To boost domestic production and reduce import dependence of cooking oil, the Commission for Agricultural Costs and Prices (CACP) has recommended linking the minimum support price (MSP) of oilseeds with oil content, based on scientifically determined benchmarks.
“Oilseed lots with oil content above the benchmark should receive a proportionate price premium,” the CACP in its price policy report for rabi crops for marketing season (2027-28) said. The commission which recommends MSPs for 23 crops to the government, suggested augmenting oilseeds production from alternative domestic sources such as rice bran given the ‘abundance’ of availability.
Currently, the government announces the MSP for kharif and rabi oilseed variants—soybean, groundnut, mustard and safflower—aimed at boosting domestic output. For encouraging crop diversification, MSP of oilseeds such mustard and safflower have been hiked in 6.6% to 10% for the 2027-28 marketing season (April-June). However, current mandi prices are ruling above MSP rates.
CACP also recommended a comprehensive strategy to enhance edible oil productivity including increasing oilseeds yield through improved technologies and agronomic practice, developing seed varieties with higher oil content and incentivising farmers to cultivate high oil-content variants of seeds.
India imports about 58% of its cooking oils consumption, mostly palm, soybean and sunflower. Imports valued at $ 18.3 billion in 2024-25 oil year (October-September). Share of domestic edible oils includes mustard (45%), soyabean (24%) and groundnut (7%) and others.
“The high dependence on edible oil imports is largely due to the rapid increase in domestic consumption and relatively slower growth in edible oil production compared to oilseeds production,” according to the report.
The commission also stated that pulse procurement faces challenges such as delays in the commencement of purchase in some states, insufficient storage and warehousing infrastructure, limited procurement centres, inadequate awareness among farmers regarding procurement procedures, etc.
“In some states, procurement of pulses is linked to land records and cropping databases, and therefore, any discrepancies in land records and cropping pattern databases affect timely procurement,” according to the CACP report. The commission has noted ‘time lags’ between the approved date of the states’ proposal for procurement by the agriculture ministry under the price support scheme (PSS) and the actual start of procurement by the state.
The country imports around 18% to 20% of its annual pulses consumption valued at $ 3.57 billion in FY26.
Despite increase in pulse procurement n last decade, the commission has also flagged several issues faced by agencies such as Nafed and NCCF including inadequate scientific storage infrastructure during large-scale procurement, delay in payments to farmers due to non-availability of the required revolving fund under the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) from some state governments, and operational inefficiencies.
PM-AASHA integrates PSS and price stabilisation fund along with price deficit payment scheme and market intervention scheme.
CACP also stated that agricultural markets in the country face infrastructure deficiencies in mandis and issues like over-regulation, high statutory taxes and market charges.
“High market/mandi fee and other charges on sale or purchase of agricultural produce, which distort markets and drive out private trade,” it noted while recommending rationalisation of these mandi charges.
For transaction in mandis, states such as Gujarat and Bihar do not levy any fee, while charges range from 1% to 3% which excludes an rural development cess (2%) and a fixed arthia commission in Punjab and Haryana.
It should be done preferably through a uniform and transparent system, to promote free inter-State trade, strengthen competition and advance the objective of a national agricultural market.
“Infrastructure such as grain drying, cleaning facilities and laboratories for quality checking may be established near mandis,” the commission observed.