SOPA seeks 10% increase in edible oil import duty to support farmers

The Soybean Processors' Association of India (SOPA) has urged the government to increase import duty on edible oils by at least 10 per cent to protect farmers from sluggish domestic prices that have discouraged cultivation.

In a representation to Agriculture Minister Shivraj Singh Chouhan, SOPA Chairman Davish Jain said cheaper imports and depressed domestic oilseed prices have led farmers to reduce or abandon oilseed cultivation.

"We earnestly request your kind intervention to revisit the customs duty structure on imported edible oils and increase the duty by at least 10 per cent at the earliest," Jain said, adding that such a measure will go a long way in restoring farmers' confidence, incentivising greater oilseed production, and reinforcing India's journey towards self-sufficiency.

The appeal comes as the area under soybean cultivation has declined by over 5 per cent this year, with farmers disheartened by poor price realisation.

Throughout the current marketing year, soybean prices have remained consistently below the minimum support price (MSP), compelling the government to step in with procurement operations.

In May, the government reduced import duty on crude edible oils, including crude soybean oil, from 20 per cent to 10 per cent to encourage domestic refining and control food inflation. However, the duty on refined edible oils was kept unchanged at 35.75 per cent.

According to SOPA, even after government procurement, stocks had to be liquidated at a loss. Based on the current crop situation, there is a high probability that the government may once again be required to procure soybeans, involving an expenditure of more than Rs 5,000 crore.

"It is pertinent to highlight that edible oils are currently not contributing to inflation, and prices of soybean oil remain low. While the interests of consumers are important, there must be a balance -- consumers should be willing to pay a fair price to enable higher oilseed production and reduce our import dependence," the association said.

SOPA argued that the long-standing policy of permitting imports at nil or very low duties has "inflicted serious damage on the oilseed economy of the country".

"It is now urgent and necessary to correct this imbalance by adopting a policy framework that both protects consumers' interests and ensures fair and remunerative returns to farmers. Raising customs duties on imported edible oils is a critical step in this direction," according to the representation.