Issues around Oilseed Production in India

Despite of increased output and productivity, there is a demand –supply gap in the oilseeds in India, particularly in Edible oils. Currently, India is world’s largest importer of edible oil. The demand supply gap is such huge that India has 60-65% import dependency in case of edible oils. Between October 2013 and November 2014, India imported around 11.8 million tonnes of edible oil. Import dependency worsens during the unfavourable monsoon years.

The reason is clear that domestic demand for vegetable oils and fats has been rising rapidly at the rate of 6% per year but domestic output has been increasing at just about 2 per cent per annum. In India, the average yields of most oilseeds are extremely low as compared to those other countries of the world. The cultivation of oilseeds in India is in high risk regions where there are uncertain returns on the investments.

Issues in Oilseed Production

The policy impetus to oilseed production in India came for the first time in 1986 when the government launched Technology Mission on Oilseed. This was a golden period for oilseed production in India when productivity jumped from 670 kg per hectare in the eighties to 835 kg per hectare in the nineties. However, after that there has been a slow pace of growth. Today, the major problem in oil seeds production is low productivity. India is way behind the developed countries and neighbouring countries like China in its productivity of oil seeds per hectare. Since the increase in production could not keep pace with increased demand, India became more and more dependent on edible oil imports. One of the biggest constraints to raising oilseed output has been that production is largely in rain-fed areas. Only one fourth of the oilseed producing area in the country remains under the irrigation.

Measures to improve Oilseed Production

Key measures to improve oilseeds production include

• Bringing additional oilseed areas under irrigation
• Promotion of modern crop technology and better dry farming
• Promoting oil palm cultivation.
• Further, there is a need to enlarge the scope of research, technology diffusion and institutional intervention to re-energize the oil sector. This would include increase public research spending in oilseed crops for development of biotic and abiotic stress tolerant varieties.
• Strengthen the oilseed crop seed chain, particularly in groundnut to match the variety specific demand for higher yield.
• Provide incentives to private sector participation in processing and value addition in oilseed crops. Also, constraints for low capacity utilization should be addressed.
• Ensure availability of key physical (fertilizers, pesticides), financial (credit facilities, crop insurance) and technical inputs (extension services) in major crop ecological zones for oilseed crops.
• Implement market reforms and policies, such as contract farming and public-private partnership in production and processing, to ensure a competitive market for oilseeds and edible oil along with adequate protective measures to avoid unfair competition from the international markets.