New Delhi: Prime Minister Shri Narendra Modi chaired a Union Cabinet where he approved the launch of a new Mission on Oil palm to be known as the National Mission on Edible Oils – Oil Palm (NMEO-OP) as a new Centrally Sponsored Scheme with a special focus on the Northeast region and the Andaman and Nicobar Islands. 

Under this scheme, it is proposed to cover an additional area of 6.5 lakh hectares (ha.) for oil palm till the year 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.

A financial outlay of Rs.11,040 crore has been made for the scheme, out of which Rs.8,844 crore is the Government of India share and Rs.2,196 crore is State share and this includes the viability gap funding also.

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 oilseeds production has increased from 275 lakh tons in 2014-15 to 365.65 lakh tons in 2020-21.  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 the cultivation of oil palm which has given an assessment of around 28 lakh ha showing huge potential in oil palm plantation and subsequently the production of Crude Palm Oil (CPO). At present only 3.70 lakh hectares are under Oil Palm cultivation. Oil palm produces 10 to 46 times more oil per hectare compared to other oilseed crops and has a yield of around 4 tons of oil per ha. Thus, it has enormous potential for cultivation.

Around 98% of CPO is being imported at present, and the launched Scheme will further increase the area and production of CPO in the country.  The proposed scheme will subsume the current National Food Security Mission-Oil Palm programme.

The scheme will focus specifically on the oil palm farmers producing Fresh Fruit Bunches (FFBs) from which oil is extracted by the industry, whose prices are linked to the international CPO prices fluctuations which will have a price assurance from the Government of India, known as Viability Price (VP).   This shall protect the farmers from the fluctuations of the international CPO  prices and volatility and increase the production of palm oil.

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% of the CPO price which will eventually go up to 15.3%.  However, to give impetus to the North-East and Andaman, the Government will additionally bear a cost of 2% of the CPO price to ensure that the farmers are paid at par with the rest of India.  The states who adopt the mechanism proposed by the Government of India would benefit from the viability gap payment proposed in the scheme and for this, they will enter into MoUs with the Central Government.

The second major focus of the scheme is to substantially increase the assistance of inputs/interventions for oil palm and this has increased from Rs 12,000 per ha to  Rs.29000 per ha. A further substantial increase has been made for maintenance and inter-cropping interventions. Special assistance @ Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.

To address the issue of shortage of planting material in the country, seed gardens will be provided assistance up to Rs.80 lakhs for 15 ha. in the Rest of India and Rs.100 lakhs for 15 ha in North-East and Andaman regions, followed by the assistance for seed gardens @ Rs.40 lakhs and Rs.50 lakhs for Rest of India and North-East & Andaman regions respectively.

Further Special assistance will be provided for the North-East and the Andaman regions in which special provisions are being made for half-moon terrace cultivation, bio fencing, and land clearance along with integrated farming.   For capital assistance to the industry, for the North East states and Andamans, a provision of Rs 5 core of 5 mt/hr unit with pro-rata increase for higher capacity.

This will attract the industry to these regions, hence increasing the farmers to produce oil palms domestically as edible oils at a higher speed to meet the heavy import dependence.