• According to Department of food and public distribution, India is one of the largest consumers of vegetable oils in the world.
• India currently imports vegetable oil amounting to 13-14 million tonnes and valued at over $14 billion to meet chronic domestic shortage.
• In the medium-to-long term, the country must move towards substantial self-reliance, but in the short-term import is inevitable.
• But the current import policy, while advancing consumer interest, has failed to protect the interests of domestic oilseed growers.
• In order to achieve its objectives, a policy that adopts a comprehensive approach and takes into account the interests of both growers and consumers is essential.
• Such comprehensive policy action is required because of looming risks including land constraints, water shortage and climate change.

Initiatives to Boost Domestic Oilseed Production in long term

• Boosting domestic oilseeds production is inevitable, for which effective policy measures are critical.
• There are Six initiatives to boost domestic production:
• Enforce area expansion through incentivised crop rotation in high-input grain mono-cropping regions of Punjab, Haryana and western Uttar Pradesh.
• Adopt multiple technologies including infotech, satellite tech, nuclear agri-tech and nanotech.
• Work towards a breakthrough in seed technology.
• Implement a robust nationwide procurement system.
• Tap the huge potential of non-conventional oil sources like cottonseed, rice-bran and tree-borne oilseeds.
• Invest in improving crushing/extraction efficiency.
• Each one of these is doable, and positive effects will be visible over time.
• But there is also need for some ‘quick wins’ for which six policy actions are recommended.

Policy Actions for short term

• Regulate and monitor imports of vegetable oil:
• Currently, the policy interventions are often knee-jerk and reactive, and bereft of supportive data.
• Adopt simple administrative system of ‘Import Contract Registration’ and monitoring of arrivals
• It will remove the opacity in trade and facilitate data-driven decision.
• Cut down credit period to overseas suppliers to 45 days maximum:
• Long credit period of 90-120-150 days encourages over-trading and speculation.
• Some Indian importers are already in a serious ‘import debt trap’ because of rampant over-trading.
• Bank loans to importers can turn into NPA anytime.
• By Reducing credit period will automatically slow the pace of import and make the importer more responsible and accountable.
• Bring cooking oil under Public Distribution (PDS):
• Aim: To support vulnerable sections of consumers with supply of edible oil under welfare programmes at subsidised rates.
• Both PDS and private trade supplies can co-exist to provide help advance consumer interest.
• The PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
• Allow oilseed import for partial replacement of vegoil import:
• Import of oilseeds will boost utilisation of domestic idle processing capacity, augmented edible oil availability and, importantly, will provide more cake/meal for the domestic livestock sector or for export.
• Create an Oilseeds Processing Industry Modernisation Fund:
• Many of the 15,000 oilseed crushing units and 800 solvent extraction plants are intrinsically inefficient in terms of scale, equipment, technology and productivity.
• A modernised industry will capture greater value and create potential to attract foreign direct investment.
• Backward integration:
• Large processing unit’s dependent on import must establish backward linkages to produce oilseeds by working with FPOs.

Much bet is being laid on oil palm cultivation, but history shows nothing remarkable has happened in the last 30 years. While the new oil palm initiative is welcome, a comprehensive review of the promotion policy is needed for sustained growth. policymakers must demonstrate strong ‘political will’ to creatively disrupt the debilitating status quo. The oilseeds sector deserves policy, investment and research support.