There is a tremendous increase in the prices of edible oil, know how the government is dealing with this problem

Bhuvan Bhaskar

The fire in edible oil has been in the news for the past few weeks. Oil prices of all six categories have risen by 50 to 70 per cent over the past year. This rise in prices is not part of a normal commodity cycle. This is the biggest jump in the prices of all vegetable oils in the last 11 years.

Mustard oil has increased by 44% to Rs 171 in a year, soy oil and sunflower oil have also increased by 50-50% in a year. This increase in the price of oil started from last January itself and it has been increasing continuously for the last about 15-16 months to the current levels.

The special thing is that despite raising many concerns and holding meetings, the options of the government seem to be very limited, due to which the root of this increase in prices is the wide gap in the production and consumption of oilseeds in the country and oil in the international markets. They are trapped in the continuous increase in the price of

For the first, there is a need to make a planned effort by making a long-term strategy, while on the second reason, the government does not have much to do.

After the Green Revolution in the country, the country became self-sufficient in the matter of food grains, but pulses and oilseeds remained two such crops, in which dependence on import remained. Talking about oilseeds in the current context, their total production in the country in 2019-20 was 106.5 lakh tonnes, while the demand was 240 lakh tonnes.

That is, India had to import more than 130 lakh tonnes of oil to meet its domestic needs. The condition of edible oil prices as seen today could have been worse had India’s oil production not increased and demand declined during 2020-21.

In fact, in the last few years, the central government has laid special emphasis on increasing the area under both pulses and oilseeds. The success that the country has achieved in pulses can be considered a significant success of the Narendra Modi government and the solution to the current crisis in the oilseed sector can also be found with this success.

When the Modi government came in May 2014, there was a huge gap between the production and demand of pulses. But in the next year 2015-16, continuous drought conditions led to unprecedented shortage of pulses in the country. The price of pulses reached Rs 200 per kg and there was an outcry in the country. But the government started a solid long-term plan to solve the problem rather than just finding a quick solution for that situation.

The government started work on all three fronts – production, demand and regulatory for pulses. On one hand, the government increased the Minimum Support Price (MSP) to increase production, while on the other hand, additional coverage of pulses was given under the National Food Security Mission (NFSM) launched in 2016-17.

Not only this, the government, with the help of ICAR institutes and state agricultural universities, set up 150 seed centers, from which subsidies were given to produce quality seeds and then mini kits of those seeds were given to the farmers. In the year 2016-17, the government increased the MSP of individual pulses by 8-16%.

The government made massive preparations for the procurement of pulses under the Price Support Scheme (PSS). With Rs 10,000 crore of the Price Stabilization Fund (PSF), the government has set a target of creating a buffer stock of 20 lakh tonnes of pulses and government procurement of pulses in coordination with major pulse producing states such as Madhya Pradesh, Rajasthan, Maharashtra and Karnataka. multiplied manifold.

The increase in MSP and government procurement had the effect of increasing the production of pulses by 42% year-on-year in 2016-17, unprecedented for any crop category.

NAFED procured 8.7 lakh tonnes of pulses from farmers in 2016-17, the importance of which is to be understood, then understand that this purchase was equal to the total purchase of pulses made in the last 15 years. The next year in 2017-18, once again the MSP was increased by 7-10%.

Not only this, import and custom duty of pulses were also changed to encourage domestic production. As a result of these measures, production reached a record 25.4 million tonnes that year and government procurement more than doubled to two million tonnes from the previous year.

The production of pulses once again got a tremendous boost when the Narendra Modi government decided to give MSP 1.5 times the cost of crops for the 2018 Kharif season. The support price of moong rose by 25% and production by 22%. A similar effect was seen on the production of gram and other pulses. In the year 2018-19, once again the government procurement has doubled to reach 42 lakh tonnes.

In 2019-20, the government had set a target of producing 263 lakh tonnes of pulses. But now in just 5 years, the story of pulses has become that the government is sitting on a surplus of lakhs of tonnes and when the government announced to give 5 kg extra rice and wheat to 81 crore citizens covered under the National Food Security Act (NFSA). Along with that, provision was also made to provide pulses free of cost.

If the sharp increase in the price of edible oils is seen from this perspective, then is the government ready to convert this disaster into an opportunity? The roadmap adopted and its success in the case of pulses has put forward a ready-made formula. If needed, just implement it. Then perhaps in the next five years, oilseeds will also become the hallmark of another success of Indian agriculture.

(The author is a specialist in economic and agricultural matters)

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