Cabinet approves measures to enhance oil palm cultivation

New Delhi, April 12 (IANS) The Union Cabinet, chaired by Prime Minister Narendra Modim on Wednesday approved measures such as relaxation of land ceiling limit, revision of norms of assistance in order to increase oil palm area and production in the country, a cabinet communique said.

The government approved relaxation in restrictions for providing assistance to cultivation in more than 25 hectare area "to attract corporate bodies towards oil palm and derive maximum benefit of 100 per cent Foreign Direct Investment".

The relaxation is applicable for National Mission on Oilseeds and Oil Palm (NMOOP) as well.

Also, it gave its approval "to revise the norms of assistance", mainly, for planting materials, maintenance cost, inter-cropping cost and bore-well "to make oil palm plantations attractive".

What possibly led to these relaxations is the widening gap between demand and supply of edible oil, which is met through imports. Imports of edible oil amounted to Rs 68,000 crores in 2015-16, according to the government.

Palm oil contributes 70 per cent of vegetable oil import and is one of the cheapest oil due to high productivity per hectare.

According to the communique, waste land, degraded land, cultivable land can be given on lease or rent or bought by private entrepreneurs, cooperative bodies, joint ventures for oil palm plantation.

Since the financial assistance under the NMOOP was available for 25 hectares, there was a need for relaxation of restrictions under mission to attract corporate bodies.

As per the statement, these measures will encourage oil palm plantation on large scale by corporate bodies and to utilise wastelands.

"By relaxing restrictions under NMOOP, private entrepreneurs, cooperative bodies, joint ventures will show their interest in investment in oil palm plantation and availing the NMOOP support," it said.

The government said it will also encourage farmers for oil palm cultivation "in a bigger way".

The revision of cost norm happened due to farmers' reluctance in taking up oil palm plantation "in view of large investment towards the cost of planting material, digging of pits, planting, manuring, irrigation and maintenance of plantation for four years without any income.

"The revision of cost norms will motivate farmers for oil palm plantation," the release said.

Currently, nearly 133 districts in 12 states are under oil palm cultivation and all the potential states are covered under the NMOOP.

At present, the programme is being implemented in 12 states: Andhra Pradesh, Karnataka, Tamil Nadu, Mizoram, Odisha, Kerala, Telangana, Chhattisgarh, Gujarat, Arunachal Pradesh, Nagaland and Assam.

As per the release, the Agriculture Ministry will approve Annual Action Plan (AAP) of the state governments on revised cost norms and private entrepreneurs, cooperative bodies, joint ventures will be invited by the respective state governments for oil palm plantation in their states.

The government said that there will be some financial implication in relaxing restrictions of area and up-scaling the norms of subsidies but "the same would be accommodated within NMOOP fund" and hence there will not be need of additional funds.

The NMOOP aims to bring an additional area of 1.25 lakh hectare under oil palm cultivation by the end of 2016-17.

The government has target of bringing 30,061 hectares of area in 2016-17 under oil palm cultivation but actual cultivation was only 9968 hectares till December 2016.