states to a lesser extent), it will be important to monitor what is lost and displaced in the process of promoting palm plantations.While extracting oil from palm fruit a very harmful pollutant POME ( Palm Oil Mill Effluent) is generated which has been responsible for very serious water pollution in many palm plantation zones in the past.

On the whole the palm oil plantation based scheme  of edible oils should be seen as yet another example of the present regime’s tendency to advance big agribusiness interests at the cost of farmers.

Bharat Dogra is a journalist and author. His recent books include Man Over Machine ( Gandhian Ideas For Our Times) and When the Two Streams Met ( Freedom Movement of India).


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