NEW DELHI, Feb. 27 (Business Line) -MALAYSIANS better watch out. TheIndian Government seems pretty serious about promoting oil palmcultivation to reduce its dependence on import of edible oils.

The 2002-03 Economic Survey has, in fact, carries a whole section titled'Oil palm: Can the lost opportunity be retrieved', while calling forputting in place a strategy "that could, in the medium term (say 5 years),at least meet annual incremental demand of 3 to 4 lakh tonnes".

The special mention about promoting domestic oil palm cultivation issignificant because the Survey's chapter on agriculture is normally of ageneral nature and the reference to individual crops does not go beyond acursory account of production and acreage trends. But in the latestSurvey, there is a two page section 'Special focus area - edible oils', ofwhich one-and-a-half pages is devoted to oil palm.

The Survey has noted that the country imports 40 lakh tonnes (lt) ofedible oil annually (valued at Rs 6,465 crore in 2001-02), which meets asizeable part of domestic demand (100-110 lt) that is not being met byindigenous production (60-70 lt). In the current fiscal, imports "may eventouch $ 1.75 billion out of total agri imports of nearly $ 3 billion".

According to the Survey, raising domestic production of the threeprincipal oilseed crops - groundnut, mustard and soyabean - has 'seriouslimitations' arising from the "lack of any genetic advance in technologyin evolving high productivity seeds". Further, 80 per cent of oilseeds isgrown under unirrigated conditions.

Neither will higher minimum support prices be of much help because yieldsare at best 10-17 tonnes per hectare even in high productivity States.Compared to this, the yields for wheat and rice range between 40-45 tonnes(Haryana-Punjab) and 28-34 tonnes (Andhra Pradesh-Punjab). Thus, despitethe MSP for mustard, at Rs 1,200 per quintal, being higher than the Rs 620per quintal for wheat, the gross return per hectare for oilseeds comes tohalf that of foodgrains.

"Given the current low productivity levels in the three major oilseeds,the country's dependence on imports to meet almost half of itsrequirements is unavoidable...Improvements in yield rates and favourablepricing policy together with a high WTO compatible tariff can at best makeonly a marginal impact," the Survey has pointed out.

It is in this context that the Survey has drawn attention to oil palm. Ifproduction commences from fourth year of planting, oil palm can yield 3-4tonnes per hectare of crude palm oil, "which in no way can be matched byany of the traditional oilseeds". The gross return for the grower, too,works out much higher at over Rs 50,000 per hectare.

The Survey has noted that although there is an Oil Palm DevelopmentProject that was launched in 1992, "progress has been very slow, evenhalting". Out of a potential area of 6.8 lakh hectares in Andhra Pradesh,Karnataka and Tamil Nadu, "just about 50,000 hectares have been plantedunder oil palm during the last ten years".

The Survey has said that the Government has incurred losses worth Rs 470crore in 2000-01 and Rs 51 crore in 2001-02 while buying copra at the MSPof Rs 3,200 per quintal, against the ruling market price of Rs 1,800 perquintal. Terming this support as a 'dole' which was 'totallynon-developmental', the Survey has observed that had oil palm beenallocated even half this amount, "the country would have benefited".

The Survey has advocated that oil palm be declared a plantation crop onthe lines of tea and coffee. This will free area expansion from landceiling restrictions, thus providing an important incentive for investors.

It has further urged concessional investment funding for processing plantsthrough active involvement of private sector and even cooperatives for oilpalm production, along with subsidy on all machinery required forprocessing plants. Oil palm, being a fruit is highly perishable, unlikecopra and other oilseeds, which have a shelf life of above one year.Hence, mere support to growers is not enough, but "we will have to strivesimultaneously towards increasing processing facilities with speed".