Budget 2024: FM promises oilseeds mission to step up domestic production
The Narendra Modi government has reiterated its commitment to achieve self-sufficiency in oilseeds. Finance Minister Nirmala Sitharaman said the government is determined to roll out a National Mission for Oilseeds.
“To achieve self-sufficiency in pulses and oilseeds, we will strengthen their production, storage, and marketing. As announced in the interim budget, a strategy is being put in place to achieve ‘atmanirbharta’ for oilseeds such as mustard, groundnut, sesame, soybean, and sunflower,” she said.
The government targets increasing the acreage under oilseed crops to 30.45 million hectares in 2024-25 as against 26.60 million ha at present, and production of 20 million tonnes, including 10.9 mt from primary sources.
Rising incomes
With rising consumption of edible oils owing to increasing disposal incomes and changes in food habits, the requirement for imports continues to strain the exchequer. Though domestic production has improved, it is not enough to meet the supply gap.
Explaining the provisions of Finance Bill 2024, the government said the exemption of basic customs duty on oilseeds (along with seeds of other planting materials such as vegetable seeds) will be in vogue till March 31, 2026.
Welcoming the move, Ajay Jhunjhunwala, President of the Solvent Extractors’ Association of India, said the move would cover issues like production of high-yielding varieties, establishment of market linkages and value addition.
Disappointment
The association was, however, disappointed that the government did not increase import duties on edible oils or raise the duty difference between crude oils and refined oils to a minimum of 15 per cent.
The country is currently a net importer of edible oil, at 57 per cent, costing the exchequer $20.56 billion.
The government recognised oil palm as a key component in achieving self-sufficiency in the edible oil sector and launched Mission Palm Oil with a focus on the North-East.
The mission targets raising palm oil production to to 11.20 lakh tonnes by 2025-26. The scheme is being rolled out in 15 states.
To encourage farmers to grow oil palm, the government revised the viability price from ₹10,516 in October 2022 to ₹13,652 in November 2023.
P Chandrashekhara Reddy, Senior VP-Sales and Marketing (Gemini Edibles & Fats India Ltd), said the edible oil Industry firmly believed that increasing the production of these oil seeds at a faster pace would require an increase in the customs duty on imported edible oils. “This is important to motivate the farmer to switch from other crops to oilseed crops,” he said.
“We should also provide high-yielding seeds for a better output of oilseeds. It will be interesting to note how these concerns are addressed,” he said.
The country needs to take resolute decisions along with huge investments to bridge the gap between the demand and domestic production.