India’s agri costs panel moots dynamic duty structure for edible oils to protect domestic oilseed growers
The Commission for Agricultural Costs and Prices (CACP) has recommended implementing a dynamic duty structure to protect domestic oilseed growers from cheaper imports. The CACP emphasized reducing India’s dependence on edible oil imports by improving local production and procurement. To encourage oilseed farming, the CACP proposed linking import duties to minimum support prices (MSP) and global/domestic market conditions. It also suggested bolstering pulses procurement, especially lentils, to sustain interest in farming and lessen import reliance. The Price Deficiency Payment Scheme (PDPS) was recommended for oilseeds to ensure effective support.
The Commission for Agricultural Costs and Prices (CACP) has recommended implementing a dynamic duty structure to protect domestic oilseed growers from cheaper imports. In its recommendations for rabi marketing season (RMS) 2025-26, the CACP stressed on the need to reduce import dependency for edible oils and pulses and called for improving domestic production while strengthening procurement. CACP said India’s dependence on imports of edible oils is high due to growing population, rising disposable income and increasing demand due to changing dietary habits. The world vegetable oils markets are highly volatile, which affect Indian producers and processors. Therefore, there is a need to reduce import dependency.
Raise landed costs
“In order to encourage farmers to increase production and protect them from cheap imports, the Commission recommends that dynamic duty structure based on the minimum support price (MSP) of oilseeds, global and domestic prices of edible oils, and demand-supply situation should be implemented and ensure that the landed price of imported oils is not cheaper than domestic price,” it said.
Edible oils are the most imported commodity accounting for 42.3 per cent of India’s agricultural import bill and 2.2 per cent of total import bill in 2023-24. More than 55 per cent of the domestic consumption is met by imports and reliance on imports has grown significantly, with import volumes rising from 8.4 million tonnes in 2011-12 to 15.5 million tonnes in 2023-24. While stating that stable and remunerative prices should be ensured to encourage farmers to grow oilseeds through effective procurement, CACP reiterated its earlier recommendation of ensuring private sector participation in oilseeds procurement operations. It also called for implementation of Price Deficiency Payment Scheme (PDPS) as physical procurement in oilseeds may not be feasible. While the market prices of rapeseed/ mustard seed, which were significantly higher than MSP in the RMS 2022- 23, remained below the MSP during 2023-24 and 2024-25 rabi marketing seasons, while prices of safflower remained below the MSP during the last five seasons, it said.
Impact on lentils
Further, with regard to pulses, the CACP called for strengthening of procurement with active participation of States. Since market prices of gram were higher than the MSP, procurement was very low during the 2024- 25 rabi marketing season. However, lentil production increased significantly during last two years due to increase in MSP and other interventions. The market prices of lentil remained below MSP. “In order to ensure continued interest of farmers in growing lentil and other pulses as well as reduce import dependency, the Commission recommends that procurement of pulses should be strengthened with active participation of States.” the CACP said. Procurement of gram declined significantly during the 2024-25 rabi marketing season on dip in production and sharp rise in market prices. However, in case of lentils, the market prices remained below the MSP during the current marketing season and Government procured about 2.4 lakh tonnes of lentil and procurement of total pulses was 3.4 lakh tonnes as on June 1, 2024.
Recommended for you
