General Studies IISchemes

National Edible Oil Mission-Oil Palm


During  the year 2020-21, India imported 133.5 lakh tonnes of edible oil, out of which the share of palm oil was around 56 %. 

About National Edible Oil Mission-Oil Palm

  • The National Mission on Edible Oils – Oil Palm (NMEO-OP) has been launched with the aim to augment the availability of edible oil in the country by harnessing area expansion, increasing crude palm oil production with the aim to reduce the import burden.
  • The salient features of NMEO-Oil palm include assistance for planting material, inputs for intercropping upto gestation period of 4 years and for maintenance, establishment of seed gardens, nurseries, micro irrigation, bore well/pumpset/water harvesting structure, vermi compost units, solar pumps, harvesting tools, custom hiring centre cum harvester Groups, farmers and officers training, and for replanting of old oil palm gardens etc.
  • It is Centrally Sponsored Scheme with a special focus on the Northeast region and the Andaman and Nicobar Islands.  
  • A financial outlay of Rs.11,040 crore has been made for the scheme, out of which Rs.8,844 crore is the Government of India share and Rs.2,196 crore is State share and this includes the viability gap funding also.
  • The Mission hopes to increase oil palm acreage by an additional 6.5 lakh hectares by 2025-26 and grow production of crude palm oil to 11.2 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.
  • This is the first time the Centre will give oil palm farmers a price assurance, with industry mandated to pay the viability gap funding of 14.3% of crude palm oil prices. 
  •  The proposed scheme will subsume the current National Food Security Mission-Oil Palm programme.

Major focus areas of the Scheme

There are two major focus areas of the Scheme. 

  • The oil palm farmers produce Fresh Fruit Bunches (FFBs) from which oil is extracted by the industry
  • Presently the prices of these FFBs are linked to the international Crude Palm Oil (CPO) prices fluctuations.  For the first time, the Government of India will give price assurance to the oil palm farmers for the FFBs. This will be known as the Viability Price (VP).   
    • This will protect the farmers from the fluctuations of the international CPO  prices and protect them from volatility.  
  • A Formula price (FP)  will also be fixed which will be 14.3% of CPO and will be fixed on a monthly basis. The viability gap funding will be the VP-FP and if the need arises, it would be paid directly to the farmer’s accounts in the form of DBT.
  •  There is a sunset clause for the scheme which is 1st November 2037.  
  • The second major focus of the scheme is to substantially increase the assistance of inputs/interventions.  
    • A substantial increase has been made for planting material for oil palm and this has increased from Rs 12,000 per ha to  Rs.29000 per ha.
    •  A further substantial increase has been made for maintenance and intercropping interventions.
      •  Special assistance @ Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.
    • Special assistance will be provided for the North-East and the Andaman regions in which special provisions are being made for half moon terrace cultivation, bio fencing and land clearance along with integrated farming.   

Why Oil Palm?

  • It is the only crop that can give up to four tonnes of oil productivity per hectare under good farm practices.
  • But it is a water-guzzling crop, loves humidity (requires 150 mm rainfall every month) and thrives best in areas with temperatures between 20 and 33 degrees Celsius.
  • The National Re-assessment Committee (2020) has identified 28 lakh hectares suitable for oil palm cultivation in the country — the actual area under oil palm cultivation, as of 2020, is only 3.5 lakh hectares.
  • Much of this (34 per cent) is in the Northeastern states, including Assam, followed by Andhra Pradesh (19 per cent) and Telangana (16 per cent).
  • A large potential is thus waiting to be tapped.

Need for such schemes

  • India is the largest consumer of vegetable oil in the world. 
  • India’s Palm oil imports are almost 60% of its total vegetable oil imports.
  • Recently, India’s dependence on expensive imports has driven retail oil prices to new highs.
  • In India, 94.1% of its palm oil is used in food products, especially for cooking. Thus, palm oil is extremely important to India’s edible oils economy.
  • Top consumers: India, China, and the European Union (EU).

Significance of the mission 

  • Food security and nutrition: Global production and demand for palm oil are increasing rapidly. The cultivation of palm oil is more advantageous than other vegetable crops like soy, sunflower, and mustard, with 4-10 times the output per unit of land. This makes its cultivation critical to global food security and nutrition.
  • Low prices and neutral taste: which enhances oil accessibility to people below poverty lines.
  • Versatile nature: it can be easily blended with mustard, coconut, groundnut, and sesame, oil which are locally produced and traditionally used vegetable oils in Indian cooking.
  • Land availability: Land identified for oil palm plantations in northeastern States is already cleared for cultivation.
  • Suitable climatic condition: apart from land availability, the region possesses climatic conditions suitable for palm oil cultivation.

What are the issues associated with the mission?

Some members of civil society and activists have raised concerns about introducing oil palm in biodiverse regions such as Northeast states, Andaman & Nicobar Islands.

  • Destruction of rainforests and native biodiversity- The focus areas of the mission are biodiversity hotspots and ecologically fragile. Oil palm plantations would denude forest cover and destroy the habitat of endangered wildlife, as witnessed in Southeast Asia.
  • Impact on community ownership of tribal lands– the mission does not focus on community ownership of land in these regions. Thus, it may detach tribal from their identity linked with the community ownership of land.
  • Water stress– oil palm is a water-guzzling crop, which requires 300 liters of water per tree per day. Thus, it can lead to water stress in the region.
  • Invasive species– The palm is an invasive species. It’s not a natural forest product of northeastern India. Thus, its impact on biodiversity as well as on soil conditions has to be analyzed.
  • Past experience: Andaman and Nicobar Islands have some prior experiences in palm oil plantations. A 1,593-hectare area on Little Andaman used to be cultivated. However, it was abandoned on the instructions of the Supreme Court, as much of the lands were protected or reserve forests.
  • Examples of foreign countries: Sri Lanka, with similarly suitable climatic conditions, has stopped palm oil plantations because it became an invasive species, threatening native plants and animals. Furthermore, it dried up local streams.

About India’s Oilseeds Production and Imports

  • India’s vegetable oil economy is world’s fourth largest after USA, China & Brazil.
  • India is also third largest cultivator of oilseeds in the world and paradoxically meets into more than 50% requirement through imports.
  • Major Oilseeds Producing Areas in India are: Rajasthan, Gujarat, Tamil Nadu, Madhya Pradesh, Haryana, Maharashtra, Karnataka, Andhra Pradesh.
  • Due to diverse agro-climatic conditions and geographical locations, farmers are able to grow all the nine annual oilseeds viz. groundnut, rapeseed, soybean, sunflower, sesame, safflower, niger, castor and linseed.
  • In India, oilseeds are second most important crop after cereals sharing 14% of the country’s gross cropped area and accounting for nearly 3% of GDP.
  • Oilseed accounts for 13% of the Gross Cropped Area, 3% of the Gross National Product and 10% value of all agricultural commodities.
  • India needs a threefold increase in the oilseeds production in the next 35 years as – like pulses, oilseeds face severe challenges in terms of climatic stresses and unfavourable farming conditions.
  • Oilseed cultivation is mainly undertaken on marginal land by resource poor farmers who are generally reluctant to provide necessary inputs for increasing the productivity.
  • Nearly 82% of the oilseeds area fall under rainfed farming where climatic vagaries cause severe damage to crops.
  • Out of the total requirement, 10.50 million tonnes are produced domestically from primary (Soybean, Rapeseed & Mustard, Groundnut, Sunflower, Safflower & Niger) and secondary sources (Oil palm, Coconut, Rice Bran, Cotton seeds & Tree Borne Oilseeds) and remaining 60%, is met through import.
  • Despite the oilseed production of the country growing impressively, there exists a gap between the demand and supply of oilseeds, which has necessitated sizeable quantities of imports.

What are the government initiatives taken in this regard?

  • National Edible Oil Mission-Oil Palm (NEOM-OP)
  • Oil Palm Area Expansion under Rastriya Krishi Vikas Yojana
  • Increasing the MSP of rapeseed-mustard up by 8.6 % recently
  • Creation of buffer stock for oilseeds
  • Cluster demonstration of oilseed crops


  • India is one of the major oilseeds growers and importers of edible oils. 
  • India’s vegetable oil economy is the world’s fourth-largest after the USA, China & Brazil. 
  • The oilseed accounts for 13% of the Gross Cropped Area, 3% of the Gross National Product and 10% value of all agricultural commodities. 
    • This sector has recorded an annual growth rate of area, production and yield @ 2.44%, 5.47% and 2.96% respectively during the last decade (1999-2009).
  • Oilseeds cultivation is undertaken across the country in about 27 million hectares mainly on marginal lands, of which 72% is confined to rainfed farming.
  • A substantial portion of our requirement of edible oil is met through the import of palm oil from Indonesia and Malaysia.

Efforts to increase the production of oilseeds and oil palm. 

  • Since 1991-92, many efforts have been made by the Government of India to increase the production of oilseeds and oil palm
  • The oilseeds production has increased from 275 lakh tons in 2014-15 to 365.65 lakh tons in 2020-21. 
  •  For harnessing the potential of palm oil production, in the year 2020, an assessment has been made by the Indian Institute of Oil Palm Research (IIOPR) for the cultivation of oil palm which has given an assessment of around 28 lakh ha.
    • There is huge potential in oil palm plantation and subsequently production of Crude Palm Oil (CPO). 
  • National Mission on Oilseeds and Oil Palm (NMOOP)
    • National Mission on Oilseeds & Oil Palm (NMOOP) was launched in 2014-15 and continued up to 2017-18.
    • The expenditure will be shared between Central and State Governments in the ratio of 90:10 for Assam, Arunachal Pradesh, Nagaland and Mizoram and 60:40 for the remaining States.
      • However, 100% support is being provided to the Indian Institute of Oil Palm Research (IIOPR), Pedavegi, Andhra Pradesh for the supply of planting materials, need-based R&D and extension activities.
    • The objective is to augment the availability of edible oils and reduce the import of edible oils by increasing the production and productivity of oilseeds and oil palm. 

About Palm Oil:

  • It’s an edible vegetable oil that comes from the fruit of oil palm trees, having the scientific name  Elaeis guineensis
  • Palm oil is an incredibly efficient crop, producing more oil per land area than any other equivalent vegetable oil crop fulfilling 35% of the world’s vegetable oil demand on just 10% of the land. 
  • Two types of oil can be produced, crude palm oil comes and palm kernel oil, of which crude has more demand. 
  • Palm oil is an extremely versatile oil that has many different properties and is present in nearly 50 per cent packaged. 
  • Palm oil is a major driver of deforestation of some of the world’s most biodiverse forests, destroying the habitat of already endangered species like the Orangutan, pygmy elephant and Sumatran rhino. 

Source: PIB

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