India has achieved a milestone in exports with $418 billion in the 2021-22 fiscal, crossing $400 billion for the first time in history. This figure is expected to further increase in the years to come, especially in view of tree trade agreements (FTA) with UAE and Australia, where 96% of Indian products will have zero-duty access to Australian markets. Besides these two historic agreements, the country is looking forward to sign FTAs with Israel, Canada, the UK, and the European Union.
But what is more important and can’t be ruled out is the trade deficit or import bill especially in the sphere of edible oil. The country’s edible oil import bill rose from about Rs 65,000 crore in 2018-19 to Rs 1.5 lakh crore in 2020-21, even though there has been a slight decrease in the volume of imports. Now what has added to the miseries is the war in eastern Europe which has triggered a sharp rise in price of all food items but especially of edible oils, as India accounts for 15℅ of sunflower oil import from Ukraine.
The clouds of miseries cast by the skyrocketing prices of essential commodities, especially vegetable oils, have been badly hitting the poor who are running out of one or another essential item. Thus puts a question mark over the policymakers’ ability to reduce dependency on imported edible oil. It has been argued that the MSP (minimum support price) regime which guarantees procurement of produce has made the farmers stick to wheat-paddy cultivation for decades and the policymakers’ unwillingness to grant MSP and incentivise the farmers of edible oils have further made them ignore crop diversification. With around 100 edible oil refineries or solvent extractors dominated by MSMEs, Punjab and Haryana have a bigger role to play in order to boost India’s oilseed production but this can only be achieved if a production-linked incentive scheme is applied there. A better way to motivate the farmers to opt for oilseed production is to assure them of remunerative prices. Along with setting new records in exports, the policymakers must ensure to reduce the edible oil dependency by taking every possible action.
The writer is a student of BA Hons in Political Science at AMU