Mains Paper 3: Economy
Prelims level: National Edible Oil Mission-Oil Palm
Mains level: Agriculture related issues
• Recently Indian PM as a part of Aatmanirbhar Bharat Abhiyan announced Rs 11000 crore National Edible Oil Mission-Oil Palm (NEOM-OP).
• To augment domestic edible oil supplies and bring down the import bill drastically.
• To bring an additional 6.5 hectares under oil palm by 2025-26, of which half of the cultivation would be in the Northeast.
• Covering a million hectares of area under oil palm by 2025-26.
• Achieving self-sufficiency in edible oil production.
Need for NEOM-OP:
• It will help oil palm production growth and reduce the country’s dependence on palm oil imports because India on average imports 18.41 million tonnes of vegetable oil.
• The Yellow Revolution of the 1990s led to the raise of oilseed production and increased diversification of oilseeds, but it did not match the increasing demand.
• The incentive to promote palm cultivation comes from the success stories of Indonesia and Malaysia that have become a significant palm oil hub in the last decade with 80% of global oil palm production.
• Due to global edible oil market volatility, edible oil inflation in the recent past has been spiked way high.To tackle this volatility, domestic production needs to be ramped up.
• To focus on productivity and area expansion by supporting farmers via:
1. A 20,000-29000/ha input assistance for planting material,
2. Additional assistance to cover maintenance/opportunity costs of farmers.
3. 5 crore assistance to industries to set up a processing unit.
4. 1 crore assistance to seed gardens in the Northeast (80lakhs for rest of India)
5. Support for vermiculture, irrigation and farm mechanization.
Oil palm cultivation has disastrous environmental and social consequences.
• Studies have shown that increasing oil palm plantation is a major reason for the region’s declining biodiversity.
• For instance, Indonesia has lost 1,151495 million hectares of forest cover in 2020 mainly to oil palm production.
• From 2002-18, Indonesia lost 91, 54,000 million hectares of its primary forest cover.
• Along with adversely impacting the country’s biodiversity, it has led to increasing water pollution.
• At the same time, decreasing forest cover has significant implications with respect to increasing carbon emission levels and contributing to climate change.
• The Palm oil plantations have also stoked conflicts between govt policies and customary land rights.
• Legislation allowing the clearing of tree cover and cutting forests for growing palm trees has led to increasing land-related tussles between govt and locals in Malaysia and Indonesia.
Challenges for NEOM-OP implementation:
• Achieving edible oil self-sufficiency will result in lashing down the area under cereal crops which would be very difficult to implement.
• Because unlike massive procurement programme for Wheat, govt lacks one for oil seeds which will make difficult to push farmers in switching from wheat to oilseeds.
• As climate change/crisis pushing India to a water-scarce nation, promoting water-guzzling edible-oil crops would be difficult to its plan for sustainable agriculture.
• A critical element in the entire programme is the sensitive issue of pricing formula for fresh fruit bunches (FFB) of oil palm.
• Since there is no MSP, the FFB itself needs to protect the farmers from oil price volatility, therefore FFB needs to be calibrated very carefully.
• The Northeastern states that are politically sensitive areas may breed tensions due to the oil palm initiative.
• This initiative also goes against the notion of self-reliance where it shifts quickly the existing cropping pattern that is not always in sync with the agro-ecological conditions and food requirements of the region.
• The policy has begun impacting the forest cover as farmers are switching from traditional crops to palm oil.
• However, the Northeastern people do not use the oil for cooking purposes but use it only for industries.
• The current initiative ignores the ground realities of the Northeast region. Where the palm oil policy could destroy the Northeast’s rich biodiversity.
• The policy also contradicts the govts commitments under National Mission for Sustainable Agriculture.
• While this Sustainable Agri mission aims for more productive, sustainable remunerative and climate resilient agri by promoting location-specific farming systems, but the palm oil policy aims at achieving complete transformation of the farming system of Northeast India.
• This agriculture shift is not self-sustaining and makes local communities vulnerable and exposes them to external factors.
Benefits of NEOM-OP:
• It had a positive impact on poverty eradication in Malaysia by increasing income levels of small and marginal farmers.
• Reduces imports of India’s edible oil mainly palm oil and increases vegetable oil production.
• It will provide higher yields and better returns which has been witnessed in the case of Indonesia.
• It increases job opportunities in the Northeastern region and subsequently, their level of living standards increases.
• It may also lead to a reduction in domestic edible oil costs which benefits the consumer.
• To raise oil palm productivity, proper care of palm oil crop needs to be taken, provide good planting material, ensure better irrigation and fertilizers management.
• Govt needs to preserve the environment and biodiversity while implementing the palm oil initiative.
• For instance, Indonesia and Sri Lanka started restrictions based-palm oil production.
• Govt needs to include Palm oil cultivation under Food Crop insurance to protect farmers from adverse consequences.
• Govt also needs to consider MSP for palm oil because of the high volatility of prices in the sector.
• A Comprehensive and Long-term policy mechanism in the palm oil arena is the need of the hour.
• Govt needs to implement CACP recommendations that India should keep an import trigger and if the import price falls below, the tariff needs to go up in a countercyclical manner.
• At the same time, govt needs to ensure synchronization of import duty with rational domestic policy.
• Lastly, govt needs to address effectively and efficiently various environmental and social issues such as deforestation, water and community rights.
• The need of the hour is to devise a crop-neutral incentive structure to align cropping patterns with demand patterns and the crops need to be produced in a globally competitive manner.
Q.1) With reference to the medicinal plants, consider the following statements:
1. The National Medicinal Plants Board (NMPB), Ministry of AYUSH has launched a national campaign to promote cultivation of medicinal plants in the country as part of the Azadi Ka Amrit Mahotsav.
2. Under this campaign, cultivation of medicinal plants will be done on 75,000 hectares of land in the next one year across the country.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.1) Highlights the pros and cons behind the establishment of the National Edible Oil Mission-Oil Palm.