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Oil Palm Mission
Why in news?
- A new centrally-sponsored scheme titled NMEO-OP (National Mission on Edible Oil - Oil Palm) was announced by the Prime Minister during his Independence Day speech in 2021.
National Mission on Edible Oils – Oil Palm: (NMEO-OP)
- Objective: In the next few years oil palm acreage will increase by 6.5 lakh hectares by 2025-26 and crude palm production will increase to 11.2 lakh tonnes by 2025-26 and 28 lakh tonnes by 2029-30.
- Regions: It specially focuses on the Andaman and Nicobar Islands and Northeast regions due to the favorable weather conditions.
- Funding:
- 11,040 crore earmarked for the scheme - Centre's share Rs.8,844 crore and a states' share of Rs.2,196 crore. This amount includes the viability gap funding, as well.
- The scheme will provide financial assistance to oil palm farmers and reward them based on a price and viability formula.
- Although there is no MSP, but the Fresh Fruit Branches price for farmers would be fixed at3 per cent of average landed crude palm oil price of the past five years, adjusted with the wholesale price index
- This will effectively be the first time the Centre guarantees a price for oil palm farmers.
- In order to rejuvenate old gardens, special assistance is being provided at Rs 250 per plant.
Palm oil:
- It is the world's most consumed vegetable oil. It is used in detergents, plastics, cosmetics, biofuel etc.
- India, China, and the European Union (EU) are its top consumers.
Need:
- High Oil yield: Oil Palm is one of the most oil-yielding perennial crops in India and its potential for expansion of production is immense.
- Import dependence: Edible oil imports account for a majority of the country's imports. 60 per cent of the edible oil consumed in the country is imported — more than half of this is palm oil. 98% of the palm oil consumed is imported.
- Cost incurred: A huge cost is incurred and forex reserve consumed in importing such massive quantum of palm oil. For the year 2020-21, edible oil imports costed Rs 80,000 crore
- Oil Security: Countries exporting it to India can use it as a bargaining chip in diplomatic relations affecting India's oil security.
- Inflation: Often the inflation due to edible oils remains very high affecting the economy badly.
Benefit:
- Economy: It will increase capital investment, generate jobs, reduce dependence on imports, and increase income.
- Reduce price risk: In light of volatility in the international market, farmers will have less risk of price fluctuations in the fresh fruit bunches from which oil is extracted.
- Oil security: Contribute towards national self-sufficiency in edible oil requirements. Therefore, foreign exchange would be saved.
Challenges/Concerns:
- Biodiversity loss: Research shows that the spread of oil palm plantations in Southeast Asia has been a major factor in the decline of biodiversity in the region. Hence Indonesia and Sri Lanka have already begun restricting palm tree plantations. The rich biodiversity of North East and Andaman and Nicobar may get destroyed this richness in the region.
- Water pollution: The countries with has also experienced an increase in water pollution as a result of this.
- Water inefficiency: Oil palms require 300 liters of water per day per tree and it can affect water tables.
- Long Gestation: The crop has a long gestation period making it unsuitable for small farmers.
- Pesticidal pollution: Their high pesticide use in non-native areas can lead to consumer health concerns.
- Climate change: As forest cover declines with increasing plantation, the amount of carbon emitted increases, contributing to climate change.
- Cropping pattern: The initial state support to a crop leads a major change in cropping patterns, which are often not compatible with local agro-ecological conditions or food requirements.
- Monoculture: It may promote monoculture as it has better productivity than other oilseeds.
- Low shelf life of fruit: FFB (Fresh Fruit Bunches) of oil palm must be processed within 24 hours of harvest since they are highly perishable.
- Tribal Areas: It will affect tribal lands as the areas targeted under the scheme have tribal areas.
Conclusion:
- India suffers from a huge deficit of edible oils necessitating massive import dependency and forex outgo. Hence it is important to reduce this dependency and ensure oil security of the country. A nuanced policy support that encourages the cultivation of the crop while being mindful of mitigating its negative fallouts is the need of the hour.
Source: The Hindu & Indian Express.