Agri Business

No subsidy for coconut oil, duty-free for imported peers

Vinson Kurian | Updated on February 07, 2011 Published on February 07, 2011

Mr Mullakara Ratnakaran

The coconut farming segment of Kerala has been confronting multiple hazards for quite sometime now - right from the farm gate to the market, observes Mr M. Sukumara Pillai, Chairman of the Kerala Kerakarshaka Sahakarana Federation, or Kerafed, a cooperative of coconut farmers in the State, whose very nomenclature has been derived out of this ubiquitous palm presumably brimming at the top with tropical bounty.

According to Mr Pillai, a devout farmer with feet firmly footed on ground, the rising costs of cultivation and lack of remunerative prices are fast undermining the very survival of the golden palm - and with it coconut oil, one of its most important derivatives with huge market and social implications attached to it at least in the local context.


Kerafed was constituted with the purpose of safeguarding the interests and taking care of the grievances of the coconut farmers from to time. The current status of operations of the cooperative pertains mainly to procurement of copra (dried coconut) from the farmers or their authorised agencies and getting it converted to edible oil and ensuring sale of quality standard edible item to the consumers at a reasonable price.

In a communication to Prof K.V. Thomas, the Union Minister of State (Independent Charge) for Consumer Affairs, Food and Public Distribution, which the Chairman personally handed over to the former during a recent visit to Thiruvananthapuram, it has been stated that Kerafed is increasingly finding it difficult to position coconut oil in the market due to a combination of factors, none no more glaringly significant and patently disruptive as consumer resistance from the high prices – a derivative of the food price inflation spiral.

Added to this is the double-edged onslaught from predatory competition posed by palm oil and sunflower oil, which enjoy not just the cushion of a neat subsidy element granted by an ‘over-indulgent' Government at the Centre but also nil import duty, Mr Pillai said.

This is a luxury unjustifiably denied to coconut oil based on a curious but perverted ‘numbers' game – that compared the ‘many million' users of imported varieties of the edible oils as mentioned above against the ‘few lakhs' of coconut oil!


This is injustice, unadulterated at its worst, Mr Pillai says. Coconut oil has been the traditional mode of cooking oil used by Keralites over centuries, and this indigenous oil is naturally the most preferred oil of the largely consumerist State. Paying scant attention to the legitimate demands of the coconut farmers would, therefore, amount to pouring scorn over them. It would also be a massive snub and amount to a grand bias against the State and its population, which may not take kindly to any effort at imposition of any alien choice for a medium of cooking oil.

This is where the ‘numbers game' being played by vested interests would fail to make sense, Mr Pillai said.

Elaborating, he said the stated objective of the measure of protection granted to imported edible items is primarily meant to humour the consumer reeling under the deleterious aftermath of runaway prices in essential commodities. Here again, a quintessentially indigenous product such as coconut oil is virtually denied its due share, throwing up the larger question of equity in treatment with peer oils. In fact, the ‘number game, so dextrously played against users of coconut oil, could boomerang on its detractors if one were to calculate the subsidy implications – up to Rs 15 a kg for the imported oils used by ‘many millions'. “We would be happy even with Rs 10 as a subsidy for the few lakhs of consumers of coconut oil,” Mr Pillai says.


The contentious matter has in the past been brought to the good offices of successive Union Ministers but no meaningful response has been forthcoming. “Of course, we do appreciate the Union Government has been generous enough to provide minimum support price for copra as a relief measure, though inoperative in the present context of surging prices.”

Minimum support price benefits only the farmer, Mr Pillai reasoned, but at times such as these when essential prices are shooting up with no relent, it ceases to be of any relevance. “It is the customer who is the king for us locally here, if not for any reason other than his (crucial) choice of oil as a medium for cooking.” This is where the subsidy, confined as of now to imported oils alone and to the total disadvantage of coconut oil, can count a lot.

“Hence, our demand, grounded as it is at least on equity principles. We cannot continue to condone a situation where coconut oil continues to suffer injustice heaped on it due to the myopic views of certain administrators who have allowed themselves to be pawns in the hands of anti-coconut oil lobbies,” Mr Pillai said.


The denial of the price subsidy support enjoyed by imported items makes for a glaring anomaly generating avoidable distress, hardship and turmoil to consumers in Kerala. “We do feel that it is highly essential to tap the market potential of coconut oil with the dual objectives of fulfilling the basic interests of the coconut growers while keeping in mind the demands of rationality and fair price from consumers. Wider market intervention at the instance of the Union Government would be feasible and proper in the local context if indigenous coconut oil item is allowed to be routed through the outlets of the public distribution system on a par with other edible oils.”

This, Mr Pillai said, will also go a long way in boosting demand and making universally available enough stocks of coconut oil, helping the cause of both the farmer and the consumer.

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Published on February 07, 2011
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