If India wants to produce as much edible oil as it is consuming through its traditionally-grown oilseeds, the country may need at least 30 million hectares of area for cultivating them and this is next impossible, said noted agricultural economist Ashok Gulati on Wednesday.
India currently meets 65 per cent of its edible oil needs through imports. Of India’s total edible oil imports, 75 per cent is palm oil. “Palm is the only tree that can give 4 tonnes oil per hectare. In comparison, other edible oil complexes do not give even 400 kg of oil per hectare,” said Gulati, Infosys Chair Professor at the Indian Council for Research on International Economic Relations (ICRIER) in New Delhi.
Among major traditional oilseed crops grown in India are soybean, groundnut, mustard and rapeseed and sesame. While the requirement for edible oil in India is more than 25 million tonnes annually, its production hovers around 10 million tonnes a year.
While India has 2 million hectares of area where palm can be grown, the total area under palm cultivation is around 50,000 hectares, Gulati said while participating in a webinar on the impact of COVID-19 on India’s agricultural economy organised by National Stock Exchange.
The problem with oil palm cultivation is that it needs long term commitment and long term investment. First six years, there would no returns on investment. Then up to 25 years, it starts giving yield, he said.
If that to happen, Indian corporates should get into growing oil palm as it is partly done in Indonesia. There both corporates and farmers are into palm cultivation. However, there is another problem. In India, oil palm is treated as horticulture crop, not as a plantation crop. If it is treated as plantation crop, it may attract corporate investment, said Prof. Gulati adding that he had submitted a plan involving ₹10,000 crore to the government some years ago on promoting palm cultivation.
Simon Wiebusch, Chief Operating Officer, Bayer Crop Science, who also participated in the webinar said, said there could be other ways to reduce the imports of edible oils, which include developing higher-yielding varieties of oilseeds, particularly of crops such as soybean. Monsanto, which Bayer acquired about two years ago, has been able to develop soybean varieties with higher yields through genetic engineering, even though Wiebusch didn’t spell this out.
Speaking at the webinar, D K Joshi, Chief Economist at CRISIL, said agriculture, which contributes around 15 per cent of GDP, does not have sufficient capacity to lift the country out of recession which COVID-19 situation has pushed it into, but it can provide a lot of relief as major Indian population still depend on it.