Cabinet approves Rs 11,040-crore plan to increase edible oils output

The Union Cabinet on Wednesday approved the National Mission on Edible Oils - Oil Palm (NMEO-OP) with a financial outlay of Rs 11,040 crore to increase the production of edible oils in the country.
 
The new centrally sponsored scheme will have a special focus on the NorthEast region and the Andaman and Nicobar Islands.
 
"Due to the heavy dependence on imports for edible oils, it is important to make efforts for increasing the domestic production of edible oils in which increasing area and productivity of oil palm plays an important part," the government said in a release.
 
Out of the financial outlay of Rs 11,040 crore, Rs 8,844 crore will be the share of Centre and Rs 2,196 crore of states, including the viability gap funding.
 
The scheme proposes to cover an additional area of 6.5 lakh hectare for oil palm till 2025-26 and thereby reaching the target of 10 lakh hectares ultimately. The production of crude palm oil (CPO) is expected to go up to 11.20 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.
 
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"The scheme will immensely benefit the oil palm farmers, increase capital investment, create employment generation, shall reduce the import dependence and also increase the income of the farmers," the release said.
 
While oilseeds production increased from 275 lakh tonnes in 2014-15 to 365.65 lakh tonnes in 2020-21, there is huge potential in oil palm plantation and subsequently production of CPO, the government said. "For harnessing the potential of palm oil production, in the year 2020, an assessment has been made by the Indian institute of Oil Palm Research (IIOPR) for cultivation of oil palm which has given an assessment of around 28 lakh hectares."
 
Currently, only 3.70 lakh hectares of area is under oil palm cultivation. Oil palm produces 10 to 46 times more oil per hectare compared to other oilseed crops and has yield of around 4 tonnes oil per hectare. Thus, it has enormous potential for cultivation, the release said.
 
The government said it will give a price assurance to oil palm farmers for fresh fruit bunches, from which oil is extracted, in the form of viability price (VP). This will protect the farmers from fluctuations in international CPO prices.
 
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"The assurance to the farmers will be in the form of the viability gap funding and the industry will be mandated to pay 14.3 per cent of the CPO price which will eventually go up to 15.3 per cent...To give impetus to the NorthEast and Andaman, the government will additionally bear a cost of 2 per cent of the CPO price to ensure that the farmers are paid at par with the rest of India," it said.
 
The scheme also focuses on increasing the assistance of inputs/ interventions. "A substantial increase has been made for planting material for oil palm and this has increased from Rs 12,000 per hectare to  Rs 29,000 per hectare."
 
To address the issue of shortage of planting material in the country, the government said seed gardens will be provided assistance up to Rs 80 lakhs for 15 hectares across the country and Rs 1 crore for 15 hectares in NorthEast and Andaman regions.  
 
The scheme has a sunset clause of November 1, 2037.

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