Agriculture Ministry proposes Rs 19,000-cr plan for edible oil in Budget

NEW DELHI: The agriculture ministry has proposed a ₹19,000 crore national mission on edible oil for approval in the upcoming budget. The mission entails a five-year plan aimed at achieving self-sufficiency in production of cooking oil while cutting down its increasing import, which costs ₹75,000 crore to the exchequer annually. Local production may also ease the prices of cooking oil.

“We import around 15 million tonnes of cooking oil, which caters to 70% of our annual requirement of 23 million tonnes. In the next five years, we are aiming at zero import which will not only help the domestic oil industry but also ensure availability of cooking oil to consumers at economical cost,” said a senior agriculture ministry official, who did not wish to be identified.

Last year, while presenting the budget for 2020-21, finance minister Nirmala Sitharaman had urged farmers to make India self-sufficient in edible production. However, the budget did not allocate any funds for that.

The mission may be funded by levying a cess of ₹2,500-3,000 per tonne on import. This will generate a corpus of ₹6,000 crore per year, besides making domestic industry more competitive.

“Government earns around ₹30,000 crore annually through import duty, which ranges from 27.5-35% on crude edible oil. It may create a fund of ₹5,000-10,000 crore from that to promote this sector,” said BV Mehta, executive director, Solvent Extractors Association of India (SEA). Mehta said the mission would be a game changer as it promises to be a win-win for the government, domestic industry, farmers as well as consumers. “The country will reduce current account deficit, industry will become competitive, farmers will earn more while consumers will get cooking oil at economical rates,” he said.

The government is focusing on promoting oil palm cultivation in the country. Palm oil accounts for more than 60% of the total imports. At present, fruit-bearing oil palm trees cover only 225,000 hectares, which may be increased to 325,000 in a year.

“We need to incentivise farmers to grow oilseeds also. Area under mustard has gone up 8% and we expect with monetary motivation, it can go up further. Similarly, areas under groundnut, soybean and sunflower will also expand if proper incentives are given,” said the official.