100 per cent FDI in food processing to benefit palm oil sector

29 February 2016

Sanjay Goenka, president,Oil Palm Developers and Processors Association
The budget looks to double farmer income by 2020, which we welcome. The government has taken many initiatives for the upliftment of farmers which is a very positive sign for the sector.

Oil Palm Developers and Processors Association (OPDPA) believes that this target can be achieved by further focusing on the oil palm sector. The farmer-centric initiatives like 28.5 lakh hectares to be brought under irrigation, dedicated irrigation fund of Rs20,000 crore under NABARD, major program for sustainable groundwater management are welcome.

These will definitely help push the expansion of the oil palm area. Cultivating oil palm is water intensive; hence this is a positive reform by the government. Additionally, the oil palm story can only be a success if a significant amount of the above irrigation expenditure is diverted to the benefit of oil palm farmers across the country.

Furthermore the allocation of Rs35,984 crore allocated for the farming sector is also a much required initiative which will enhance the development of farmers in India. However, the industry was expecting a specific allocation to oil palm within this figure, for which we are yet to get clarity. The budget also announced 100 per cent FDI in food processing sectors, which can be beneficial to the industry if they are complimented with other reforms in the oil palm sector to meet targets. Although this year's budget was a fairly socialistic one with a focused approach on farmer community, the lack of focus on the oil palm project was disappointing.

Oil palm has proven to be one of the most profitable crops for the Indian farmer, thereby helping in the upliftment of the farmer and the ecosystem around him. The association thereby urges the government to take firm measures for the development of oil palm in India:

Establish a dedicated palm oil board with a separate budget altogether to support the farmer

Establish a strict import duty regime to prevent bulk imports of palm oil into India

Declare palm oil as a plantation crop across India and specifically in the northeast so that companies can lease/ buy large parcels of land to enable captive cultivation of Oil Palm

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