The government’s decision to allow 100 per cent foreign direct investment (FDI) in oil palm plantations in November last year has failed to draw even a single investor.
“There has not been even a single enquiry for FDI till now,” Sanjay Goenka, President of Oil Palm Developers and Processors Association (OPDPA) told The Hindu.
“No FDI will flow into this segment unless oil palm is declared as a plantation crop,” he said. OPDPA is a consortium of companies that includes 3F Oil Palm Agrotech Private Ltd, Godrej Agrovet Ltd, Navabharat Oils Ltd, Radhika Vegetable Oils Private Limited and Ruchi Soya Industries Ltd.
Allowing foreign investment makes sense only if there is a relaxation of land ceiling norms paving way for large scale plantation oil palm, Mr. Goenka said. The current policies of the Centre do not allow companies to either acquire or lease land beyond a specific acreage as defined by land ceiling norms. Thus, there is no scope for the corporate sector for large scale plantation of oil palm.
Consequently, only 200,000 hectares of land was brought under cultivation in the last two decades as against an estimated potential of two million hectares. Oil palm is comparatively a new crop in India and is stated to be the highest vegetable oil yielding crop. In order to encourage its cultivation in the country as a part of its effort to reduce imports and ensure edible oil security, the government came out with a National Mission on Oilseeds and Oil Palm (NMOOP).
NMOOP envisages bringing an additional 1.25 lakh hectares under oil palm cultivation through area expansion approach in the States including utilisation of wastelands. The States currently engaged in oil palm cultivation are Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Maharashtra, Mizoram, Karnataka, Kerala, Odisha, Tamil Nadu, Arunachal Pradesh, Assam, Bihar, Manipur, Meghalaya, Nagaland, Sikkim, Tripura and West Bengal. Oil palm developers, however, say that the potential of this crop could be realised effectively if there is a separate oil palm development board, a separate import policy for palm oil and a separate budget for oil palm industry development besides relaxation of land ceiling norms.
India’s edible oil imports are rising steeply. In the past 13 years, import of crude and refined oil was reported to have quadrupled and the import bill in this regard is expected to touch $ 15 billion in 2016-17.