Issues Associated with the Oil Palm Promotion – Explained, Pointwise

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Recently, the government announced National Mission on Edible Oils- Oil Palm. This mission, with a total outlay of Rs. 11000 crores, aims at making the country self-sufficient, by boosting the production of domestic oil palm. The mission plans to raise oil palm cultivation to one million hectares by 2025-26 and 1.7-1.8 million hectares by 2029-30. However, there are many ecological and viability-related issues that may act as hurdles in achieving the objectives of the mission.

About National Mission on Edible Oils- Oil Palm
  • It is a Centrally Sponsored Scheme. It aims to increase the domestic area and productivity of oilseeds and Oil Palm. Likewise, it will reduce India’s dependence on oil imports.
  • The mission has a special focus on the North-eastern region and the Andaman and Nicobar Islands.
  • Target: The mission hopes to increase the area under oil palm by an additional 6.5 lakh hectares by 2025-26. It also has a target to increase the production of crude palm oil to 11.2 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.
Read moreNational Mission on Edible Oils – Oil Palm
Need of National Mission on Edible Oils- Oil Palm

India consumes 10% of the total global production of palm oil, however, it is still a net importer of palm oil. India produces less than 0.7 million tonnes of palm oil annually. Since domestic production is not sufficient to meet the demand, India imports around 9 million tonnes of palm oil annually.

Most palm oil imports in India originate from Indonesia, Malaysia, and Thailand, accounting for over 90% of total imported volumes in 2019 and 2020.

Demand for palm oil is driven by high consumption due to its various usage in the food industry in India. It is a raw material for the Indian bakery industry, which is projected to reach $12 billion by 2024.

According to FAO’s State of Food Security And Nutrition in the World report, 194.4 million people are still undernourished in India and palm oil provides a cheap solution to address the issue.

Significance of the mission 
  • Food security and nutrition: Global production and demand for palm oil are increasing rapidly. The cultivation of palm oil is more advantageous than other vegetable crops like soy, sunflower, and mustard, with 4-10 times the output per unit of land. This makes its cultivation critical to global food security and nutrition.
  • Low prices and neutral taste: which enhances oil accessibility to people below poverty lines.
  • Versatile nature: it can be easily blended with mustard, coconut, groundnut, and sesame, oil which are locally produced and traditionally used vegetable oils in Indian cooking.
  • Land availability: Land identified for oil palm plantations in northeastern States is already cleared for cultivation.
  • Suitable climatic condition: apart from land availability, the region possesses climatic conditions suitable for palm oil cultivation.
Previous attempts to boost oil palm production
  • OPAE: The Government of India had also supported a Special Program on Oil Palm Area Expansion (OPAE) under RKVY during the year 2011-12 with an objective to bring 60,000 hectares under Oil Palm cultivation.
  • NMOOP: The National Mission on Oilseeds and Oil Palm (NMOOP) was launched during the 12th plan, in which Mini Mission-II (MM-II) was dedicated to oil palm area expansion and productivity increase. It is being implemented in 13 states which include Andhra Pradesh, Assam, Arunachal Pradesh, Chhattisgarh, Gujarat, Karnataka, Kerala, Mizoram, Nagaland, Odisha, Tamil Nadu, Telangana, and Goa.
Read morePrevious schemes for palm oil
Why Previous attempts failed?
  • Long gestation period and high level of investments– A palm is a monoculture crop with a long gestation period. This makes it more suitable for corporates and not for small farmers.
  • Small landholding–  Indian farmers generally have very small farm holdings which make investment difficult.
  • Lack of private investment– corporate sector investments in oil palm are limited compared with Malaysia and Indonesia.
What are the issues associated with the mission?

Some members of civil society and activists have raised concerns about introducing oil palm in biodiverse regions such as Northeast states, Andaman & Nicobar Islands.

  1. Destruction of rainforests and native biodiversity- The focus areas of the mission are biodiversity hotspots and ecologically fragile. Oil palm plantations would denude forest cover and destroy the habitat of endangered wildlife, as witnessed in Southeast Asia.
  2. Impact on community ownership of tribal lands– the mission does not focus on community ownership of land in these regions. Thus, it may detach tribal from their identity linked with the community ownership of land.
  3. Water stress– oil palm is a water-guzzling crop, which requires 300 liters of water per tree per day. Thus, it can lead to water stress in the region.
  4. Invasive species– The palm is an invasive species. It’s not a natural forest product of northeastern India. Thus, its impact on biodiversity as well as on soil conditions has to be analyzed.
  5. Past experience: Andaman and Nicobar Islands have some prior experiences in palm oil plantations. A 1,593-hectare area on Little Andaman used to be cultivated. However, it was abandoned on the instructions of the Supreme Court, as much of the lands were protected or reserve forests.
  6. Examples of foreign countries: Sri Lanka, with similarly suitable climatic conditions, has stopped palm oil plantations because it became an invasive species, threatening native plants and animals. Furthermore, it dried up local streams.

The oil palm crop is probably better suited for states such as Andhra Pradesh, Tamil Nadu, Karnataka, and Odisha. There, it can replace paddy and be grown using drip irrigation, mulching, and other water-saving practices. India is anyway producing too much rice, and any diversification must be welcomed.

Furthermore, If similar subsidies and support are extended to oilseeds that are indigenous to India and suited for dryland agriculture, they can help achieve self-reliance without dependence on oil palm.

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