SEA seeks increase in budgetary allocation for NMEO

The Solvent Extractors’ Association of India (SEA) has sought adequate financial support to the National Mission on Edible Oils (NMEO) to boost the oilseeds production and increase the availability of edible oils, and to reduce country’s dependence on import of edible oils.

SEA’s pre-Budget memorandum to the government said India is importing about 160 lakh tonnes (lt) of edible oils valued at over ₹1.4 lakh crore. The NMEO needs to be implemented with a minimum outlay of ₹25,000 crore for the next five years against the present ₹10,000 crore to sizeably reduce India’s dependence on imported edible oils to 25-30 per cent by 2029-30 from the current 65 per cent.

India needs to invest heavily on MSP support, farmer education, seeds, agri practices and machinery, soil, weather forecasting and storage, etc along with modernisation of processing industry, it said.

Refined oil

Urging the need to regulate the import of refined palm oil, the memorandum said the import increased from 6.90 lt in the oil year 2020-21 to over 21 lt in oil year 2023-24.

Mentioning that Indonesia and Malaysia have inverted duty structure and have imposed higher export duty on crude palm oil (CPO) and lower export duty on RBD palmolein (a finished product), it said these countries are pushing finished products in India which is detrimental to the interest of domestic refining industry.

To tackle this, the memorandum suggested the government to increase the duty difference between CPO and refined palmolein from the current 7.5 per cent to at least 15 per cent. This may be done by increasing RBD palmolein duty from 12.5 per cent to 20 per cent without any change in CPO duty. Overall imports into the country would not be affected and it will have no impact on edible oil inflation.

To help Indian farmers to receive remunerative price, the current duty on crude oil be raised from 5 per cent to 20 per cent, and refined oil be raised to 35 per cent gradually. These measures will support the domestic farmers and boost the overall production of oilseeds to reduce India’s import dependence to 15-20 per cent in the next 10 years.

Uniform duty

Seeking uniform import duty on all crude edible oils, the memorandum said crude ricebran oil and crude pomace olive oil are currently subjected to 35 per cent Basic Customs Duty (BCD), while CPO, crude soyabean oil and crude sunflower oil enjoy nil BCD. “We urge the Government to treat all the crude edible oils on par and subject them to the same Import Duty at all times. This will enable the industry to import the crude edible oils as would be commercially viable and as meet the market-demand of the consumers at large,” it said.

Soyabean

Highlighting the plight of soyabean farmers who are forced to sell at around ₹4250 a quintal, much lower than the MSP, the memorandum said the Union Agriculture Minister had previously announced that the Government would purchase the entire soyabean crop at MSP to support farmers. Of the 30 lt mandated for procurement under the MSP, only 6.5 lt have been purchased as of now. This delay in the market intervention operation discourages farmers, and they may shift to alternative crops in the next kharif season.

Terming this as critical issue, it said while the Government advocates for self-reliance, farmers are not even receiving the MSP for their produce and create buffer stock. A fund of ₹5,000 crore be earmarked for this purpose, it said.

Ricebran

Referring to the use of de-oiled ricebran in cattle and poultry feeds, it said the raw material ricebran is subjected to 5 per cent GST, while the finished product de-oiled ricebran (DORB) is subject to nil duty.

As physical appearance of both are very similar, some unscrupulous elements declare ricebran as DORB, causing an atmosphere of unhealthy competition. To check this malpractice, the memorandum sought 5 per cent GST on DORB.

All other types of oilmeals such as rapeseed, soyameal, etc., are having 5 per cent GST on sale. By correcting this anomaly, ricebran meal shall also be at same level.

Added to this, a larger quantity of ricebran will be available for the processing and can add 2-3 lt of ricebran oil in edible oil kitty and thereby reduce the import of edible oils, it said.

Though India has the potential to increase ricebran processing, it won’t be able to reach its potential due to poor prices of DORB. Ban on export of DORB restricts India to explore full potential of ricebran oil. There is an urgent need to lift the ban on DORB to increase production of ricebran oil to reduce import of edible oils.

Oilmeals

Mentioning that India exports rapeseed and soyabean meal, it said both face stiff competition in international markets. With a record soyabean and rapeseed crops, the country needs to export 20-25 lt of each to maintain crushing utilisation. However, current conditions make it difficult to export large quantities. The memorandum urged the Government to provide a 15 per cent RoDTEP (Remission of Duties and Taxes on Export Products) incentive for oilmeal exports to support this sector.

Referring to the increase in production of DDGS (dried distiller grain solids), the memorandum said it is estimated to be around 3 million tonnes (mt) and likely to reach 5 mt in a year, replacing the demand for soyabean meal and other oilmeals in cattle and poultry feeds. At present, soyameal is at ₹30 a kg and maize DDGS at ₹15 a kg.

As the production of DDGS increases in the long run, it will have adverse impact on domestic oilmeal demand. This may discourage farmers to grow oilseeds, it said.