Set up oil development fund, says SOPA

Our Economic Bureau

New Delhi, June 6: THE Soyabean Processors Association of India (SOPA) has written to the prime minister, Atal Bihari Vajpayee for the creation of an oil development fund (ODF) by leving a cess of Rs 3,000 per tonne on all imported edible oils.

SOPA has cautioned that the move to reduce import duty on crude palm oil (CPO) will be a retrograde step and totally against the interests of oilseed growers.

As the average import of edible oils is five million tonne per year, the total cess likely to be collected for ODF will be Rs 1,500 crore per year.

SOPA has suggested that the minimum support prices (MSP) of kharif oilseeds should be raised by at least 20 per cent. Based on the revised MSPs, the likely prices of edible oils in the country should be estimated and the import tariff fixed accordingly. This will ensure that the oilseed growers are not affected by cheap imports.

Presently, no genetically modified (GM) seeds and crops are allowed into the country for commercial use, India should insist on banning imports of soyabean oils processed out of GM seeds. This will restrict the inflow of soyabean oil into the country and also allay the Malaysian fears, that its exports of palm oil to India would suffer due to massive soyabean oil imports due to lower customs duty.

Against the supply contract of $1.8 billion for developing rail services in Malaysia, India should strike a import contract for a fixed quantity of palm oil at current prices (which are lower) for the next five years. India has been importing an average three million tonne of palm oil annually. Assuming a price of $200 per tonne on FoB basis, India can import 1.8 million tonne every year for the next five years. The balance of 1.2 million tonne should be left open for import at market prices, the SOPA letter stated.

SOPA stated that the country’s import of edible oils shot up primarily due to neglect of the oilseeds sector. At present only 11 per cent of the cultivable area are under oilseeds, while 80 per cent of the cultivable area is under foodgrains and nine per cent are under other crops. There is a need to shift, about five per cent of the area coverage under foodgrains to oilseeds.

The proposed ODF can help in encouraging farmers to switch over to oilseeds. The ODF should provide Rs 2,000 per hectare to farmers to switch over from foodgrains to oilseeds from the ensuing kharif season. Extensionservices for oilseed growers should be provided through electronic and print media and NGOs. Market intelligence through information technology should be given to growers.

Good quality seeds should be made available for sowing, by massively increasing the production of nucleus seeds, breeder seeds, foundation seeds and certified seeds.

The seed replacement ratio by farmers should increase from 10 per cent to 30 per cent. Besides private sector participation in seed multiplication process is required. ODF should fund farmers for procuring modern tools and equipments and other inputs at subsidised rates.