Relevance: GS-3: Major crop-cropping patterns in various parts of the country.

Key Phrases: oilseeds production, Edible oil, Aatmanirbhar, Stagnant Output, Seed Replacement Rate, Mechanization of the farm, Urbanisation, Per capita consumption, Per capita income, Acceptance of packaged foods.

Why in News?

• Even while the import-dependent edible oils market in India has been affected by geopolitical factors, the domestic production of oilseeds remains below the global average.
• In its report titled ‘Edible oil: India’s bid to reduce imports and become Aatmanirbhar’, CareEdge -- a knowledge-based analytical group that provides insights based on technology, data analytics, and detailed research methods – attributes the muted growth in domestic production to a restrained increase in the area under cultivation, coupled with a marginal improvement in crop yield over the past 10 years.

MAIN REASONS FOR THE STAGNANT OUTPUT:

• The area under cultivation remaining stagnant:
  • The area under cultivation increased from 26.3 lakh hectares in 2011-12 to 28.8 lakh hectares in 2020-21.
• Marginal improvement in crop yield:
  • The yield per hectare improved marginally from 1,193 kg per hectare to 1,254 kg per hectare during this period.
  • Consequently, total production increased from 29.8 million tonnes (mt) in 2011-12 to 36.1 mt in 2020-21, at a compounded annual growth rate (CAGR) of 1.94 percent.
  • On the other hand, global oilseeds production increased from 447 mt in 2011-12 to 607 mt in 2020-21, a CAGR of 2.9 percent, which is almost 1.5 times India’s growth.
• Low seed replacement rate:
  • SRR is defined as the percentage of area sown out of the total cropped area in the season by using certified/quality seeds other than the farm-saved seeds.
  • The SRR is directly related to productivity, as certified seeds are better in productivity.
  • On the seed replacement rate (SRR), only around 15 percent of India’s total cropped area is sown with freshly obtained quality seeds every year, while the rest is sown with farm-saved seeds.
  • However, this ratio varies from crop to crop. For oilseeds, it varies between 20 percent and 80 percent. Therefore, the achievement of optimal SRR is imperative for better yields.
• Low level of mechanization of farm activities:
  • Stressing the need for mechanization of farm activities, subdued growth of production (effectively low yield per hectare) can also be attributed to the low level of farm mechanization.
  • Although the farm mechanization rate in India has increased in the recent past, it is still far behind other countries such as China.
• Competition from other commercial crops, coupled with price volatility:
  • Some crops such as oil palm have a long gestation period and, therefore, restrict income flow for a minimum of four-five years.
  • This, coupled with fluctuation in the price of crude palm oil in the international market and competition from other economically viable crops such as rubber, areca nut, sugarcane, banana, and coconut, have contributed to low/ stagnant acreage.

Reasons for rising demand:

• The report attributed the increase in domestic edible oil consumption to an increase in population, urbanization; and per capita consumption.
• Population:
  • According to the estimates from the United Nations’ Population Division, India’s total population is expected to increase from 1.22 billion in 2011 to 1.55 billion by the Census 2031.
• Urbanisation:
  • The urban population ratio is also expected to increase from the present level of 31 percent to 40 percent by 2033-34.
  • As urbanization increases, dietary habits and traditional meal patterns are expected to shift towards processed foods that have a high vegetable oil content.
• Per capita consumption:
  • Although the per capita consumption of edible oil in India is low when compared to the global average, it is increasing at a CAGR of around 5 percent from 16.20 kg per annum in 2013-14 to 19.50 kg per annum in 2017-18.
• Per capita income:
  • The increase in income has contributed to a rise in the per capita consumption of edible oil, as the expenditure elasticity for vegetable oils is positive.
  • India’s per capita income (at constant price) has increased at a CAGR of around 4.5 percent per annum from ₹63,462 in 2011-12 to ₹94,270 in 2019-20.
  • However, it declined to ₹85,110 in 2020-21 due to the Covid-induced lockdown and consequent disruption in business activities.
• Behaviour change:
  • Apart from positive expenditure elasticity, an increase in urbanization, change in behaviour and increasing acceptance of packaged foods can also lead to an increase in the per capita consumption of edible oil in the near to-medium term.

Conclusion:

• It is desirable to increase domestic oilseeds production to reduce import dependency in an uncertain geopolitical environment amid the increasing de-globalization trend across the world, as huge reliance on imports could compromise the national interest in the long run.
• Therefore, it has become imperative for a country like India to become not only self-reliant but also self-sufficient to the extent possible, which is economically prudent, as well as strategically sensible.

Source: The Hindu BL

Mains Question:

Q. What are the reasons for stagnant oilseeds production in India? Suggest some measures to increase domestic oilseeds production to reduce import dependency.