The Hindu Business Line : `Keep out edible oil from free trade'

There should be no dilution in policy on keeping out edible oil and oil trade from the purview of free trade areas and preferential trade agreements, according to Mr R. Mansinghka, President, Central Organisation for Oil Industry & trade (COOIT).

Addressing the inaugural of the All India Convention of Oilseeds and Oil Trade and Industry here, he said the widening gap in demand and supply of oilseeds and edible oils necessitate imports but there has to be a bottom line to protect the livelihood of farmers.

Following COOIT's continuous representation the Union Agriculture Ministry has committed to keep edible oil and oilseeds outside the purview of such agreements. But this has to be monitored to ensure there is no deviation or dilution in the policy.

Oilseed output

Increased production can only come from productivity increases. While we are on the threshold of the 11th Five-Year Plan, oilseed production is yet to achieve the 9th Plan target of 30 million tonnes. Among the options to increase edible oil production would be encouraging oil palm cultivation which can be brought under the plantation sector to attract large enterprises. Vegetable oil production from non-conventional sources may be encouraged. Now the production is about 13 lakh tonnes, which is less than half the potential of about 27 lakh tonnes.

Biofuel

Significant changes are happening in the edible oil scenario with the EU and the US diverting oil for production of biodiesel. The EU is using rapeseed oil for biofuel and its production capacity is expected to increase to 6 million tonnes a year in 2007 from 4 million tonnes in 2005.

The US uses soya oil with estimates of about 1.3 million tonnes biofuel production in 2006-07. In Malaysia and Indonesia crude palm oil is used and their combined capacity is estimated at about 1.8 million tonnes. India cannot afford to divert edible oils but needs to consider alternatives. But all these will have significant impact on vegetable oil sector and we need to sensitise ourselves to the changes, he said.

Addressing the inaugural of the oilseeds and oil trade convention, Mr S.S. Palanimanickam, Union Minister of State for Finance, said that oilseed production has been stagnating at about 24.8 million tonnes. This is a cause for concern due to the dependence on imports. The Ministry has started the pre-budget meetings with the representatives of trade and industry. The oil trade should come forward with measures to improve the production.

The Tamil Nadu Minister for Food, Mr A.V. Velu, said that the trade should work with the farmers.