FFTC Agricultural Policy Platform (FFTC-AP)

On August 15, Prime Minister Narendra Modi announced a support of Rs 11,000 crore to incentivise oil palm production. The government intends to bring an additional 6.5 lakh hectares under oil palm cultivation. The agro-business industry has said the move will help its growth and reduce the country’s dependence on palm oil imports, especially from Indonesia and Malaysia. India imported 18.41 million tonnes of vegetable oil in 2018.

The National Mission on Oilseeds and Oil Palm are part of the government’s efforts to reduce the dependence on vegetable oil production. The Yellow Revolution of the 1990s led to a rise in oilseeds production. Though there has been a continuous increase in the production of diverse oilseeds — groundnut, rapeseed and mustard, soybean — that has not matched the increasing demand. Most of these oilseeds are grown in rain-fed agriculture areas of Gujarat, Andhra Pradesh, Haryana, Karnataka, Rajasthan, Madhya Pradesh, Tamil Nadu and Uttar Pradesh.

A significant incentive for the launch of the National Mission on Edible Oils and Oil Palm (NMEO-OP) to promote palm cultivation comes from the “success stories” of the two Southeast Asian countries, Indonesia and Malaysia. Indonesia has emerged as a significant palm oil hub in the last decade and has overtaken Malaysia. The two countries produce 80 per cent of global oil palm. Indonesia exports more than 80 per cent of its production.

However, a careful analysis of the policy initiative that can potentially change the rural and agrarian landscape of the Northeast and Andaman Islands needs to be undertaken. Oil palm cultivation can have disastrous environmental and social consequences. Studies on agrarian change in Southeast Asia have shown that increasing oil palm plantations is a major reason for the region’s declining biodiversity. Indonesia has seen a loss of 1,15,495 hectares of forest cover in 2020, mainly to oil palm plantation. From 2002-18, Indonesia lost 91,54,000 hectares of its primary forest cover. Along with adversely impacting the country’s biodiversity, it has led to increasing water pollution. The decreasing forest cover has significant implications with respect to increasing carbon emission levels and contributing to climate change.

Palm oil plantations have stoked conflict between government policies and customary land rights. Such rights are major livelihood sources for forest-dependent communities. Legislation allowing the clearing of tree cover and cutting forests for growing palm trees has led to increasing land-related tussles between government officials, locals and agro-business groups in Malaysia and Indonesia. The Northeastern states are politically sensitive areas, and the oil palm initiative could breed tension there.

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