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240 Economic Survey 2021-22

7.11 In view of the persistently high import of edible oil, increase in oil production has been
a priority for the Government. The Government is promoting the production and productivity
of oilseeds through the centrally sponsored scheme of National Food Security Mission:
Oilseeds (NFSM-Oilseeds) from 2018-19 onwards in all districts of India. Under this scheme,
interventions such as production of foundation and certified seed and distribution of certified
seeds and seed minikits of latest high yielding varieties are undertaken. Under the NFSM
(Oilseeds), Government of India has set up 36 oilseeds seed hubs during 2018-19 and 2019-20
with an objective to increase the availability of high yielding quality seed. For Kharif 2021, a
total of 9.25 lakh number of oilseed mini kits of high yielding varieties have been allocated for
distribution in all the major oilseed growing states. Also, Government has through MSP regime
been providing price signal for crop diversification towards production of oil seed (discussed
later in the chapter).

7.12 Further, in August, 2021, National Mission on Edible Oils - Oil Palm (NMEO-OP) has been
launched to augment the availability of edible oil in the country by harnessing area expansion
and through price incentives. Under the scheme, for the first time, Government will give a price
assurance to the oil palm farmers for the Fresh Fruit Bunches (FFBs). This will be known as
the Viability Price (VP) which will protect the farmers from the fluctuations of the international
crude palm oil (CPO) prices.

7.13 India has enormous potential for cultivation of oil palm and production of CPO. At present
only 3.70 lakh hectares 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 tons oil per ha. Given the
fact that that even today around 98 per cent of CPO is being imported (production and import
of palm oil are shown in Figure 9); the NMEO-OP may be considered a major initiative of the
Government. The scheme aims to cover an additional area of 6.5 lakh hectares for oil palm till
2025-26 and thereby reach the target of 10 lakh hectares ultimately. Also, the scheme targets
the production of CPO to go up to 11.20 lakh tonnes by 2025-26 and up to 28 lakh tonnes by
2029-30.

Figure 9: Production and Import of Palm Oil (Lakh Ton)

Source: Based on data of Agriculture Statistics at Glance, 2020 and DAFW.