Yellow Revolution 2.0

The price policy of the government which already encourages oilseeds production needs to be complemented by large-scale procurement

yellow revolution, edible oil, edible oil demand, oil seeds,
In this regard, a three-pronged strategy encompassing interventions at farm, institutions and policy level can help in effectively bridging India’s supply deficits in edible oils.

By Leena Kumar & Chitvan Singh Dhillon

It’s hard to imagine the quintessential Indian rasoi without edible oils. From our run-of-the-mill everyday menu to fancy festive cuisines, edible oils continue to remain an indispensable commodity in the grocery list of household items. However, the demand for edible oils is ever increasing on account of an exponential rise in population, dynamic consumption pattern in the backdrop of rising incomes and evolving dietary patterns. In spite of high demand for edible oils, a substantial part of India’s domestic requirement of edible oils is being met through imports. This is primarily because production and domestic availability of oilseeds in the country falls short to match the domestic demand for edible oils.

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The statistics are shocking. For instance, the domestic demand for edible oils in the country grew from 170.24 lakh tonnes in 2010-11 to 267.1 lakh tonnes in 2021-22, registering an average annual growth rate of over 5 percent. However, for the same reference period, the domestic supplies of edible oils have improved only marginally from 97.8 lakh tonnes to 126.4 lakh tonnes. Needless to say, the yawning gap between the domestic demand and supply had to be met by increasing volumes of imports. Resultantly, India’s imports of edible oils more than doubled from 69 lakh tonnes in 2010-11 to 143 lakh tonnes in 2021-22. This cost the exchequer a whooping ?142 thousand crore in 2021-22! For perspective, this amount is roughly 55 percent of India’s total import bill of agricultural commodities. If that’s not enough, consider this. India is projected to account for 17% of global imports of vegetable oils by 2031, according to the projections made in OECD-FAO Agricultural Outlook 2022-2031. Hence, it is a foregone conclusion that the import dependency of India’s edible oils sector will only accentuate in the coming decade.

Several policy initiatives have been taken to enhance oilseeds production in the country. In 1986, the Technology Mission on Oilseeds was rolled out with an overriding objective of enhancing the domestic production of oilseeds in the country. Other key initiatives taken by Government of India include National Food Security Mission on Oilseeds, targeting rice fallow areas, seed hubs on oilseeds, cluster demonstrations of improved technology etc. However, these initiatives met with limited success in improving the health of the oilseeds sector in the country. This is primarily attributable to cereal-centric farm policy dictated by food security concerns. Consequently, oilseeds cultivation was pushed to the marginal and semi-arid areas where fertility status of land was poor and which were susceptible to drought like conditions.

Accordingly, there remains a large gap between the domestic demand and supply of edible oils in the country till date. Therefore, from the policy perspective, there is a pressing need to formulate a comprehensive strategy to enhance oilseeds production and processing with technological improvements, efficient marketing management and supportive trade policy. In this regard, a three-pronged strategy encompassing interventions at farm, institutions and policy level can help in effectively bridging India’s supply deficits in edible oils.

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It is pertinent to note that the considerable yield gaps in oilseeds persist at farm level due to unavailability of new and higher yielding seeds. This is also reflected in the low Seed Replacement Rate (SRR) and Varietal Replacement Rate (VRR). Seed Replacement Rate stands for the percentage of total cropped area sown with certified or quality seeds relative to farm saved seeds. VRR, on the other hand, measures the proportion of new and improved varieties of seeds at the farm level in comparison to the old and dominant varieties of seeds. Higher VRR is positively correlated with crop productivity. Accordingly, timely provision and adequate availability of quality seeds during the sowing period is of paramount importance. Sans this crucial input, the incentives in the forward leg of oilseeds cultivation would also be blunt in their effectiveness. Once the access and affordability of seeds is made seamless, strategies like micro-irrigation, integrated pest-management and inter-cropping would provide a fillip to the domestic production of oilseeds.

India’s premier agricultural research institutions have a ready stock of high yielding, drought resistant and early duration oilseed varieties, waiting to be multiplied at a commercial scale and launched into the fields. It is a major disappointment that while the scientific research for the purpose has been accomplished, its results are yet to be realised at the farm level. State governments are ideally placed to actively leverage this research and ensure timely availability of quality seeds to the farmers. At the macro level, it is estimated that 5-6 million tonnes of edible oils can be produced only by bridging the existing yield gaps.

So far, oilseeds are chosen by the farmers as residual crops for inferior plots of land, given the lack of marketing channels and remunerative prices in local mandis. For this to turn around, the price policy of the government which already encourages oilseeds production needs to be complemented by large-scale procurement. This will gradually shift out skewed cropping patterns, from water-guzzling crops like paddy and sugarcane to the crops like oilseeds, in which the country faces structural deficit.

Concerted efforts in implementation of the aforementioned interventions would help in realizing India’s ambitious goal of achieving Atmanirbharta in edible oils. Can India muster its agricultural resource planning to achieve this—it can and it must!

The authors are officers of Indian Economic Service, working with Commission for Agricultural Costs and Prices, Ministry of Agriculture and Farmers Welfare, Government of India. Views are personal

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First published on: 23-04-2023 at 12:49 IST