MARKET DEVELOPMENT
Nirmala Rules Out Raising Import Duty on Crude Palm Oil
Nirmala Rules Out Raising Import Duty on Crude Palm Oil
19/10/2015 (Hindu Business Line) - Ruling out the possibility of a hike in import duty on crude palm oil from 12 per cent to 50 per cent as a measure to protect the interests of domestic farmers, Union Minister of State for Commerce and Industry Nirmala Sitaraman has said that such a ‘drastic step’ would be seen as a barrier to international trade.
Speaking to the media after a two-hour interaction with oil palm farmers organised by the A.P State Oil Palm Farmers Welfare Association (APS-OPFWA) here on Friday, she, however, said the Ministry of Commerce would consider a marginal hike in import duty after due consultations with the Ministry of Finance.
“The possibility of the Centre bearing a portion of the shortfall in price realisation as it did earlier for tobacco farmers will be examined. But there is no guarantee,” she said, adding that farmers now are barely getting Rs. 5,800 per tonne of oil whereas the cost of production for a tonne of Fresh Fruit Bunches (FFB) stands at nearly Rs. 9,000,
Attributing the losses to dumping of crude palm oil by Malaysia and Indonesia, which enjoy surplus production, she drew a comparative analysis of the cost of cultivation in India and in those two countries.
“In Malaysia and Indonesia, farmers incur nearly zero expenditure on irrigation as the crop there is entirely rainfed, whereas growers here depend heavily on bore-wells which entails hefty power bills that substantially add to the cost of cultivation,” she explained, adding that the crop’s long-gestation period was compounding the farmers’ woes further. Even if the Centre adopts market intervention measures, farmers must explore other means to reduce their costs, such as intercropping, she said.
OPFWA president B.V. Raghava Rao attributed the crisis in the oil palm sector to the steep rise in the cost of production and feared that lack of government support would drive farmers to distress.
Speaking to the media after a two-hour interaction with oil palm farmers organised by the A.P State Oil Palm Farmers Welfare Association (APS-OPFWA) here on Friday, she, however, said the Ministry of Commerce would consider a marginal hike in import duty after due consultations with the Ministry of Finance.
“The possibility of the Centre bearing a portion of the shortfall in price realisation as it did earlier for tobacco farmers will be examined. But there is no guarantee,” she said, adding that farmers now are barely getting Rs. 5,800 per tonne of oil whereas the cost of production for a tonne of Fresh Fruit Bunches (FFB) stands at nearly Rs. 9,000,
Attributing the losses to dumping of crude palm oil by Malaysia and Indonesia, which enjoy surplus production, she drew a comparative analysis of the cost of cultivation in India and in those two countries.
“In Malaysia and Indonesia, farmers incur nearly zero expenditure on irrigation as the crop there is entirely rainfed, whereas growers here depend heavily on bore-wells which entails hefty power bills that substantially add to the cost of cultivation,” she explained, adding that the crop’s long-gestation period was compounding the farmers’ woes further. Even if the Centre adopts market intervention measures, farmers must explore other means to reduce their costs, such as intercropping, she said.
OPFWA president B.V. Raghava Rao attributed the crisis in the oil palm sector to the steep rise in the cost of production and feared that lack of government support would drive farmers to distress.