Govt plans to double edible oil production by 2022 to cut import dependence

Sustained increase in consumption against stagnating production widened India's import dependence to 67% for 2016-17

The central government has prepared a five-year schedule to double India's edible oil production and reduce import dependence, through expansion in sowing area and yield.

At a recent rabi conference, the ministry of agriculture revealed the plan to take annual production to 13.69 million tonnes (mt) by 2022, as against the current 7.31 mt. 

Several such roadmaps were drawn in the past, too, but the momentum did not continue. Sustained increase in consumption against stagnating production widened India's import dependence to 67 per cent for 2016-17, with an estimated demand of 24.5 mt. 

"Despite notable performance in domestic production of the nine annual crops (compound annual growth rate of 3.89 per cent), it could not match the galloping rate of per capita demand (around six per cent) due to enhanced per capita consumption (19 kg edible oil per annum), driven by increase in population and enhanced per capita income. The production of nine annual oilseed crops (primary source) has been targeted at 45.64 mt, from which availability of vegetable oils would be about 13.69 mt by 2022," said a senior official from the ministry. 

Total vegetable oil import was around 14 mt, worth Rs 730 billion, during oil year (October 1 to September 30) 2016-17. This was 67 per cent of the 24.5-mt consumption.

Annual cultivation was on about 26.7 million hectares, around 70 per cent of which was rain-fed. The area has seen a deceleration in general due to relatively lower profitability as against competing crops like maize, cotton or chickpea.

Total vegetable oil requirement by 2022 is estimated at 33.2 mt, assuming per capita consumption of about 22 kg per person a year, from 19 kg during 2015-16. Of the increased consumption, the government aims to meet half from domestic sources. 

"This is possible through horizontal and vertical growth in production to achieve doubling of farmers' income by 2022. This means the area under oilseed production and yield should go up through changes in farm practices, including advanced seeds and farm mechanisation. Castor farmers have already shown their ability to double their income, using intercropping with groundnut," says B V Mehta, executive director, the Solvent Extractors' Association. 

To achieve this, the government has proposed certain measures, besides incentives to farmers under various agricultural missions.

Considering an increased availability of vegetable oil from secondary sources, viz coconut, cottonseed, rice bran and others of forest origin, to 5.22 mt by 2022, from 3.58 mt now, total availability from domestic sources is estimated at 17 mt by then. 

With this, India's import dependence is set to decline by 15 per cent by 2022, from the existing 67 per cent, and the import burden of Rs 150 billion is also set to decline in the coming four years.