Oilseed prices fall below MSP;farmers may shift to other crops

Edible oil industry body SEA fears that farmers may shift from oilseed cultivation to some other crops as domestic prices have crashed to five-year low.
The association demanded that the government raise import duty on edible oil and boost procurement to check sliding domestic prices and protect interest of farmers as well as processors.
Soyabean, groundnut and sunflower are grown in kharif (July-October) season. The sowing operation has started with onset of monsoon, which is projected to be normal this year.
In a letter to its members, Solvent Extractors' Association (SEA) President Atul Chaturvedi said prices of soyabean, mustard and groundnut have fallen below the minimum support price (MSP).

He demanded that import duty on crude edible oil be raised to 20 per cent and refined oil to 35 per cent.
"After two years of drought, the current year has witnessed oilseed production rebounding. However, the increase in production has not brought any cheer to our farmers as prices have collapsed below the MSP levels," Chaturvedi said in the letter.

"Probably, for the first time in decades, soyabean, rapeseed and groundnut have moved below MSP. Current price level is the lowest in the last five years and farmers are discouraged to sow oilseeds in kharif season," he said.
To ensure that farmers do not loose their interest in oilseed cultivation, he said the association wants hike in import duty as a short-term measure to support the price.

"Currently, oilseeds are being sold below MSP and there is hardly any Market Intervention Operation (MIO) to support these price levels. While we appreciate the government's decision to raise the MSP to support farmers, there is an urgent need to strengthen procurement system, otherwise it will not benefit farmers," Chaturvedi said.
He said the government has increased the MSP substantially to cool down farmers' agitation in various states.
The MSP of soyabean, a major crop in Madhya Pradesh, has been raised by Rs 275 per quintal to Rs 3,050 per quintal.
Groundnut-in-shell and sunflower seed MSPs have been raised by Rs 230 and Rs 150 per quintal respectively. Their support prices now stand at Rs 4,450 per quintal and Rs 4,100 per quintal.

Nigerseed MSP has been increased to Rs 4,050 from Rs 3,825 per quintal and sesamum MSP to Rs 5,300 from Rs 5,000 per quintal.
Chaturvedi also raised concern over 30 per cent rise in import of edible oil during last month despite bumper oilseed production in the country.
"Import of edible oil during May 2017 jumped by 30 per cent compared to May 2016 and overall import for November 2016 to May 2017 is more or less the same for the last year. On one hand we had a record oilseed crop and on the other hand we are forced to import larger quantity of vegetable oils," he said.

Chaturvedi said while farmers are reluctant to sell the produce below MSP, industry is unable to pay them higher price due to large-scale import of edible oil at lower duty and disparity in processing.
"Government must regulate inflow of refined edible oil import through tariff measures to enable market forces to pay a remunerative price to farmers," he said.
India imports more than half of its vegetable oil requirement. At present, the import duty on crude palm oil and crude soft oil is 7.5 per cent and 12.5 per cent respectively, while duty on refined palmolein is 15 per cent and 20 per cent on other refined oils.