presented by editorial discussion 1/38 week editorial

EDITORIAL DISCUSSION

EDITORIAL DISCUSSION … 16th Sep, 2019

1/38th WEEKPresented by

POPULATION GROWTH…

HOW TO MAKE IT AN ASSET TO THE NATION?

19400:00

US LEAVING AFGHANISTAN…

DISASTER FOR THE REGION

19511:16

ENERGY TRANSITION… WHAT IS

FLEXIBILIZATION & SF6?

196

20:48

GIG ECONOMY… WORKERS RIGHTS 197

30:18

WHY CAN’T YOU EMULATE

PULSES SUCCESS IN OILSEEDS?

198

35:02


16th SEPTEMBER, 2019

NEWSPAPER

E D I T O R I A L S… DISCUSSION


Examine the reasons for the turnaround

of the Pulses, from deficient to almost

self-sufficiency. Give a critical thought on

what needs to be done to emulate similar

success in oilseeds.

DRAFT QUESTION

198Major crops cropping patterns in various parts of

the country, different types of irrigation and irrigation systems storage, transport and

marketing of agricultural produce and issues and related constraints; e-technology in the aid of

farmers.

UPSC CSE – GS III

GS III … Economic Development

12th September, 2019


Domestic producers are languishing due to unfettered imports. A ceiling on imports and addressing production issuesare vitalIt is heartening that the government has now woken up to the poor state of our domestic oilseeds and vegetable oilsector. In her maiden Budget speech on July 5, Finance Minister Nirmala Sitharaman referred to the need to boostdomestic oilseeds production to reduce the burgeoning dependence on imported oils.Without doubt, in the short to medium term, the country cannot do without edible oil imports to meet the domesticshortfall. India’s vegetable oil imports — in volume and value terms— have skyrocketed in recent years to 14-15 milliontonnes, amounting to around $11 billion (over ₹77,000 crore).Our import dependence has worsened to over 70 per cent. In a situation of shortage, it is logical to expect that domesticproducers will reap large gains. But, far from it, in our country, oilseed growers are in distress. They are unable to receiveeven the minimum support price assured by the government.No wonder, the acreage under oilseeds has stagnated at 26-28 million hectares. Yields continue to be abysmally low(1,000-1,100 kg per hectare) as growers have no incentive to improve agronomic practices. The marketability of the cropis weak in the absence of an effective price support mechanism.It is time for the policymakers to seriously get down to addressing the real issues of the sector rather than merely tinkerwith tariff policies in a way that helps traders and speculators.The policy objectives should be to balance the interests of growers and consumers alike. The policy must ensure moreremunerative prices to oilseed growers so that they strive to produce more by raising yields. At the same time, the policymust ensure that consumers, especially the poor, have access to cooking oil at affordable prices.

The oilseeds sector needs fresh policy impetus198

…Contd.


Clearly, liberal policies or free market operations of the last 25 years (unfettered imports, zero or low rate of duty) havefailed to protect domestic growers insofar as the oilseeds and vegoil sector is concerned. It is time we tackled the issuesfacing the sector differently.While raising oilseeds yields through improved agronomy, tapping non-conventional sources (tree-borne oilseeds etc)and improving extraction efficiency are some of the key initiatives, their positive outcomes will be felt with a time lag.Here are a few simple and eminently implementable suggestions whose outcomes will be almost immediate.Ceiling on vegoil import: There must be a ceiling on the volume of edible oil import. Private trade imports excessivequantities for speculative purposes and floods the domestic market, which in turn depresses domestic oilseed prices.A reasonable guess would be that 10-15 per cent of the current import volume is speculation driven. . A ceiling on vegoilimport (with provision to review it every six months) will reduce the quantum of arrivals and support domesticproducers, especially growers.Monitor imports: Imports have to be closely monitored by following a system of registration of contracts, trackingarrivals, and so on. Trade will become more transparent. This will help policymakers with real-time information fortaking informed decisions proactively. Currently, policymaking for the sector is reactive and New Delhi has no clue aboutimports contracted for. This must change.Reduce credit period: Many Indian importers are caught in an ‘import debt trap’. They often enjoy credit period of 90-150 days for payment of the value of the cargo to overseas suppliers. The long credit period encourages over-tradingand fosters an unending loop of imports for sake of paying for past imports. This one step alone has the potential totransform the trade.


…Contd.


Dynamic tariffs: Import duties should be varied dynamically so that imported oils are not cheaper than domestic oilscalculated on the basis of MSP for oilseeds.The aforesaid steps will lift domestic oilseed prices from the current low levels and provide a morale booster to growers.Marketability of the crop will improve as the ceiling on oil imports will help boost capacity utilisation in domestic oil millsand solvent extraction plants.It is important to ensure that consumers across the country — especially the weaker sections — have access to cookingoil at affordable price. This is possible by including edible oil under the Public Distribution System and National FoodSecurity Act. Even 2 kg of refined oil per family per month at subsidised rates would go a long way in advancing food andnutrition security. If it entails a subsidy, so be it. A combination of PDS and private trade supplies will help advanceconsumer interest.The government has taken steps with far-reaching implications on pulses trade. Despite immense international pressureto ease policy restrictions on pulses, New Delhi has stood its ground.So, it is time the government turned its attention towards oilseeds.Importantly, policies backed by investments to address the structural issues of oilseeds production so as to raiseproductivity levels are imperative.The writer is a policy commentator and global agribusiness specialist. Views are personal



SEVEN CEREAL CROPS

Paddy Wheat Maize

Sorghum Pearl Millet Barley

Ragi


FIVE PULSES

Gram Tur Dal

Moong Dal Urad Dal

Lentil


SEVEN OIL SEEDS

Groundnut Rapeseed-Mustard Soybean

Sesamum Sunflower Safflower

Niger seed


FOUR COMMERCIAL CROPS

Copra Sugarcane

Cotton Raw Jute


Examine how the crisis in pulses was converted to an opportunity and list out

various steps taken by the Government to come out of the pulses crisis?

PULSES … CONVERTED FROM CRISIS TO OPPORTUNITY!

SHORT TERM MEASURES TAKEN

Pacts were signed with countries like

Mozambique, to increase the import of pulses.

A Panel headed by Chief Economic Advisor at

that time, Arvind Subramanian looked into the

issues related to MSP and subsidy to the

farmers to grow pulses etc.

Buffer stock was increased from 8 lakh tonnes

to 20 lakh tonnes.

Government released the stocks to the States

for retail distribution at the rate of Rs. 120 per

kg, when the prices increased abnormally.

However, we came out of this crisis as the pulses

production increased from around 17-18 million

tonnes to around 23-25 million tonnes. However,

the farmers faced the problem of crash in prices!

IMPORTANT

QUESTION


LONG TERM STRATEGY ADOPTED

National Food Security Mission was expanded to cover all the 638

districts and 60% of the total allocation was earmarked for the pulses.

Efforts were made to bring more irrigated area under the pulses by

shifting some of the farmers from rice / wheat to the cultivation of

pulses.

The next aspect is with regard to productivity, yield per hectare. Pulses

occupy 20% of the area under food grain cultivation but, they account

for less than 10% of India’s annual food grains output. Under these

circumstances, IIPR Kanpur carried out research to develop high yield

varieties to increase yield to 15-20 quintals per hectare from around

9-10 quintals per hectare.

Mini-kits were distributed to the farmers at free of cost through the

State Government to expand cultivation with new types of seeds.

Government popularized new seed varieties through a network of 150

Seed Centers, Krishi Vigyan Kendras, Agricultural Universities etc.

534 Agricultural Science Centers were involved in demonstrating new

techniques for pulses production.

PULSES … CONVERTED FROM CRISIS TO OPPORTUNITY!


VEGETABLE OIL … ALARMING SCENARIO IN IMPORTS!

They increased enormously in recent times and

are in the range of 14 to 15 million tonnes.

Vegetable oil is the largest agricultural

commodity imported, with a CAGR of 9.4%

during the past five years.

Malaysia and Indonesia account for majority of

the imports.

Palm oil is the largest commodity imported.

The domestic oilseed acreage almost

stagnated at 26 to 28 million hectares.

Yields continue to be abysmally low at 1,000 to

1,100 kg per hectare.

OILSEEDS … ALTOGETHER IN CONTRAST!

AGRICULTURAL IMPORTS (2018-19)

EDITORIAL DISCUSSIONTO EMULATE SUCCESS STORY OF PULSES

IN OILSEEDS!

Do not restrict oilseed

cultivation only to the rain-fed

areas.

2

The marketability of the crop

is weak, in the absence of an

effective price support

mechanism and this needs a

serious thought.

5

WHAT NEEDS TO BE DONE?

Increase R&D expenditure in

oilseeds.1

Remove the mis-conception

from the minds of the farmers

that oilseeds are for the areas

where no other crop grows.

3Give incentives to improve

agronomic practices. 4


There must be a ceiling on the

volume of edible oil imports,

as sometimes they import

more because of easy credit

terms.

7

The weaker sections should

have access to cooking oil at

affordable price. This is possible

by including edible oil under the

Public Distribution System and

National Food Security Act.

10

WHAT NEEDS TO BE DONE?

We should improve extraction

efficiency.6

Because of excessive imports,

it depresses the domestic

oilseed prices.

8

Import duties should be varied

dynamically so that imported

oils are not cheaper than

domestic oils calculated on the

basis of MSP for oilseeds.

9

TO EMULATE SUCCESS STORY OF PULSES

IN OILSEEDS!


Government has taken steps with far

reaching implications on pulses

trade by easing the policy

restrictions on pulses. It is time the

Government turned its attention

towards oilseeds. Importantly,

policies backed by investments to

address the structural issues of

oilseeds production, so as to raise

productivity levels are imperative.

FINAL WORD!


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