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Edible Oil Production in India

2024 MAR 17

Mains   > Agriculture   >   Crops   >   Supply Chain Management


GS 3 > Agriculture   >  Crops   >   Supply Chain Management


  • The Prime Minister recently inaugurated India's first oil palm processing unit under the National Mission for Edible Oils—Oil Palm (NMEO-OP) in Arunachal Pradesh. 

National Mission for Edible Oils - Oil Palm (NMEO-OP):

  • The Government of India launched the National Mission for Edible Oils - Oil Palm (NMEO-OP) in August 2021. 
  • The mission is committed to escalating oil palm cultivation and elevating Crude Palm Oil production to 11.20 lakh tonnes by 2025-26. The scheme is presently operational in 15 states nationwide, covering a potential area of 21.75 lakh hectares.
  • The centrally sponsored scheme is specially focused on the North East region and the Andaman and Nicobar Islands to leverage their suitable climatic conditions for oil palm cultivation.
  • Andhra Pradesh, Telangana and Kerala are major Oil palm growing States and account 98% of total production. Recently Arunachal Pradesh, Assam, Manipur and Nagaland have also initiated Oil palm plantation program on large scale.


  • As per the latest data (March 2024) from the Ministry of Agriculture and Farmers Welfare, India imports 57% of its edible oil, causing a $20.56 billion drain on FOREX. It emphasizes the need for self-sufficiency in edible oil production to mitigate this impact.
  • Palm oil accounted for the lion’s share of the total imports (62 per cent), followed by soya oil and sunflower oil (21 per cent and 16 per cent, respectively).
  • The palm oil is primarily sourced from Indonesia and Malaysia (54% of total palm oil imports)soya oil from Argentina and Brazil, whereas Ukraine and Argentina are the major suppliers of sunflower oils to India.


  • Soybean, rapeseed & mustard, groundnut, sunflower, safflower & niger are the primary sources.
  • While oil palm, coconut, rice bran, cotton seeds & tree-borne oilseeds are the secondary sources of production of edible oil in India.
  • Out of total edible oils produced in the country around 68% is from primary sources and remaining 32% from secondary sources.


  • With its rich agro-ecological diversity, India is ideally suited for growing all the major annual oilseed crops.
  • Among the nine oilseed crops grown in the countryseven are of edible oils (soybean, groundnut, rapeseed-mustard, sunflower, sesame, safflower and niger) and two are of non-edible oils (castor and linseed).
  • Major oilseed producing areas are the Malwa plateau, Marathwara, Gujarat, dry areas of Rajasthan, Telangana and Rayalseema regions of Andhra Pradesh.


  • Productivity (yield) gap
    • There exists a productivity (yield) gap in edible oil cultivation due to the traditional farming practices followed and lack of adoption of new farm technologies in the sector.
    • The productivity (yield) gap between improved technology and farmers’ practices ranged from 21 % in sesame to 149 % in sunflower
  • Rain-fed conditions
    • Oilseed crops are largely grown under rain-fed condition (>70%) and are more prone to the vagaries of monsoon along with other biotic and a-biotic stresses including water stress during various stages of growth.
  • High seed cost
    • High seed rate (number of seeds (Kg) to be used per hector or acre for maximum yield) and cost of seeds coupled with non-availability of quality seeds of varieties and hybrids.
  • Higher emphasis on the field grains:
    • Due to the higher emphasis on the field grains like wheat, rice, pulses  etc, crops for oil production are generally grown in marginal and sub marginal areas where the fertility of the land is low for the raising of other crops.
  • Long gestation period:
    • The cultivation of oil seed farms such as palm has long gestation period of about 3-7 years before the cultivators could actually begin to derive benefit from thereof.
  • Small and marginal farmers:
    • Oil seed crops in India are mainly cultivated by small and marginal farmers and they are still not well adapted to new farm technologies.
    • Also they don’t have capital to invest in inputs like seeds, fertilizer, irrigation facilities etc. Thus it results in low productivity.
  • Absence or minimal technological breakthrough:
    • There is absence or minimal technological breakthroughs like high yielding variety crops, genetically modified crops in case of oilseeds and oil palms.
  • Reduction in cultivated area:
    • There is reduction in area under cultivation as the profitability of oilseeds is lower than the competing crops like cotton, maize and chickpea.
  • Minimum Support Price (MSP) for oilseeds:
    • MSP for oilseeds are lower than crops like wheat and rice, which demotivates the farmers to cultivate oilseeds over the highly remunerative crops. Also there is proper procurement arrangement for wheat and rice and not for pulses and oilseeds.
  • Impact of international prices:
    • As the country has to depend heavily on imports to meet the gap between demand and supply, the international prices have an impact on domestic prices of edible oils and thereby on the domestic producers.
  • Frequent changes in tariff rates:
    • The government has altered the tariff rates very frequently in the recent past depending on the demand-supply situation and domestic prices to regulate the imports and to protect the interest of the consumers. This resulted in price volatility in edible oils in India which is detrimental to the growth of the domestic edible oil sector.
  • Low efficiency of extraction:
    • Due to low efficiency of oil extraction units or expellers the total amount of oils cannot be extracted.
  • Lack of post-harvest technology and facilities :
    • There is lack of suitable post-harvest technology to prevent post-harvest losses and lack of proper storage, grading and marketing facilities to avoid deterioration of quality.

Challenges associated with palm oil cultivation:

  • Geographical barriers: Ideal location of palm oil trees are 8 degree latitude north and south of the equator. Therefore, India’s geographical position is not ideal for oil palm cultivation
  • Long gestation period: Oil palm has a long gestation period and restricts income flow to farmers for at least 4-5 years.
  • Threat to biodiversity: Studies on agrarian change in Southeast Asia have shown that increasing oil palm plantations is a major reason for the region’s declining biodiversity.
  • Small landholding: Indian farmers generally have very small farm holdings which make investment in palm cultivation difficult.
  • Farmers becomes more vulnerable to global price shocks: Shifting to palm oil cultivation in India could increase vulnerability to global price shocks, as seen in Southeast Asia where households dependent on palm oil face challenges without state intervention. This move may expose local communities to external factors, questioning its sustainability.


  • National Mission on Edible Oil-Oil Palm (NMEO-OP).
  • Technology Mission on Oilseeds & Pulses (TMOP): In view of the importance and significance of oil palm cultivation, DAC&FW had taken up Technology Mission on Oilseeds & Pulses (TMOP) in 1991-92 in the potential states.
  • Oil Palm Development Programme (OPDP): A comprehensive centrally sponsored scheme, Oil Palm Development Programme (OPDP) was taken up during VIII and IX Plan.
  • Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM): During X and XI Plan, Government of India provided support for oil palm cultivation under Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM).
  • Special Programme on Oil Palm Area Expansion (OPAE) under RKVY: It aims to bring 60,000 ha area under Oil Palm cultivation, which continued till March, 2014.
  • National Mission on Oilseeds and Oil Palm (NMOOP): During the XII Plan, National Mission on Oilseeds and Oil Palm (NMOOP) has been launched >> which is dedicated to oil palm area expansion and productivity increases. In 2018, NMOOP was merged with National Food Security Mission.


  • Bridging the yield gap:
    • Based on a rough estimate, 3.6 million tons of additional oils can be produced by means of bridging the yield gap, assuming 1.5 tons per ha as a realizable yield.
    • This requires the wide scale adoption of improved agricultural technologies like quality seeds, optimum use of agro-chemicals and better management.
  • Improved varieties:
    • Promote the cultivation of improved varieties like Pusa 12, JS 20-34 of soybean, pusa double zero 30 and 31 of mustard which are low erucic acid as well as high yielding, also the newer, location specific improved varieties like Kadiri-6, Chattisghar Mungfali 1 (CGM 1)
  • Awareness generation:
    • Farmers need to be made aware about these newer varieties and provided with access to good quality seeds.
    • Cluster demonstrations and other extension activities in this line can be promoted.
  • Utilising fallow land:
    • India can also think of expanding the area under oilseed crops by utilising fallow land.
    • For example, India has 11.7 mha of rice fallow, which can be used for the cultivation of safflower and mustard crops, which don’t need much water.
  • Promote non-traditional sources and alternatives:
    • Rice bran oil:
      • Alternatives such as rice bran oil is gaining popularity amongst the urban consumers, as it is known to reduce the risk of heart diseases and type 2 diabetes.
      •  Rice bran constitutes about 8.5 per cent of the total production of rice and has around 15 per cent content.
      • Around 2 million tons of edible oil can be produced using the available rice bran.
    • Cotton seed:
      •  Cotton seed is also a promising source of vegetable oil and has an untapped potential.
      • Approximately 1.4 Mt of oil can be produced with cotton seeds.
    • Oil palms:
      • Another promising non-traditional source of edible oil is ‘oil palms’.
      • Oil palms yield 4 to 5 tons of edible oil per hacompared to around 1 tons of yield of other traditional oil seeds.
      • According to Ministry of Agriculture, India has the potential to expand the area under oil palm by 1.9 million hectares, which can produce around 7.6 million tons of additional edible oil.
      • However, palm oil has a long gestation period, harvesting of the crop is challenging and oil palm is water guzzling crop.
  • Stable and equitable trade policy and tariff structure:
    • For ensuring proper price signals to increase the domestic production of edible oilseeds, a stable tariff structure is needed.
    • A stable and equitable trade policy with clear direction will provide clear price signals for different market stakeholders and boost the domestic production of oilseed crops.


Q. Discuss the challenges associated with edible oil production in India and suggest measures to achieve the self-sufficiency in edible oil. (15 marks, 250 words)