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The other oil bill

India's edible oil imports need not balloon forever

Business Standard Editorial Comment  |  New Delhi 

India's vegetable oil imports seem set to touch a new high of 12.3 million tonnes this year. This will raise import reliance for meeting edible oil requirement to a whopping 65 per cent. These imports have, in fact, been mounting steadily over the years as the growth in domestic oilseed output has failed to keep pace with rapidly ballooning demand for cooking oil. Sourcing of edible oils from abroad may not look burdensome today as international prices are low, thanks to a bumper global oilseed harvest - and, more importantly, lower diversion of vegetable oils to the biofuel sector because of low crude oil prices. But it may not remain so for long. Unsurprisingly, a sizeable part of India's installed oilseed crushing capacity is lying either idle or underutilised. Moreover, the country is forgoing valuable oilmeal (deoiled cake), a key by-product of oilseed crushing, which is a major item of agro-exports and is also fed to livestock to increase their milk yield.

Unlike some other heavily import-dependent commodities like petroleum products, which have limited potential for higher indigenous output unless new oilfields are discovered, the scope for stepping up the production of vegetable oilseeds is quite substantial. This is clear from the wide gap of over 30 per cent in the yield of oilseed crops at technology-demonstration farms and at farmers' fields. Besides, nearly 70 per cent of oilseeds are grown in unirrigated fields and without enough yield-enhancing inputs like improved seeds, fertilisers and plant protection chemicals. A large number of high-yielding crop varieties bred over the years, too, have failed to reach farmers as their seeds are not available in the market. If these issues are addressed, the country's oilseeds harvest could go up considerably without committing much additional land for cultivation.

Such a feat was, in fact, accomplished in the past, between the mid-1980s and the mid-1990s, when the country faced a similar situation of unsustainably high imports and near stagnation in domestic oilseeds output. The short-lived "yellow revolution" came about thanks to the Technology Mission on Oilseeds, set up in 1986, with full powers to dictate official policies and intervene in the edible oils market. The mission also facilitated induction of improved oilseeds production technologies, including new crop varieties. As a result, oilseeds output nearly doubled by the mid-1990s, obviating the need for vegetable oil imports. At least the technological aspect of the mission could be replicated today. The main constraint today is that staple cereals, like wheat and rice, enjoy a competitive edge, thanks to the marketing support by the government. This preferential policy must end. That, coupled with technology-supported high productivity, can spur farmers to raise the output of these crops and make the country self-sufficient in cooking oils.

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First Published: Wed, December 10 2014. 21:38 IST
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