Solution to import dependence on vegetable oil does not lie in hiking MSP

Indian Express

4 hours ago

India's pulses and vegetable oil imports touched a record 7.3 million tonnes (mt) and 16.4 mt, valued at $5.5 billion and $17.3 billion respectively, in 2024-25. Some of that may have had to do with the strong El Niño-induced drought of 2023-24, whose effects on food inflation extended right up to December 2024. It forced large-scale imports — in the case of pulses, from an average of 2.6 million during 2018-19 to 2022-23 to 4.7 mt and 7.3 mt in the following two fiscals. But the same cannot be said about vegetable oil imports, which have more than doubled from 7.9 mt in 2013-14. It's quite possible that pulses imports will reduce considerably in the current fiscal, assuming a normal monsoon. But that's unlikely with vegetable oils, where rising imports have attained a structural inevitability similar to petroleum crude and natural gas.
In pulses, scientists have bred shorter-duration chana (chickpea) and photo-thermo insensitive moong (green gram) varieties, enabling farmers to grow these with minimal irrigation or in all four seasons. Much of the increased domestic pulses production after 2015-16, notwithstanding the setbacks of the last two years, has been courtesy of chana and moong. It has, then, limited the need for imports mainly to arhar (pigeon-pea) and urad (black gram): In a normal year, India can produce roughly 90 per cent of its consumption requirement. Such effort has been woefully lacking in oilseeds. Take soyabean, where the average per-hectare yield in India is hardly one tonne, compared to 2.6 tonnes in Argentina and 3.4-3.5 tonnes in Brazil and the US. Not allowing genetic modification in soyabean or mustard, with potential for raising yields, hasn't helped either. It's not surprising that the import dependence in vegetable oils is well over 60 per cent — and, at the current pace, set to rise further.
The solution does not lie in hiking minimum support prices (MSP). MSPs have no meaning unless accompanied by physical procurement as with rice and wheat. But even that has limitations. The latest MSP for soyabean, at Rs 5,328 per quintal or $615 per tonne, is way above the landed cost of $400-450 for the same from Brazil and the US. What the government can do is to assure oilseeds and pulses farmers of a minimum income support, while setting this at a reasonable level that incentivises them to grow and even expand acreages under these crops. But there is no substitute ultimately for increasing yields and reducing cultivation costs — which has unfortunately not happened in oilseeds, unlike with rice, wheat or sugarcane.