The World Is Boycotting Palm Oil, But India Wants To Produce More Of It. Here’s Why

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Sriman Narayana, a farmer from Pothureddypalli village in Krishna district, decided to take up palm oil farming on his 2.6 ha farm after government officials painted a rosy picture of growing oil palm.

Four years later, the small farmer ended up uprooting close to 400 oil palm trees he had planted. “The plants would have started yielding in another two years. But I was not able to bear the expenses involved in their maintenance,” he says.

Narayana is not alone. The largest oil yielding crop in the world, the Indian government has been encouraging farmers to take up palm oil production across different states, but many small palm oil farmers, who constitute 70 percent of the country’s farming community, are regretting their decision of taking up its cultivation, as they accrue huge debts.

Golden Palm: The Journey So Far

With over 1.3 billion people, India remains both, the world’s largest consumer, as well as the biggest importer of palm oil.

Hiding in all essential commodities we use, palm oil is derived when bunches of fruit grown in plantations are pressed in refineries to yield a sweet, earthy oil.

With over 1.3 billion people, India remains both, the world’s largest consumer, as well as the biggest importer of palm oil. Being cheap and extremely versatile, its use remains fundamental to the country’s challenge of providing inexpensive edible oil to an increasing population, with limited agricultural land.

Since 2001, palm oil consumption in the country has increased from 3 million tonnes to nearly 10 million tonnes—a growth of over 230 per cent.

This tremendous growth, however, has come at a huge cost, with India importing palm oil from other countries. Understandably, India now wants to produce more of this oil at home, to reduce this spending.

The government had anticipated this growth in demand, as early as in the 1980s, and set up a committee to identify potential areas for growing the crop.  Having identified 2 million hectares of land, the government implemented the National Mission on Oilseeds and Oil Palm (NMOOP) under the 12th Five Year Plan (2012-17).

Under the mission, the government provides huge subsidies to farmers, that include covering up to 85 percent of seedling costs, and 50 percent of outlay on irrigation, chemical inputs, and processing units to 12 states. Every year, the 12 states under NMOOP set a target of bringing additional area under the crop.

And though the Mission received an initial enthusiasm, the targets have been routinely missed. In 2017-18, the Union government had to cough up US $6,774 million ( Rs 45,917 crore), the highest ever spent on importing palm oil.

Worried about the escalating import costs, in April 2017, the Indian government even decided to remove all land ceiling (of 25 hectares (ha)) for the cultivation of palm oil for subsidies and allowed corporations to enter into the venture by providing benefits of 100% FDI was under the National Mission on Oils and Oil Palm (NMOOP).

Since palm oil cultivation is not viable, unless it is grown on a large scale, the cabinet also made the provision that private entrepreneurs/cooperative bodies and joint ventures can use waste/degraded/cultivable land for oil palm production.

The Department of Oil Palm Research (DOPR) envisions one million ha under oil palm in its VISION 2030 document and intends to bring in new technologies, hybrids, facilities and subsidies, to motivate farmers to cultivate more oil palm.

Palm To Plate: Pros & Cons

With all the intervention, India still produces a “dismal” 0.08 million tonnes compared to Indonesia’s 22.2 million tonnes; and its productivity per ha is just 1.12 tonnes compared to Indonesia’s 3.87.

“As far as palm oil production is concerned, India hasn’t been able to achieve self-sufficiency and it is unlikely to also happen in the future,” says Kamal Seth, Country Head, India, RSPO.

Experts mainly give two reasons for this.  Many view India’s policy towards palm oil as  “a disastrous environmental exercise that will come at a very high expense”.

First, since the oil palm plant is not native to India, experts say India doesn’t have the required agro-climatic condition for a sustainable and valuable large oil palm cultivation programme.

“As in case of several plants and trees, while they can be grown in areas where the required growing conditions aren’t exactly met, the fruiting capability of the plants in those conditions is severely compromised. The same is true for Oil Palm. Temperatures above 34deg C result in abortion of male and female flowers and lead to poor crop setting. Cold temperatures (below 18C) during winter months of December and January and high wind-speed during monsoon will stress the palms and impact yields negatively. Looking at the agro-climatic conditions required for Oil Palm, there is no region in India which could be considered and classified as suitable for high yielding, rain-fed Oil Palm plantation development,”  Shyam Ponappa,  and Ranveer Chauhan, write in this academic paper.

The biggest problem with palm oil cultivation in India, however, is water, or a lack of it. By 2030, India is forecast to have only half of the water it needs. Each palm requires more than 250 litres per day for a good harvest, and many have been critical of India’s strategy of pushing for the cultivation of the most water-intensive crop in states where there is no water.

“Supporting this requirement will be unsustainable for India in the long term and will negatively impact the quality of life for populations in the regions that choose to grow irrigated Oil Palm. India’s own experience of close to 30 years of focused Oil Palm cultivation program offers enough evidence of the limitations that Oil Palm faces in Indian conditions,” the paper adds.

For the small farmers, there is also an added financial risk of the long cropping period and the low yields in growing conditions.

“Oil palm is not economical for small landholders and tenant farmers as there is practically no income in the first six years. Besides, it is susceptible to market and seasonal fluctuations,” says Subbarao, another farmer who spins a profit out of his cultivation, but acknowledges the problems small farmers face.

The Way Forward

A keyword missing in India’s palm oil policy is “sustainability”. Across the world, environmentalists have blamed palm oil for ecological destruction in countries like Indonesia and Malaysia, but in India, that conversation is a non-starter, and both growers and consumers largely remain ignorant of it.

In India, the Roundtable on Sustainable Palm Oil ( RSPO) has been trying to bring the focus on sustainability. “Only a few Indian companies joined the roundtable and the number of supply chain certificates issued remains low,” says a study published in the January 2018 issue of the Review of International Political Economy.

That is slowly changing, but what is required is faster, more concerted action. “ The RSPO is also starting to now work with small farmers on best practices, prescribed in the RSPO independent smallholders standard, if the farmers were to apply the best practices, over a period of time they would see the same acre of land would produce more, thereby improving incomes,” Kamal Seth, the Country Head, RSPO, told Youth Ki Awaaz.

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