The minister for consumer affairs and public distribution has promised thedomestic soyabean trade to review the import duty on oilseeds (40 per centplus) and edible oils (15 per cent). Since the domestic price of oilseedshas fallen below the minimum support price, minister Shanta Kumar shouldhave addressed the problem created by the imported oil glut (an estimatedhalf a million tonnes of unsold stock) on his own instead of waiting forsoyabean traders to appeal to him at Indore.Actually, several representations gather dust in the dovecotes in New Delhiwhile the country merrily imports edible oils to saturation point. At stakeis the future of oilseed farming. Growers will not sow so long as edible oilprices are low (which has depressed oilseed prices to unremunerativelevels); and declining domestic production of oilseeds and edible oils forceup imports of edible oils. Import dependence is just one aspect of theproblem. More serious is that India's imports as a proportion of theinternationally traded marketable surplus is on the high side. True, inyears of large harvests and crushing abroad import prices are low.
The domestic consumer benefits from the consequent low edible oil prices.But in normal (and sub-normal) years, India has to pay a stiff import pricewhich must be borne by the consumer. But Shanta Kumar seems to think edibleoil imports are a permanent bonanza for the Indian consumer. He should lookup the history of domestic oilseeds production and of fluctuations in pricesof imported edible oils during the 70s and the 80s. India's vulnerabilityinspired the oilseeds mission which gave an impetus to domestic soya andsunflower farming; that gradually stabilised domestic edible prices overall.
It is time the minister paid attention to the oilseed growers' plight. Hemust take the initiative to get the import duty on edible oils raised. Ifdomestic edible prices rise (despite large imported stocks) in consequence,that will not be a bad thing. Farmers will take heart and get back to sowingin the rabi.
With regard to sugar too, Shanta Kumar uses the import argument ofbenefiting the consumer. But imports (at 27 per cent duty against 120 percent in EU, 100 per cent in the US and 55 per cent in Australia) are erodingthe domestic industry's ability to remunerate the sugarcane grower. Indiansugar is competitive but the 40 per cent sugar levy skews prices. Thecorrective is not low duty sugar from abroad, but withdrawal of the levy(which principally benefits the halwai). However, why blame Shanta Kumar?Policy requires to be reviewed at the highest level of government.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.