>>> Edible oils import restrictions, remunerative returns to farmers to make India self reliant in oil seeds

In the past four decades since its inception, SOPA has not only emerged as the strongest voice of soybean farmers, processors but also has been instrumental in prompting the government to make several policy decisions in the interests of soy farmers and processors. The area under soybean farming has gone up from 30000 hectares to over 12 million hectares currently. During this period, exports grew from nothing to over Rs. 15000 crores. Currently, More than 10 million farmers benefit from soy cultivation. However, despite phenomenal successes on various fronts, the productivity of soybean in India is far below from expectations. By this time, soybean production in our country could have been at par with world averages but we are still struggling to reach that level. Why and how did we land ourselves in a situation where we have to depend on import to the extent of 65% of our edible oil requirement? I believe we lacked enabling policies with adequate support rather incentivising farmers for oilseeds cultivation and providing fillip to the domestic cultivation.

SOPA has been relentlessly working for reducing the quantum of edible oils imports in our country and has been giving a thrust on increase in production of domestic soybean and other oil seeds so as to make India self reliant in edible oils. In its series of letters to the Union government, time and again, SOPA has suggested ways to the government to curtail imports of edible oils, besides asking for a hike in import duty on crude soybean oil and sunflower oil to 45% and 50% respectively.

Being the chairman of the apex soybean processing body, I believe that unnecessary and unbridled imports of edible oils will drive India away from achieving self sufficiency in the oil seeds sector. However, quantitative restrictions on edible oils imports would not only be in the interest of farmers but would also help India move towards achieving self-sufficiency in the oil seeds sector. The restriction is necessary as hike in import duties has only been able to check the incremental imports. The reduction can only be made by applying quantitative restrictions and capping seasonal unwarranted imports.

In the last 25 years, edible oils imports have jumped 15 times. From 11.64 lakh tons in 1995-96, the imports of edible oils in our country have risen to 150 lakh tons in 20l9-20. During the same period, oil seed production has gained only marginally and production of oil seeds has increased from 221 lakh tons to 335 lakh tons. This stagnation is directly attributable to burgeoning imports, making India the single largest importers of edible oils in the world.

To bring down the huge import bills on edible oils which currently stand over Rs 80000 crores annually, the government needs to come up with incentives to encourage farmers to go for large-scale sowing in oil seeds within the country so that India can meet its domestic edible oils demands to a large extent from its domestically grown oil seeds. A remunerative return to farmers is the first thing needed to boost oil seed production. Unless the farmers take the same interest in oil seeds as they do in wheat and paddy, the task will remain far away from success.

Indian Standards for Sustainable Soy Productivity enhancement has been a major challenge and SOPA is working hard in this direction over the last many years, with the support from the Government of India and ICAR-IISR. I believe that good agricultural practices and sustainable agriculture will result in significant improvement in productivity. Sustainability in agriculture has become a global concern because of environmental safety and human health, among other things. SOPA and Solidaridad are working together for drafting and then implementing Indian Standards for Sustainable Soy (ISSS).

Another area of major concern for the soybean processing sector is falling soy meal production as well as its export. According to a recent report prepared by the SOPA, total production of Soybean Meal in the country has declined from 70.88 lakh tons last year to 60.87 lakh tons this year. Similarly, on the export front, India continues to fair badly more specifically because of the it’s higher prices of the soy meal in the international market. According to the latest SOPA report, the export of soybean meal from the country this year till September 2020 was recorded at merely 6.57 lakh tons as against 21.09 lakh tons last year.

The dip in soybean meal export is due to the higher Minimum Support Price (MSP) in the local market as it makes soy meal expensive in the international market as compared with other countries. Damage to the poultry and animal feed industry has also been a major factor for sharp decline in India’s soy meal’s export demand in the global market. In addition lower crop output and lack of clarity in announcing the rates under the RoDTEP Scheme are hurting export order bookings.

 Indian soy meals are normally expensive by over $100 per ton compared to our competitors because of the higher MSP. The 7 per cent incentive, provided under MEIS scheme over the FOB value of the shipment, helped the exporters offset the higher price in the international market to some extent but the Government has now scraped the MEIS incentive and replaced it with a new scheme whereby duties and taxes suffered on export products will be refunded to the exporters. However, rates of RoDTEP are still to be announced.

I would urge the government to announce the RoDTEP rates soon and fix it at 9% of FOB value of exports, so as to make soy meal’s export viable in the international market.

National Mission on Edible Oils which is under formation currently is a very welcome step in the right direction as it aims at increasing productivity on one hand and reducing the import of edible oils on the other. In order to arrest the ills plaguing the soybean processing industries, the Government of India must come up with a measured policy decision to make India near self-reliant in edible oils production.