India Plans to Go Big on Palm Oil
- India is betting big on expanding palm oil cultivation to reduce its dependence on imported vegetable oils.
- The plan to boost domestic palm oil production to 2.8 million tonnes by 2029-30 was announced by Agriculture & Farmers Welfare Minister Narendra Singh Tomar with an allocation of $1.48 billion.
- This is expected to make a dent in its import of palm oil which has averaged 8+ million tons per year based on data from Indexmundi.
India wants to reduce its dependence on imported vegetable oils. As one of the largest importers of vegetable oils, the country produces less than 2% of its requirements. The rest is imported from Indonesia and Malaysia.
The plan will support small farmers to expand areas under oil palm cultivation to 1 million hectares from the current 350,000 hectares. Loaded with fresh funding, the industry is going all out to realize the goal to the extent that Agriculture Minister S Niranjan Reddy has suggested that imported palm oil seedlings be given a reduced import rate as Indian nurseries do not have the facilities to meet the targeted expansion.
The main goals of this plan are to improve the livelihoods of the millions of small farmers in India through a cash crop that has benefited smallholders in Indonesia and Malaysia. Increased local production would also reduce the forex losses from imports but perhaps more importantly is the ability to control what Indian consumers pay at retail as local production would not be subjected to the price volatility at the global commodities markets.
Indian critics of palm oil do not see this push towards self reliance as important. Reaction to the plan to expand palm oil cultivation has been mostly negative. Websites like Conservation India carried an opinion by wildlife biologists Umesh Srinivasan and Nandini Velho warning of a threat to biodiversity in India.
Better known media opinions from Hindustan Times and Bloomberg Quint provided better informed coverage on the plan but let’s say for a moment that wildlife matters more to India than affordable cooking oils and a positive forex. What are the options for India?
There is an obvious need for India to address the shortfall of domestic production of oilseeds. Critics of India’s plan to expand palm oil cultivation especially those concerned with biodiversity should pay attention to the data.
The oil palm produces more edible oil per hectare than any other vegetable oil crop.
The annual demand for edible oil in India is of about 25 million tonnes of which the country had imported over 13 million tonnes in the 2019-20 (November-October) period. The bulk of the imports comprised palm oils, which reportedly accounted for 55 per cent of the shipments coming in. News18
If we focus only on palm oil, the current plan would only produce 3 million tons from 1 million hectares. The actual requirement of the Indian market for palm oil was recorded at 13.75 MT which means India would have to cultivate an additional 3 million hectares of oil palm in order to meet its consumer needs.
This all sounds horrible for biodiversity in India until one looks at the options.
Data crunching on global vegetable oil production by Our World in Data shows that if India were to grow traditional oilseeds to meet the needs of Indian consumers, it would have to cultivate over 12 million hectares of rapeseed or mustard. Sounds incredulous? Let’s take a look at data from India.
Data from the Ministry of Agriculture as published by the Soyabean Processors Association of India shows 6,856,270 hectares harvested under rapeseed/mustard with production at 9,123,640 MT. Groundnuts had a slightly higher productivity rate with 4,825,200 hectares producing 9,952,200 MT.
Based on this, if India were to pursue Atmanirbhar in cooking oils through either crop, the expansion would obliterate whatever biodiversity is left in India.
Biodiversity is important for sure but so is sustainable development. Indian conservationists need to take a reality pill. Other nations much richer than India are struggling to fulfil their pledges to protect biodiversity. In comparison to these wealthy countries in the Global North, palm oil producing countries in Indonesia and Malaysia can still lay claim to the successful protection of endemic wildlife like orangutans.
The facts have not been lost on the Solvent Extractors Association (SEA) of India which has launched a sustainability framework for Indian palm oil production under IPOS Indian Palm Oil Sustainability framework.
As for other exaggerated criticisms about palm oil, anyone who knows the industry well can refute those claims easily. The most recent study on India’s ambitions to produce more palm oil domestically proved that:
“Using a spatially explicit model, we show that at the national scale India appears to have viable options to satisfy its projected national demand for palm oil without compromising either its biodiversity or its food security.”
Media types reporting on India’s palm oil plans would do well to expand their research especially in these times when fighting climate change is paramount. The demonization of palm oil by using alarm calls on deforestation’s impact on climate sounds silly when India’s fossil fuel policies are a heavy contributor to global warming.
India’s ambitions to decarbonize with biofuels have been well documented. Its dependence on crops like sugarcane or beets with their existing wider cultivation has been blamed for its failure to meet targets. Palm oil producing countries on the other hand, especially Indonesia, have made great strides in decarbonizing through the use of palm-based biofuels.
Lessons on Palm Oil and its Dynamic Potential for India
The experience of its neighbours in Southeast Asia provide a wealth of knowledge for India. Thailand in particular is a great example of how India can use its palm oil ambitions to meet climate goals while supporting small farmers and reducing retail prices for consumers. This report by Somjai Nupueng, Peter Oosterveer and Arthur P. J. Mol provides a wealth of information for anyone that is concerned about palm oil expansion in India and its dynamic potential for India.
Jhum cultivation in Northeast India is becoming problematic as its negative environmental impacts outweigh the positives. Agroforestry with pineapples has been suggested as a twin solution for climate change and biodiversity. This is where lessons from small farmers in Indonesia and Malaysia will show that their oil palm farms offer an ideal set up to achieve both.
Published September 2021. CSPO Watch