Revisiting the ‘Yellow Revolution’
Since October, edible oils have steadily become dearer. The price rise of different types of oils is now ranging from 20 to 56 per cent and reached the 11-year highest level. This rise cannot be overlooked since it is a part of the overall edible oil business sphere, comprising oilseeds production and edible oil imports, the factors ultimately affecting the prices.
Consumers are paying a high price because a large quantity of edible oils is imported, hence international prices have a bearing on the local selling prices. The reason for imports is obvious, the domestic production is less than the demand, which is continuously growing. India’s consumption of edible oils has been steadily rising over the years by 2 to 3 per cent per year with growing population and prosperity. Per capita consumption (PCC) of edible oil increased from 15.8 kg in 2012-13 to 19.5 kg in 2015-16 and it is now over 20 kg. Thus, in 2019-20 the demand was 24 million tonnes while the domestic supply was only 11 million tonnes, the shortfall of 13 million tonnes had to be managed by imports costing Rs 61,550 crore. This exorbitant cost can be effectively avoided by ramping up large scale farming of oilseeds.
India has shown that this can be done. In 1987 the government had launched a technology mission known as ‘Yellow Revolution’. One of the points in the mission was to increase oilseed production by 18 million tonnes. The farmers were not willing to grow oilseeds back then as they had other profitable 'cash crop' options. Hence, the technology mission’s goal was to make farmers see the benefits of growing oilseeds.
The mission delivered positive results with edible oil production in the country doubling from 12 million tonnes within a decade of the mission commencement. It thereafter reached 32 million tonnes by 2018-19. Still, it is not sufficient to meet the current demand. The success of the mission was due to various steps including the introduction of new technological inputs, incentivising farmers to grow oilseeds, and establishing 3000 oilseed societies with 13 lakh farmers. However, this thrust was not sustained further beyond a short period.
The government is again planning to work on mission mode to increase oil production with a plan to spend Rs 19,000 crores in the next five years. However, there are several constraints that the government will have to overcome. Firstly, the area under oilseeds cultivation is not growing much. For nearly two decades it has been restricted in the range of 36 to 38 million hectares. It reached 40 million hectare once in 2013-14 and came down to 37.4 million hectares in 2018-19.
To overcome this factor, intercropping and sequential cropping will have to be greatly exploited. Area left uncultivated after paddy harvest can be brought under oilseeds cultivation. An estimated 2 million hectares of paddy land can be used this way for mustard cropping. Another required step is to increase the quantitative yield of oilseeds per hectare and processing more tonnes of oil per kg of oilseeds. Though both these have increased, they are much less than the world average leave aside the best in the world. For instance, India’s average soyabean yield is just 1.13 tonne per hectare (t/ha) as against the world average yield of 2.41 t/ha, while Brazil has the best average in the world at 2.80 t/ha.
Concentrating on increasing the production will help only if the consumption is reduced simultaneously. Indian annual per capita consumption far exceeds the recommended 10.5 kg mark, which is unhealthy to say the least. Incentivising the families having low consumption by selling them the oil at a subsidised rate may help in changing the scene.
Having an experience of one successful technology mission on oilseeds, several more and new options can be considered and tried. But selfsufficiency in edible oils is a must for saving the high import cost and making the local prices free from international effects.