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Edible Oilseeds Supply and
Demand Scenario in India:
Implications for Policy
Division of Agricultural EconomicsIndian Agricultural Research Institute
New Delhi - 110 012
Girish Kumar Jha
Suresh Pal
V.C. Mathur
Geeta Bisaria
P. Anbukkani
R.R. Burman
S.K. Dubey
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Edible Oilseeds Supply and Demand
Scenario in India: Implications for Policy
Girish Kumar Jha
Suresh Pal
V.C. Mathur
Geeta Bisaria
P. Anbukkani
R.R. Burman
S.K. Dubey
© 2012, Indian Agricultural Research Institute
Published by: Director, IARI
ISBN: 978-81-88708-90-1
Design and printed at:
Venus Printers and Publishers, B-62/8, Naraina Industrial Area, Phase-II, New Delhi - 110 028
Ph. : 45576780, Mobile: 9810089097, E-mail: [email protected]
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Contents
Foreword ............................................................................................................ (v)
Acknowledgements ............................................................................................ (vii)
Executive Summary ........................................................................................... (ix)
1. Introduction ...................................................................................... 1-6
2. Trends in Production and Productivity of Oilseeds in India .............. 7-31
3. Sources of Growth and Input use in Oilseeds ................................. 32-55
4. Structure of Oilseeds Processing Sector of India ............................ 56-63
5. Demand Projections for Edible Oils in India .................................. 64-74
6. Trade Pattern and Tariff Policies in Edible Oils .............................. 75-89
7. Conclusions and Recommendations .............................................. 90-96
8. References ..................................................................................... 97-99
Foreword
Oilseeds occupy an important position in the agricultural economy of India.
The country is the largest producer of oilseeds in the world and contributes 7
per cent of the global vegetable oils production with 14 per cent share in the
area. The growth in the domestic production of oilseeds has not been able to
keep pace with the growth in the demand in the country. Low and unstable
yields of most oilseed crops, and uncertainty in returns to investment, which
result from the continuing cultivation of oilseeds in rainfed, high risk production
environments, are the factors leading to this situation of wide demand-supply
gap.
The country now imports nearly half of the annual consumption of 168
million tonnes. The Technology Mission on Oilseeds (TMO) launched in 1986
was the first comprehensive intervention aiming self-sufficiency in edible oils
production through the spread of technology and provision of market support.
The Mission met with early success. However, increasing demand for edible
oils necessitated the imports in large quantities leading to a substantial drain on
foreign exchange. Edible oil imports increased from around 15 per cent of total
edible oils consumption in 1995-96 to nearly 53 per cent in 2009-10. The need
for addressing this deficit motivated a systematic study of the oilseeds economy
in order to formulate appropriate strategies to bridge the demand-supply gap.
This volume provides the current and future edible oils needs of the country
based on an in-depth analysis of current production trends and deficiencies,
yield potential, trade in oilseeds and edible oils. The performance of oilseeds
economy over the last three decades highlights the significance of policy and
technology. The report also investigates the role of technological inputs, policy
environment and pricing strategies in providing a direction for development of
the sector. The need for an efficient oilseed processing industry as well as
exploitation of non-conventional vegetable oils to bridge the demand-supply
gap is also discussed.
In view of the importance of this sector for ensuring inclusive growth and
the need to achieve self-sufficiency in oilseeds production, key challenges faced
by the edible oils sector and the strategy to address them are also spelled out.
Widening the scope of research and technology diffusion and institutional
options beyond the farm gate like enhancing efficiency of the processing industry
is the way forward in improving the performance of the oilseeds sector.
Improving local capacities for tackling regional differences in oilseeds
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productivity as part of the technological and policy response will go a long way
in strengthening the oilseeds economy and raising overall productivity in the
disadvantaged regions. I am sure some of the suggestions made in the report on
the basis of diligent analysis will find practical use in research and policy
planning.
(H.S. Gupta)
Director
Indian Agricultural Research Institute
New Delhi 110 012
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Acknowledgements
The present project on the “Oilseeds and Edible Oils Scenario in India” was
sponsored by the Directorate of Vanaspati, Vegetable Oils and Fats, Ministry
of Consumer Affairs, Food and Public Distribution, Government of India. We
are grateful to the Ministry for providing financial support for undertaking this
research study. We are particularly grateful to Dr. Y. C. Nijhawan, Chief Director-
cum-Edible Oil Commissioner, and Mrs. Rajni Agrawal, Deputy Director, for
their constant support during the course of the project.
The project involved an extensive survey of different states where edible
oilseeds are cultivated. Many scientists, farmers, oil millers and traders were
consulted to obtain the required information on different issues; we are thankful
to all of them. We are grateful to the officials and the field staff of various
organizations, particularly of Directorate of Oilseeds Research, Hyderabad,
Directorate of Rapeseed & Mustard Research, Bharatpur and Directorate of
Groundnut Research, Junagadh, for all the help and support provided by them
in the form of data, information and suggestions.
We place on record our thanks to the Director and Joint Director (Research),
IARI, New Delhi, for according permission to undertake this work. Thanks are
also due to the Indian Council of Agricultural Research, for supporting the
study.
Special thanks are due to Dr. Alka Singh, Principal Scientist and Mr. Lijo
Thomas, Ph.D. Scholar of the Division of Agricultural Economics, IARI, New
Delhi, for the help provided at different stages of this study.
Mr. Gajab Singh and Mr. Manoj Kumar Sharma, worked in this project as
Research Associates. Their sincere efforts and hard work helped us to complete
this project. We thank them sincerely for their assistance.
Authors
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Executive Summary
India is the largest producer of oilseeds in the world and the oilseed sector
occupies an important position in the country’s economy. The country accounts
for 12-15 per cent of global oilseeds area, 6-7 per cent of vegetable oils
production, and 9-10 per cent of the total edible oils consumption. In terms of
acreage, production and economic value, oilseeds are second only to foodgrains.
Besides the nine major oilseeds cultivated in India, a number of minor oilseeds
of horticultural and forest origin, including coconut and oil-palm, are also grown.
In addition, substantial quantities of vegetable oils are obtained from rice bran
and cotton seed along with a small quantity from tobacco seed and corn. The
area and production under the nine oilseeds was 26.11 million ha and 24.88
Mt, respectively in 2009-10, whereas the total edible oil production in the country
stood at 6.17 Mt in 2009-10. As per the fourth advance estimates for 2010-11,
the production of total nine oilseed crops is 31.10 Mt, which is a quantum
jump over previous year’s production. Oilseeds area and output are concentrated
in the central and southern parts of India, mainly in the states of Madhya
Pradesh, Gujarat, Rajasthan, Andhra Pradesh and Karnataka. Among different
oilseeds, groundnut, rapeseed-mustard and soybean account for about 80 per
cent of area and 87 per cent of production of oilseeds in the country (2010-11).
The domestic demand for vegetable oils and fats has been rising rapidly, at
the rate of 6 per cent per annum, but our domestic output has been increasing
at just about 2 per cent per annum. In India, the average yields of most oilseeds
are extremely low as compared to those other countries of the world. The
cultivation of oilseeds in India is in high risk regions where there are uncertain
returns on the investments. The study was formulated with the objectives of
ascertaining the present and future edible oil needs of the country, current
production scenario and associated constraints, yield position and trade in edible
oils and its impact on the oilseed economy.
The area, production and productivity of oilseeds grew at a compound
annual growth rate of 1.58 per cent, 3.05 per cent and 1.45 per cent, respectively,
during the period 1951-2009. Among the oilseed crops, the growth rate in area
and production was the highest for soybean (10.73 % and 12.73 %, respectively).
Castor, sunflower and rapeseed-mustard also exhibited a healthy growth rate in
production. There was a relative decline in the annual growth rate of area,
production and productivity of oilseeds during 1991-2000 as compared to 1981-
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1990. The area expansion in oilseeds during the past two decades was mainly
possible because of the replacement of non-remunerative crops like millets and
minor food crops and partly through increase in cropping intensity. Instability
in area, production and productivity of oilseeds has been estimated using
coefficients of variation. Maximum variability has been observed in the
production (54.81 %), followed by area (27.45 %) and productivity (28.65 %) of
oilseeds during the period 1950-2009. The production of the nine oilseeds
jumped from 9 Mt in 1980-81 to more than 28 Mt in 2008-09 with an annual
growth rate of 3.53 per cent per annum. During this period, area and productivity
of these nine oilseeds registered an annual growth rate of 1.46 per cent and
2.05 per cent per annum, respectively.
Among the major oilseed-producing states, Rajasthan, Madhya Pradesh
and Maharashtra have exhibited the healthy growth rates in the area, production
and productivity during 1980-2009. Only a few states like Haryana, Madhya
Pradesh, Maharashtra, Rajasthan and West Bengal have increased the oilseeds
production through both area as well as productivity improvement. The area
under soybean has rapidly increased from 0.03 M ha in 1970 to 2.6 M ha in
1990 and to 9.39 M ha in 2009-10 with a production of 10.31 Mt and productivity
of 1098 kg/ha. The rate of growth in the production was estimated to be around
12 per cent at country level and increase in the production was mainly due to
significant expansion in area (16.71 %) during 1981-1990. Major expansion
took place in Madhya Pradesh accounting for 55.80 per cent of area under
soybean cultivation.
The area, production and productivity of rapeseed-mustard grew with a
compound annual growth rate of 1.88 per cent, 4.18 per cent and 2.26 per cent,
respectively during 1980-2009. The production, area and yield
of rapeseed-mustard seed experienced a significant growth from 1984-85 to
1996-97, primarily due to the increase in irrigated land and the availability of
high-yielding seeds in the country. This trend was partly reversed due to
intermittent drought conditions in some of the major oilseed producing states.
The output growth fell from 15.11 per cent during 1981-90 to 10.79 per cent in
2001-09. The country registered a moderate growth in the production (0.54 %)
as yield growth (1.21 %) was neutralized by the negative growth in area of
groundnut during 1981-09. The groundnut crop recorded a significant decline
in area and production during 1991-2000. This was mainly due to the gradual
replacement of the crop by cotton, soybean and sunflower. Gujarat was the
only state that exhibited impressive growth in the production of groundnut during
1991-2000, mainly because of yield growth.
In India, edible oil consumption has been growing steadily over the years.
From around 5 Mt in 1990-91, the aggregate consumption of edible oils has
gone up to 14 Mt in 2009-10. Groundnut, rapeseed-mustard, soybean and palm
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oil account for around 60 per cent of the edible oils consumed in the country.
At the aggregate level, total and per capita consumption of edible oils has been
increasing over time. In rural and urban India consumption of all edible oils
per month increased from 0.37 kg and 0.56 kg respectively, in 1993-94 to 0.64
kg and 0.82 kg in 2009-10. This translates into an increase of 72 per cent and 46
per cent, respectively, among rural and urban households. The edible oils
requirement of the country has been projected at 16.34 Mt in 2016-17 and 20.36
Mt in 2020-21, i.e. at the end of 12th Plan and 13th Plan, respectively. Assuming
the business as usual scenario with no significant technological breakthroughs
and taking the yield level of 1026 kg/ha (triennium ending 2008-09) and a
compound annual rate of growth of 2.13 per cent in area and 2.44 per cent in
yield, which was observed during the previous decade, domestic edible oils
production is projected at 10.55 Mt in 2016-17 and 13.23 Mt in 2020-21. Given
the projected demand of 16.34 Mt, there will be a gap of 5.79 Mt in 2016-17
which will have to be met through imports. Any further improvement in the
yield growth shall reduce dependence on the imports.
The proportion of imports in total availability (domestic production plus
imports) of edible oils has increased from the meagre 3 per cent in 1970-71 to
about 56 per cent in 2009-10. Significant changes are evident in the quantum of
imports of edible oils with reference to the periods that mark the implementation
of the Technology Mission on Oilseeds (TMO) and the emergence of the new
trade regime after the establishment of the WTO. From a high quantum of
1944 thousand tonnes in 1987-88, imports came down to 114 thousand tonnes
in 1993-94. Imports started rising again after the establishment of the WTO
and the initiation of trade related reform measures. From around 347 thousand
tonnes in 1994-95, imports rose to 8034 thousand tonnes in 2009-10. Imports
of edible oils have serious implications for the domestic prices of edible oils as
imports are subject to international price volatility. India’s oil imports form a
big share in world trade, especially in palm oil and soybean oil. India has the
second position in import of palm oil (3.94 Mt) as well as soybean oil (10.18
Mt) contributing 13.25 per cent and 9.06 per cent, respectively, of the total
world trade. A comparison of applied and bound tariff rates shows that except
for soybean and rapeseed/mustard, India has considerable flexibility to reduce
imports by making them costly by raising tariffs. A comparison of the minimum
support price (MSP) with the farm harvest prices shows that the farm harvest
prices have been generally higher than the MSP for the three major oilseeds.
Hence, MSP has little relevance for oilseeds. Moreover, very little procurement
of oilseeds is done, the emphasis of the country’s food management system
being on paddy and wheat in which case the MSP has been adequate over the
years.
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The oilseed sector has tremendous potential for further growth. This study
has discussed the role of irrigation, seeds, efficient crop management and
technological interventions as the key sources of growth of oilseed production.
An important source of yield growth in oilseed crops has been the spread of
irrigation facilities. The percentage of area under irrigation in oilseed crops
stands at less than 30 per cent, which is very less as compared to area under
cereal crops. Among the three major oilseed crops, the area under irrigation is
high for rapeseed-mustard (72 %), whereas it is quite low in groundnut (20 %)
and soybean (2 %). Another source of growth in oilseed crops is the technological
component embedded in the low cost and no cost technologies developed for
efficient field management of the crop.
The yield gap analysis for major oilseed crops in India has been performed
using the Front-Line Demonstrations (FLD) data conducted under the All-India
Coordinated Research Projects on different oilseed crops. The yield gap between
on–farm demonstration and actual farm yield has failed to show appreciable
reduction over the past two decades. This gap for nine oilseed crops has declined
marginally from 34.8 per cent to 31.8 per cent during the past two decades. The
reduction in gap was more substantial (from 32.4 % to 21.3 %) for the three
major oilseed crops taken together, viz. rapeseed-mustard, groundnut and
soybean. However, the gap between potential yield of varieties and research
station yield has increased over time. This gap calls for a review of the production
technology developed for the individual crops to bridge this gap.
The lack of availability of quality seed material of improved cultivars is
another concern for oilseed cultivators. Out of the total of 670 varieties notified
for oilseed crops, only 264 varieties were present in the seed multiplication chain.
A few varieties constitute bulk of the breeder seed indent. The highly skewed
demands for specific varieties, which can be seen among all the oilseed crops,
present a challenge to the institutional mechanism for seed in oilseed crops.
A field survey was conducted in the Junagadh and Bharatpur districts for
groundnut and rapeseed-mustard, respectively to assess the field-level constraints
faced by the oilseed cultivators and processors. The low price of the produce
realized by the farmers was ranked as the most important constraint in the
production of groundnut. Constraint related to marketing and price of produce
was also ranked as most important by the rapeseed-mustard growers in Rajasthan.
The constraints highlighted by the rapeseed-mustard processors were the increase
in competition from imported edible oils due to low tariffs on imports and low
capacity utilization. The groundnut processors identified price competition with
MNCs, non-availability of raw material, non-availability of efficient processing
technology, existence of multi-layered marketing channel and non-availability
of timely credit as the major constraints being faced by them.
(xiii)
The current status of oilseed crops has been analyzed for the past three
decades which highlights the role of policy, technology and their interactions
in shaping it. The role of technological inputs, policy environment and price
systems in giving direction to the oilseeds economy cannot be over-emphasized.
The potential sources of growth and their related constraints throw light on the
possible future directions in oilseeds economy for sustaining its growth.
Enlarging the scope of research and technology diffusion and institutional
intervention beyond the farm gate is the way forward in re-energizing the oilseed
crop sector. Special emphasis may be given to the following:
● Increase public research spending in oilseed crops for development of biotic
and abiotic stress tolerant varieties and other potential areas for yield
breakthrough.
● Strengthen the oilseed crop seed chain, particularly in groundnut to match
the variety specific demand for higher yield.
● Provide incentives to private sector participation in processing and value
addition in oilseed crops. Also, constraints for low capacity utilization should
be addressed.
● Ensure availability of key physical (fertilizers, pesticides), financial (credit
facilities, crop insurance) and technical inputs (extension services) in major
crop ecological zones for oilseed crops.
● Implement market reforms and policies, such as contract farming and public-
private partnership in production and processing, to ensure a competitive
market for oilseeds and edible oil along with adequate protective measures
to avoid unfair competition from the international markets.
Improving local capacities and the social, economic and environmental
sustainability of agriculture through delivery of technology and services and
strengthening of institutions shall bring in the desired growth in the oilseed
crop economy. This growth will be of immense benefit to the country as oilseeds
are grown mainly in the disadvantaged regions.
(xiv)
1
Introduction
Importance of oilseeds and edible oils in national economy
of India
India is the largest producer of oilseeds in the world and oilseed sector occupies
an important position in the agricultural economy of the country. Oilseeds are
among the major crops that are grown in the country apart from cereals. In
terms of acreage, production and economic value, these crops are second only
to foodgrains. India is the fifth largest vegetable oil economy in the world, next
only to USA, China, Brazil and Argentina, and has an annual turnover of about
Rs 80000 crore. India accounts for 12-15 per cent of oilseeds area, 7-8 per cent
of oilseeds production, 6-7 per cent of vegetable oils production, 9-12 per cent
of vegetable oils import and 9-10 per cent of the edible oils consumption.
With its rich agro-ecological diversity, India is ideally suited for growing all
the major annual oilseed crops. Among the nine oilseed crops grown in the
country, seven are of edible oils (soybean, groundnut, rapeseed-mustard,
sunflower, sesame, safflower and niger) and two are of non-edible oils (castor
and linseed). India ranks first in the production of most of the minor oilseeds
(castor, niger, safflower and sesame). In the case of major oilseeds, India ranks
first in the production of groundnut, second in rapeseed-mustard, and fifth in
soybean. Oilseed crops contribute a significant proportion to the agricultural
GDP. In 2009-10 the area under nine oilseed crops was 26.11 M ha with
production of 24.88 Mt, and the total edible oils production in the country
stood at 6.17 Mt. India’s oilseed and edible oil sector is being increasingly
exposed to international markets and the influence of policy options like the
minimum support price and other market intervention policies have not been
able to generate the desired changes commensurating with the needs and target.
The productivity trends in annual edible oilseeds have shown considerable
variability in response to the prevailing policy environment and priority
considerations in India.
Following the constitution of Technology Mission on Oilseeds (TMO) in
1986, India’s oilseed production surpassed the target of 18 Mt, fixed for the
Seventh Five-Year Plan with an impressive annual growth rate of nearly 6 per
cent in the short-run. The subsequent achievement of near self-sufficiency in
edible oils during the early 1990s proved to be a temporary phenomenon as the
country began to depend heavily on imports from the later part of the decade to
Chapter 1
2
meet its domestic edible oil requirement. India’s import bill for edible oils was
more than Rs 26,485 crore during 2009-10 (Agricultural Statistics at a Glance,
2010).
The quantity of edible oils imported also shows an increasing trend. Edible
oil-import increased from 4.9 Mt in 2007-08 to 8.1 Mt during 2009-10. The
continued dependence on imports to meet the edible oils demand acts as a
significant drain on foreign exchange reserves of the country. The lack of
domestic availability of edible oils has got implications for nutritional security
also. The per capita consumption of edible oils at 12.7 kilogram per annum is
well below the world average of 23.46 kg/ annum. Imports of edible oils were
liberalized during 1996-97. This policy of liberalization stemmed, as much from
the lack of self-sufficiency in domestic edible oil production as from the
commitments under the new multilateral trade regime under WTO.
Consequently, cropping patterns in the country also changed after liberalization
of edible oil imports in 1996-97.
A wide range of other minor oilseeds of horticultural and forest origin,
including in particular coconut and oil-palm, are also grown in the country. In
addition, substantial quantities of vegetable oils are also obtained from rice
bran and cotton seed along with a small quantity from tobacco seed and corn.
The oilseeds area and output are concentrated in the central and southern parts
of India, mainly in the states of Madhya Pradesh, Gujarat, Rajasthan, Andhra
Pradesh and Karnataka. Among different annual oilseeds, groundnut, rapeseed-
mustard and soybean together account for about 80 per cent of oilseeds area
and 87 per cent of oilseeds production in the country (2008-09).
The demand for both edible and non-edible oils is increasing due to different
contributing factors like rising income, growing population and expanding
urbanization. As a result, there is an overall decline in the per capita availability
of edible oils. The domestic demand for vegetable oils and fats has been rising
rapidly at the rate of 6 per cent per annum, but our domestic output has been
increasing just by about 2 per cent per annum. The twin factors of rising demand
and declining per capita availability invariably lead to higher prices of edible
oils. Despite the premier position country holds in the global oilseed scenario,
the actual productivity of oilseeds is very low. The average yields of most oilseeds
in India are extremely low as compared to those prevailing in other countries
of the world. The average groundnut yield in India is 1.18 tonnes per hectare.
On the other hand in USA and China groundnut yield ranges between 3 and 4
tonnes per hectare. Similarly, in the case of rapeseed-mustard the average yields
in India are around 1 tonne per hectare, whereas in many other countries like
Germany and France, the average yields range between 3 and 4 tonnes per
hectare.
3
In India, the cultivation of oilseeds is in high risk regions where there are
uncertain returns on investments. They are mostly grown in dryland areas which
are characterized with scanty and uneven rainfall, poor soil health, etc. It has
resulted in a high degree of variation in production of oilseeds annually. The
previously-evolved varieties have failed to bring the desired effect in production
of oilseeds. Such poor performance is further aggravated by the lack of any
technological breakthrough in developing high-yielding varieties (HYVs) of
oilseeds. There is lack of supply of quality seeds due to constraints in their
large-scale production. Also, farmers are hesitant to adopt improved varieties
of seeds; it requires high doses of fertilizers and pesticides, which require high
investment. Thus, there is a kind of virtual stagnation in the yield levels of most
oilseed crops.
The present scenario calls for some urgent measures to be taken to step-up
oilseeds production on a sustainable basis since the growth in oilseeds production
has not kept pace with their increasing domestic demand. Exploiting the
emerging technologies and intensifying the use of land seem to be the feasible
options, when there are limited chances of area expansion. Introduction of
HYVs and development of genotypes will provide tailor-made vegetable oils
for the edible and industrial oils market. The post-WTO era, necessarily demands
adoption of a cohesive strategy to increase production of oilseeds in the country,
by both area expansion and productivity enhancement. To make the production
more lucrative, more value addition to oilseeds and oils is required. On-farm
demonstrations and adoption of improved technologies need to be embraced
to get higher recovery of oils and higher recovery of oil through efficient
processing methods. Also, oilseeds and their various products need lucrative
and improved domestic marketing. Despite liberalized trade in the Indian oilseed
economy, continuous policy intervention heralds production, trade and
processing of oilseeds in India. In order to make these crops economically
superior and cost-effective, yield-boosting technologies need to be developed.
Policy change is likely to play key role in achieving the desired growth and
composition of India’s oilseed and product trade.
Oilseed economy of India: Concerns and issues
The oilseed economy of the country faces a host of challenges on technological,
institutional and policy fronts. The capability in designing and implementing
innovative approaches to adequately address each of these challenges will
determine the future of the oilseed economy of India. Oilseed cultivation in
India is predominantly dependent on rainfall and this leads to a higher magnitude
of instability in production of oilseeds. Often, the marginal lands are earmarked
for cultivation of oilseed crops. Such inherent disadvantages ensure that a level-
playing field is not provided to the oilseed crops even when they are being
4
compared increasingly with their competing crops in terms of production,
productivity and profitability. The country’s population is accustomed to cheap
vegetable oils due to the invisible and visible subsidies in the supply side which
have been in existence for quite a long time. The unviable nature of some of
these subsidies means that they will have to be withdrawn, at least partially in
the near future. This will translate into higher retail prices of edible oils at the
consumer end of the edible oil value chain, unless and until the supply-side
constraints are addressed in a focused manner. Current per capita vegetable oil
consumption in India is much higher than that recommended by nutritionists.
This calls for a serious thinking on the implementation of programmes to
increase awareness about adequate levels of vegetable oil consumption,
especially at a time when domestic supply demand mismatch is affecting national
self-sufficiency in edible oil production.
A major concern for the policy planners involved in ensuring the domestic
availability of edible oils is the fact that domestic prices of oilseeds and vegetable
oils is too un-remunerative to enthuse farmers for intensive oilseeds cultivation.
The income terms of trade for the oilseed cultivators vis-a-vis farmers cultivating
other crops need to be balanced. The diversion of vegetable oils for the
production of biodiesel is another emerging issue, albeit of manageable
proportions as on date, but with a potential to redrawing the planning horizon
and adversely impacting predicted levels of edible oils availability.
Another concern for oilseed cultivators in particular is the lack of availability
of quality seed material of improved cultivars. Though the National Agricultural
Research System (NARS) has developed several varieties with high yield-
potential and varieties suited for specific farming situations, quality seeds of
these varieties are in short supply. The timeliness in making available quality
seeds is also of critical importance as the window for sowing the crops tend to
be of short duration. A related but derivatively different constraint associated
with oilseed cultivation is that some of the best nationally released varieties do
not find recommendations at the state level. The cause of the problem may lie
in the existing weak research-extension linkages for oilseed crops at the national
and state levels, and the mitigation of this particular constraint should be given
due importance in any programme which aims to enhance the production and
productivity of oilseed crops in the country.
Inadequate and imbalanced crop nutrition, the slow pace in bridging the
yield gap and lack of adoption of the appropriate agronomic practices and
available technologies are some of the key issues related to the production of
oilseed crops. It is unfortunate that the level of production that is achievable
with the available technology is not being realized due lack of adoption of
technologies by the oilseed cultivators.
5
The processing sector is integral to the oilseed sector. A vibrant and efficient
processing sector is a pre-requisite for the optimum growth and development of
oilseed economy. India’s oilseed processing sector has been plagued by a slew
of technological and policy issues culminating in the existence of a processing
sector low in efficiency and capacity utilization. If the oilseed cultivators have
to be linked in an economically viable and sustainable manner to the oilseed
value chain, the role of oilseed processing units cannot be underestimated. The
market intervention policies of the past have not only failed to produce the
desired results and effects, but have also created an atmosphere of uncertainty.
The absence of a cohesive policy on market interventions has hurt the interest
of oilseed cultivators and traders alike. Hence, an issue which requires serious
examination is the role and nature of market interventions as a tool for achieving
the pre-determined objectives. Similar to the case of market interventions is the
issue of external trade policies vogue for oilseeds and edible oils.
The fluctuating and counter directional policies with respect to imports
and exports have left the stakeholders unsure of the long-term strategies they
should opt and this ultimately hurts the interest of the nation. The outcome of
such market interventions and trade policies was distortion and introduction of
inefficiencies in the price discovery process and ultimately affecting the relative
price structure of oilseeds and their derivatives with respect to their competing
crops and produce. The impact of oilseed and edible oil import and export
policy on consumers, farmers and industry needs to be understood in this context.
The lack of understanding of the dynamics of various economic forces in
operation due to the policy shifts is an important issue as far as the oilseed
economy of the country is concerned.
Another issue of prominence in the oilseed economy of India is the potential
and means to optimally utilize this potential for augmenting the domestic edible
oil availability from the secondary sources. This requires policy interventions
in the form of price signals and other incentives. An area which requires critical
thinking and analysis is the role of non- traditional crops in the edible oil
economy of the country. In face of several constraints that exist in the spread of
non-traditional crops, it must be remembered that they can still play a significant
role provided an enabling policy framework is in place. Thus, augmenting edible
oil availability from the secondary and non-traditional sources can reduce
pressure on the traditional oilseed crops for technological breakthroughs at a
fast pace.
Managing price, income and production risks in oilseed cultivation is an
area where little attention has been paid in the past. This scenario needs to be
changed. There is a growing realization that successful management of the risk
elements in crop production and marketing is vital for the stakeholders to
continue cultivation of the oilseed crops. Forward looking policies on mitigation
6
of various kinds of risks in oilseed cultivation is a critical ingredient for a healthy
oilseed economy. All options for such risk mitigation like future markets, buffer
stock operations, other commodity price stabilization schemes, etc. need to be
explored for oilseeds.
The emerging scenario for oilseeds is fluid with fast paced changes amongst
a mosaic of technologies, policies and trade interventions and scenarios. A
systematic study of these issues will be of immense help in formulating
appropriate strategies for achieving pre-determined targets with respect to
domestic oilseed and edible oil production.
Scope and objectives of the study
The oilseed economy of India is quite complex with a multitude of stakeholders
in the form of oilseed cultivators, processors, consumers, and intermediaries
across the oilseed value-chain. The government is also a stakeholder with welfare
of the different categories of stakeholders as its prime interest. Such a complex
scenario needs to be studied in depth to arrive at valid and useful conclusions
which may enable effective policy interventions. With this background, a study
to ascertain the present and future edible oil needs of the country, current
production and its deficiencies, yield position, trade in oilseeds and edible oils
and its impact on the economy was formulated. The study aimed to assess the
demand and supply scenario of oilseeds and edible oils in the country and to
suggest measures to increase the production of oilseeds to make the country
self-reliant in edible oil production. For this, following objectives were framed:
● To study the temporal and regional trends in production and productivity
of major oilseed crops, yield gaps, production constraints, and seed
availability in the country.
● To examine trends in the consumption of edible oils in the country and
assess demand–supply gap.
● To examine trade pattern and polices of edible oils and its impact on the
oilseed economy of the country.
● To suggest suitable policy options to increase oilseed productivity and bridge
demand-supply gap.
7
Trends in Production and Productivity
of Oilseds in India
Oilseeds production and productivity scenario
There have been dramatic changes in the oilseeds scenario in the country since
the implementation of Technology Mission on Oilseeds (TMO) in 1986.
In order to examine the temporal trends in area, production and productivity
of major oilseeds crops, time series secondary data was collected, depicted
(Figure 1) and analyzed.
The area, production and productivity of oilseeds grew with the compound
annual growth rates of 1.58 per cent, 3.05 per cent and 1.45 per cent, respectively
during the period 1950-2009. Instability in area, production and productivity
of oilseeds has been computed using coefficients of variation. Maximum
variability has been observed in the case of production (54.81 %), followed by
productivity (28.65 %) and area (27.45 %) of oilseeds during the period 1950-
2009.
The production of the nine oilseeds jumped from 9 Mt in 1980 to more
than 27 Mt in 2009 with an annual growth rate of 3.53 per cent per annum
(Table 1). During this period, area and productivity of the nine oilseeds registered
the annual growth rates of 1.46 per cent and 2.05 per cent per annum,
respectively. The growth rate in area expansion ranged from -5.27 per cent in
linseed to 10.73 per cent in soybean. The production growth rate ranged from
Figure 1. Trends in area, production and yield of nine oilseeds in India
Chapter 2
8
Tab
le 1
. P
erio
d-w
ise
gro
wth
rate
s (%
) in
are
a,
pro
du
ctio
n a
nd
yie
ld o
f d
iffe
ren
t o
ilse
ed c
rop
s at
all
-In
dia
lev
el:
1980-8
1 t
o 2
009-1
0
Oil
seed
cro
p
Are
a (
M h
a)
P
rod
uct
ion
(M
t)
Yie
ld (
kg /
ha)
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
toto
toto
toto
toto
toto
toto
19
89
-90
19
99
-00
2009-1
02
00
9-1
0 1
989-9
0 1
999-0
0 2
009-1
02
00
9-1
0 1
989-9
0 1
999-0
0 2
009-1
02
00
9-1
0
Gro
un
dn
ut
0.6
8-2
.15
-1.0
8-0
.75
**
2.2
2-0
.35
1.6
90
.46
1.5
31
.84
2.8
01
.21
**
Rap
esee
d-m
ust
ard
1.7
72
.18
2.8
41
.87
**
7.7
21
.94
4.9
74
.25
**
5.8
4-0
.23
2.0
82
.34
**
So
ybea
n17.4
112.0
34.9
610.7
3**
17.8
014.8
17.1
212.7
3**
0.3
32.4
82.0
61.8
1**
Su
nfl
ow
er3
1.4
21
.38
5.6
76
.63
**
25
.73
2.3
98
.24
7.6
4**
-4.3
31
.00
2.4
30
.94
**
Ses
am
e@
-1.0
6-4
.91
1.2
8-1
.66
**
2.9
0-4
.23
4.0
20
.78
*4
.00
0.7
22
.70
2.4
8**
Cast
or@
2.2
5-0
.18
-1.8
11
.48
**
2.9
05
.21
2.6
35
.00
**
4.0
00
.72
2.7
02
.48
**
Saff
low
er@
3.2
7-3
.49
-2.8
1-3
.51
**
3.6
1-3
.96
-1.0
0-3
.08
**
0.3
4-0
.49
1.8
50
.45
Lin
seed
@-4
.99
-4.1
9-4
.97
-5.2
7**
-1.9
0-2
.53
-4.6
2-3
.50
**
3.2
41
.74
0.3
71
.86
**
Nig
er@
0.7
5-1
.80
-1.7
1-1
.36
**
3.1
5-2
.52
-2.2
8-1
.26
**
2.3
8-0
.73
-0.5
80
.10
Nin
e o
ilse
eds
1.9
81
.04
2.1
31
.46
**
4.6
93
.11
4.6
23
.53
**
2.6
62
.06
2.4
42
.05
**
Co
con
ut $ #
3.0
02
.95
0.7
72
.43
4.0
23
.89
2.0
83
.75
0.9
90
.91
1.3
01
.29
** S
ign
ific
an
t at
1%
, *
sign
ific
an
t at
5%
an
d @
1980-8
1 t
o 2
007-0
8, $ 1
980-8
1 t
o 2
008-0
9#P
rod
uct
ion
in
hu
nd
red
mil
lio
n n
uts
an
d y
ield
as
nu
ts/
hec
tare
Source:
Base
d o
n d
ata
of
Dir
ecto
rate
of
Eco
no
mic
s an
d S
tati
stic
s, G
over
nm
ent
of
Ind
ia,
New
Del
hi.
9
-3.50 per cent in linseed to 12.73 per cent in soybean. Castor, sunflower and
rapeseed-mustard also exhibited a healthy growth rate in respective production.
The productivity growth rate ranged from 0.10 per cent in niger to 2.48 per cent
in both sesame and castor. Table 1 clearly indicates that most of the growth
rates in area, production and productivity were statistically significant during
the period 1980-2009. The area expansion was highest in soybean despite low
productivity, primarily due to the economic superiority of soybean over other
corps and its cultivation in fallow land. In order to understand the decadal
growth pattern in the oilseed sector, period-wise annual growth rates were
computed.
Figure 2. Trends in area expansion in various oilseeds
On overall basis, there was a decline in the annual growth rates of area,
production and productivity of oilseeds during 1991-2000 as compared to 1981-
1990. The positive trend during the 1980s could be due to government initiatives
in the form of TMO as well as price and marketing support for oilseeds growers.
The reverse trend during the 1990s may be due to opening up of imports and
exports of agricultural commodities. As a result the total oilseed production
increased from 9 Mt to 18 Mt between 1980-81 and 1990-91. During this period,
soybean demonstrated the highest growth rate in area and production, viz. 17.41
per cent and 17.80 per cent, respectively. During 1990-2000, the pace of growth
in area, production and productivity of all the nine oilseeds fell to 1.04 per cent,
3.11 per cent and 2.66 per cent, respectively; this was mainly due to decrease in
oil prices relative to other crops and liberalization of edible oil imports in 1996-
97. The government price support mechanism has continuously favoured wheat
and rice crops and not the oilseeds crops, which has led to lowered oilseed
cultivation. The area, production and productivity of coconut grew with the
compound annual growth rates of 2.43 per cent, 3.75 per cent and 1.29 per
cent, respectively during the period 1980-2009 (Refer Table 1).
10
Regional variations in oilseeds production
There has been a wide regional variation in area, production and productivity
of oilseeds during the past three decades. Table 2 reveals that the country as a
whole recorded 2.36 per cent, 5.09 per cent and 2.67 per cent growth rates in
area, production and productivity respectively, during the period 1980-2009.
Among the major states Rajasthan, Madhya Pradesh and Maharashtra exhibited
the healthy growth rate in area, production and productivity during 1980-2009.
Table 2 also reflects that Rajasthan registered highest annual growth rates in
area (4.92 %), production (8.30 %) and productivity (3.22 %) among the major
oilseeds producing states during this period. Andhra Pradesh recorded a
negligible annual growth rate of 0.52 per cent in productivity, while Karnataka
showed a negative growth rate of -0.08 per cent in productivity during 1981-
2009. The percentage change in area, production and productivity of oilseeds
crops after 1986 for the major states shows that only a few states like Haryana,
Madhya Pradesh, Maharashtra, Rajasthan and West Bengal increased their
oilseeds production through both area as well as productivity improvement
(Table 6). Gujarat increased its oilseeds production mainly through productivity
improvement. In some states like Punjab and Assam, oilseeds production
declined mainly due to decline in their area, while in Odisha, both area and
productivity declined sharply, leading to a large decline in oilseeds production.
The cropping pattern in many states has undergone changes which were
pertinent to oilseed crops as well. The relative importance of oilseed crops has
increased in many states during 1985-86 to 2008-09 (Table 7). Soybean which
was fifth in terms of area during 1985-86 in Madhya Pradesh, occupied the first
place in 2008-09. During the same period, rapeseed-mustard moved from the
fourth rank to second place in terms of area in Rajasthan. In the case of Gujarat,
groundnut which had occupied the first position with respect to area was replaced
by cotton in the 2008-09. During this period, soybean in Maharashtra, and
rapeseed-mustard in Haryana occupied the place among top five crops of the
states in terms of acreage. In Karnataka, sunflower became an important crop
replacing crops like pearl millet and cotton. The area expansion in oilseeds
during the past two decades was possible mainly because of replacement of
non-remunerative crops like millets and minor food crops and partly from
increase in cropping intensity.
Trends in major oilseed crops
Soybean
India ranks fifth in production (10 Mt) of soybean in the world. It is a kharif-
crop, grown predominantly in the states of Madhya Pradesh, Maharashtra and
Rajasthan. The crop gained importance in India as a source of protein and
11
Tab
le 2
. P
erio
d-w
ise
gro
wth
rate
s (%
) in
are
a,
pro
du
ctio
n a
nd
yie
ld o
f n
ine
oil
seed
cro
ps
for
majo
r o
ilse
eds-
pro
du
cin
g s
tate
s o
f
Ind
ia:
1980-8
1 t
o 2
008-0
9
Sta
te
Are
a (
M h
a)
P
rod
uct
ion
(M
t)
Yie
ld (
kg /
ha)
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
toto
toto
toto
toto
toto
toto
19
89
-90
19
99
-00
2008-0
92
00
8-0
91
98
9-9
01
99
9-0
0 2
008-0
92
00
8-0
9 1
989-9
0 1
999-0
0 2
008-0
92
00
8-0
9
Raja
sth
an
8.3
04
.63
6.2
54
.92
14
.54
6.1
91
0.2
88
.30
5.7
61
.49
3.7
93
.22
Mad
hya P
rad
esh
5.9
76
.43
1.0
44
.55
11
.74
9.6
63
.89
8.0
55
.44
3.0
42
.83
3.3
4
Gu
jara
t-1
.44
0.6
62
.55
1.1
3-2
.68
5.2
37
.24
2.9
1-1
.26
4.5
44
.58
1.7
7
Mah
ara
shtr
a3.2
50.0
94.7
01.6
83.8
03.1
76
.14
4.8
60
.54
3.0
81
.38
3.1
3
An
dh
ra P
rad
esh
3.7
6-1
.53
0.1
00
.87
6.5
1-2
.49
2.2
51
.39
2.6
6-0
.97
2.1
40
.52
Karn
ata
ka
8.7
7-1
.30
3.5
11
.70
9.6
3-0
.43
1.1
91
.62
0.7
80
.88
-2.2
4-0
.08
Tam
il N
ad
u1
.46
-1.7
8-4
.51
-2.0
23
.70
2.6
4-3
.41
0.5
22
.21
4.4
91
.15
2.5
9
Oth
er s
tate
s-2
.71
-3.1
91
.09
-1.3
71
.91
-3.3
78
.02
0.6
14
.76
-0.1
96
.85
2.0
1
All
-In
dia
1.4
71
.81
1.0
42
.36
3.5
74
.42
3.1
15
.09
2.0
62
.57
2.0
62
.67
Source:
Base
d o
n d
ata
of
Dir
ecto
rate
of
Eco
no
mic
s an
d S
tati
stic
s, G
over
nm
ent
of
Ind
ia,
New
Del
hi.
12
edible oil and was introduced for cultivation around 1980s, until then it was
grown in small amounts in the hills of northern India. The technological
breakthrough, backed by policy support led to large shifts in crop patterns. All
India Coordinated Research Project (AICRP) played a critical research &
development role in evolving suitable varieties of soybean and product utilization
as food for human and feed for cattle. As is evident from Table 3, soybean
production in the country recorded a positive growth rate during 1980-2009.
The rate of growth in production is estimated to be around 12 per cent at all-
India level, whereas at the state level, it was 25.77 per cent for Maharashtra and
21.17 per cent for Rajasthan. The increase in production was mainly due to
significant expansion in area during 1981-1990, viz.16.71 per cent. Madhya
Pradesh recorded a significant decline in the yield rates of soybean in the same
period (-0.49 %). This was because of lesser use of improved seeds and bringing
of more marginal land under soybean cultivation. However, there was a positive
growth in yield rates in subsequent decades. There was a significant decline in
the growth rates of area (3 %) and production (6.91 %) during 2001-09 in
Rajasthan. The establishment of National Research Centre for soybean at
Indore, Madhya Pradesh and AICRP on soybean as well as the political and
financial support from the central and state governments together with private
sector investment in soybean utilization and marketing led to a rapid increase
in soybean cultivation. Thus, major expansion took place in Madhya Pradesh
accounting for 55.80 per cent of area under soybean cultivation. Madhya
Pradesh along with Maharashtra and Rajasthan account for more than 95 per
cent of the area under cultivation and production of soybean in the country.
Rapeseed-mustard
India ranks second both in the production (6.82 Mt) as well as in the area under
cultivation (6.27 M ha) of rapeseed-mustard in the world. Rapeseed-mustard is
a rabi crop predominantly grown in the states of Rajasthan, Uttar Pradesh,
Madhya Pradesh and Haryana. These states together contribute 4.90 M ha of
the area and produce 5.60 Mt of rapeseed-mustard. It is mainly used as edible
oil and medicine for burning. Its use is limited for industrial purposes owing to
high cost. The area, production and productivity of rapeseed-mustard grew
with the compound annual growth rates of 1.88 per cent, 4.18 per cent and
2.26 per cent, respectively during 1980-2009 (Table 4). As is evident from Table
4, Rajasthan is the leading rapeseed-mustard producing state though its share
has declined in recent years. The production, area and yield of rapeseed-mustard
seed experienced a significant growth from 1985-1995, primarily due to the
increase in irrigated land and the availability of high-yielding seeds in the
country. This trend was partly reversed due to intermittent famine conditions
in some of the major rapeseed-mustard producing states, such as Rajasthan.
Both area and output fell from 12.98 per cent in 1981-90 to 5.79 per cent in
13
Tab
le 3
. P
erio
d-w
ise
gro
wth
rate
s (%
) in
are
a,
pro
du
ctio
n a
nd
yie
ld o
f so
yb
ean
cro
p-p
rod
uci
ng s
tate
s: 1
980-8
1 t
o 2
008-0
9
Sta
teA
rea (
M h
a)
Pro
du
ctio
n (
M t
)Y
ield
(kg /
ha)
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
toto
toto
toto
toto
toto
toto
19
89
-90
19
99
-00
20
08
-09
20
08
-09
19
89
-90
1999-0
0 2
008-0
92
00
8-0
91
98
9-9
0 1
999-0
0 2
008-0
92
00
8-0
9
Mad
hya P
rad
esh
18
.02
10
.54
1.0
29
.75
17
.44
12
.84
3.8
61
1.2
9-0
.49
2.0
82
.82
1.4
0
Mah
ara
shtr
a13.9
923.3
213.8
619.4
631.1
029.7
212.1
225.7
715.0
15.1
9-1
.53
5.2
8
Raja
sth
an
38.7
717.9
63.0
018.5
446.8
020.6
46.9
121.1
75.7
82.2
73.8
02.2
2
Oth
er s
tate
s-5
.25
-4.1
35
.25
2.5
4-2
.01
-3.6
09
.10
3.7
43
.43
0.5
63
.66
1.1
6
Ind
ia1
6.7
18
.06
5.9
39
.72
19
.56
9.5
18
.98
11
.67
2.4
41
.34
2.8
81
.77
Tab
le 4
. P
erio
d-w
ise
gro
wth
rate
s (%
) in
are
a,
pro
du
ctio
n a
nd
yie
ld o
f m
ajo
r ra
pes
eed
-mu
stard
cro
p-p
rod
uci
ng s
tate
s: 1
980-8
1
to 2
008-0
9
Sta
teA
rea (
M h
a)
Pro
du
ctio
n (
Mt)
Yie
ld (
kg /
ha)
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
toto
toto
toto
toto
toto
toto
19
89
-90
1999-0
0 2
008-0
92
00
8-0
91
98
9-9
0 1
999-0
0 2
008-0
92
00
8-0
91
98
9-9
0 1
999-0
0 2
008-0
92
00
8-0
9
Raja
sth
an
12
.98
5.7
97
.52
6.1
71
5.1
15
.14
10
.79
7.9
61
.88
-0.6
23
.04
1.6
9
Utt
ar
Pra
des
h-9
.97
0.3
2-2
.17
-2.7
5-5
.12
-0.1
2-0
.12
0.0
05
.39
-0.4
42
.09
2.8
2
Hary
an
a5
.93
4.3
04
.62
3.3
11
0.2
13
.70
6.8
75
.43
4.0
4-0
.57
2.1
42
.05
Mad
hya P
rad
esh
6.3
51
.22
3.7
33
.98
13
.05
1.1
83
.12
6.6
16
.30
-0.0
4-0
.59
2.5
3
Oth
er s
tate
s5.3
7-2
.83
1.2
60
.92
9.9
3-2
.23
3.2
02
.25
4.3
30
.61
1.9
21
.32
Ind
ia0
.93
2.1
83
.87
1.8
85
.87
1.9
46
.24
4.1
84
.89
-0.2
32
.28
2.2
6
Source:
Base
d o
n d
ata
of
Dir
ecto
rate
of
Eco
no
mic
s an
d S
tati
stic
s, G
over
nm
ent
of
Ind
ia,
New
Del
hi.
14
1991-2000 and 15.11 per cent in 1981-90 to 5.14 per cent in 1991-2000,
respectively. The growth rate in production bounced back to 10.79 per cent in
2001-09 as growth in yields and the total area under cultivation increased to
3.04 per cent and 7.52 per cent, respectively.
Groundnut
India ranks first in acreage occupying 6.17 M ha of area under cultivation and
second in production of groundnut producing 7.29 Mt in the world, after China
(13.58 Mt). In India, groundnut is predominantly grown in the states of Gujarat,
Andhra Pradesh, Karnataka and Tamil Nadu. In terms of area, Gujarat ranked
first with 31 per cent of area under cultivation during 2009-10, followed by
Andhra Pradesh (27.09 %), Karnataka (13.94 %) and Tamil Nadu (8.52 %).
Similarly, in production, Gujarat ranks first with 34.9 per cent, followed by
Andhra Pradesh (23.08 %), Tamil Nadu (14.31 %) and Karnataka (7.60 %).
These states account for around 80 per cent of area and production of groundnut
in the country. The country registered the negative annual growth rates of 0-.66
per cent in area, 0.54 per cent in production and 1.21 per cent in productivity of
groundnut during 1981-09 (Table 5). During the period 1981-90, among the
major groundnut-producing states, Gujarat was the only state which recorded a
significant decline in area, production and productivity, the respective growth
rates being -3.92 per cent, -5.62 per cent and -1.77 per cent. However, after
1990, there has been a consistent increase in area, production and productivity
of groundnut in Gujarat. Both Tamil Nadu and Karnataka have shown a
decreasing trend in area and output of groundnut. The current productivity of
groundnut is more than a tonne per hectare. In India, the on-farm demonstrations
carried out jointly by Indian Council of Agricultural Research (ICAR) and
International Crops Research Institute for Semi-Arid Tropics (ICRISAT),
comparing local cultivators and local practices with improved cultivators and
improved production technology, have contributed to the increased productivity
of groundnut. The groundnut crop recorded a significant decline in area and
production during the period 1991-2000. The growth rates in area under
cultivation (-2.15 %), production (0-.35 %) and productivity (1.84 %) are lowest
during this decade, this was mainly due to the gradual replacement of groundnut
crop by cotton, soybean and sunflower. The droughts and insufficient monsoon
rains also affected the production and productivity of groundnut. Gujarat was
the only state that exhibited a marginal positive growth in area (0.15 %) and
impressive growth in production of groundnut during 1991-2000.
International oilseeds productivity—A comparison
India contributes approximately 50 per cent share to the total area under
cultivation in Asia for major oilseeds, namely groundnut, soybean and rapeseed-
15
Tab
le 5
. P
erio
d-w
ise
gro
wth
rate
s (%
) in
are
a,
pro
du
ctio
n a
nd
yie
ld o
f m
ajo
r g
rou
nd
nu
t cr
op
-pro
du
cin
g s
tate
s: 1
980-8
1 t
o 2
008-0
9
Sta
te
A
rea (
M h
a)
P
rod
uct
ion
(M
t)
Y
ield
(kg /
ha)
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
19
80
-81
19
90
-91
20
00
-01
19
80
-81
toto
toto
toto
toto
toto
toto
19
89
-90
1999-0
0 2
008-0
92
00
8-0
91
98
9-9
0 1
999-0
0 2
008-0
92
00
8-0
91
98
9-9
0 1
999-0
0 2
008-0
92
00
8-0
9
Gu
jara
t-3
.92
0.1
50
.16
-0.1
8-5
.62
6.1
09
.71
2.1
5-1
.77
5.9
49
.54
2.3
4
An
dh
ra P
rad
esh
4.5
5-2
.52
-1.1
10
.27
6.0
1-3
.26
-0.3
30
.11
1.4
0-0
.76
0.7
8-0
.17
Tam
il N
ad
u1
.64
-1.7
4-4
.45
-2.0
23
.17
2.5
2-3
.97
0.5
01
.51
4.3
40
.50
2.5
8
Karn
ata
k4
.08
-1.0
4-2
.29
0.2
46
.78
-0.3
0-5
.64
0.0
22
.59
0.7
6-3
.44
-0.2
3
Oth
er s
tate
s-0
.07
-5.3
30
.01
-2.2
12
.98
-5.5
42
.55
-1.2
43
.05
-0.2
22
.53
0.9
9
Ind
ia0
.95
-2.1
5-1
.06
-0.6
62
.82
-0.3
51
.67
0.5
41
.85
1.8
42
.75
1.2
1
Source:
Base
d o
n d
ata
of
Dir
ecto
rate
of
Eco
no
mic
s an
d S
tati
stic
s, G
over
nm
ent
of
Ind
ia.
16
mustard, while its respective shares in world area are 27 per cent, 20 per cent
and 10 per cent (Table 8). Though India occupies a premier position in the
global oilseeds scenario, its average yield for major oilseeds is 40-60 per cent
below the world average and has been growing at a slow pace (Table 9). Most
oilseeds are grown by small-scale, limited-resource farmers in areas that are
dependent on erratic monsoon rainfall, with only about 26-28 per cent of oilseed
area irrigated. Faced with considerable weather-related risks, oilseed producers
invest little on improved seeds, fertilizers, and pesticides. Oilseed farmers also
face considerable price risk because the minimum support prices set for oilseeds
are typically either too low to influence the market prices or are not adequately
defended by government purchases. The productivity difference with the world
average is marked for all the major oilseed crops of the country (Table 9).
Yield Gap Analysis of Major Oilseeds
Meaning of yield gap
It is always a matter of concern for the research managers and development
administrators to ensure that the real potential of any crop variety is harvested
Table 6. Percentage change in area, production and yield of oilseed crops in selected
states of India: TE 1985-86 and 2008-09
State Area Production Yield
Andhra Pradesh 16.89 51.90 28.61
Assam -20.41 -13.64 7.82
Bihar -41.67 4.88 79.77
Gujarat 14.32 119.01 94.22
Haryana 111.24 206.67 47.25
Karnataka 46.29 28.28 -13.66
Madhya Pradesh 131.62 350.38 94.42
Maharashtra 69.51 213.09 84.74
Odisha -66.55 -75.32 -26.19
Punjab -63.16 -51.92 33.26
Rajasthan 156.90 402.62 93.43
Tamil Nadu -40.24 2.11 71.25
Uttar Pradesh -42.95 -1.22 72.35
West Bengal 83.04 194.03 60.76
Others -73.04 -76.94 -14.88
All India 43.14 124.92 57.05
Source: Based on data of Directorate of Economics and Statistics, Government of India,
New Delhi.
17
Table 7. Shift in cropping pattern in selected states of five most important crops
during TE 1985-86 to TE 2008-09
State Year Five most important crops in terms of area
(TE) I II III IV V
Andhra Pradesh 1985-86 Rice Jowar Groundnut Cotton Bajra
2008-09 Rice Groundnut Cotton Maize Gram
Gujarat 1985-86 Groundnut Cotton Bajra Jowar Wheat
2008-09 Cotton Groundnut Wheat Bajra Rice
Haryana 1985-86 Wheat Bajra Gram Rice Cotton
2008-09 Wheat Rice Bajra Mustard Cotton
Karnataka 1985-86 Jowar Rice Groundnut Cotton Bajra
2008-09 Rice Jowar Sunflower Maize Groundnut
Madhya Pradesh 1985-86 Rice Wheat Gram Jowar Soybean
2008-09 Soybean Wheat Gram Rice Maize
Maharashtra 1985-86 Jowar Cotton Bajra Rice Wheat
2008-09 Jowar Cotton Soybean Rice Gram
Rajasthan 1985-86 Bajra Wheat Gram Mustard Jowar
2008-09 Bajra Mustard Wheat Gram Maize
Uttar Pradesh 1985-86 Wheat Rice Gram Mustard Maize
2008-09 Wheat Rice Bajra Maize Mustard
West Bengal 1985-86 Rice Jute Wheat Mustard Sesame
2008-09 Rice Jute Mustard Wheat Sesame
Source: Based on data of Directorate of Economics and Statistics, Government of India, New Delhi.
Note: Oilseed crops are set in bold.
at the farmers’ field. In reality, however, a gap always prevails between what is
projected as the potential yield of any variety at research station and what is
obtained on organized farm trials and further what is harvested by the farmers
themselves. Technically, this is referred as yield gaps of different types. The
yield gap is defined as the difference between the maximum-attainable yield
and the farm-level yield. This may be further defined in the following ways.
Maximum attainable yield is the yield of a crop variety on the research farm
plot with no physical, biological or economic constraints and with the best known
management practices at a given time and in a given ecology. Attainable yield
is the maximum yield that a sample farmer can achieve by following most of
the technologies that are possible and known to the farmer and with the
maximum efforts. Attainable yield is obtained by the farmer with his experience
and knowledge. Farm-level yield is the average farmer’s yield in a given target
area at a given time and in a given ecology. Anticipated yield is the yield
anticipated by the farmers based on the actual efforts and technology followed
18
Table 8. Percentage share of India in area and production of oilseeds in Asia and
World: 2008-09
Oilseed crops % Share to Asia % Share to World
Area Production Area Production
Soybean 47 38 10 5
Rapeseed-mustard 45 34 20 12
Groundnuts (with shell) 51 30 27 20
Sunflower seed 37 24 8 4
Sesame seed 41 30 24 19
Castor seed 78 84 58 73
Linseed 44 23 21 8
Safflower seed 71 65 46 35
Coconut 21 21 17 18
Source: FAOSTAT
Table 9. Productivity of oilseeds: A comparison of India and world average (tonnes/
hectare): 2008-09
Oilseed crop India World Indian share in Highest productivity
average world (%)
Volume Country
Soybean 1.01 2.35 43.0 2.74 U.S.A.
Sunflower 0.62 1.25 49.6 1.75 China, PR
Linseed 0.34 0.84 40.5 1.17 EU-27
Cottonseed 0.94 1.24 75.8 2.52 Australia
Rapeseed 0.96 1.71 56.1 3.00 EU-27
Castor seed 1.08 0.95 113.7 1.08 India
Groundnut 0.68 1.05 64.8 2.53 U.S.A.
Sesame seed 0.38 0.45 84.4 1.00 China, PR
Source: FAOSTAT
by the farmers best known to them. Observed/actual yield is the actual yield
realized by the farmer.
Typology of yield gap
The methodology developed by International Rice Research Institute (IRRI)
has been followed to estimate the magnitude of yield gaps, wherein potential
yield, farm yield and farmers’ yield are defined as yield obtained on research
stations, demonstration plots and farmers’ fields, respectively. The yield gap is
19
the difference between potential yield and actual yield. It can be decomposed
into two parts, viz. Yield Gap I and Yield Gap II. Yield gap I is the difference
between experimental stations average attainable maximum yield (at least two
different locations and varieties under cultivation) and on-farm experiments
average maximum yield. This yield gap arises from differences in environment
that cannot be managed in the farmers’ fields. Yield gap II, which is of primary
concern for the present study is the difference between yield attained in on-
farm experiments and the average actual farm yield. This gap reflects the effects
of biological, soil and water, physiological, genetic and socio-economic
constraints. This gap exists because farmers use suboptimal doses of inputs and
cultural practices. It is manageable and narrowed by increasing efforts in research
and extension services, as well as by appropriate government intervention,
particularly in institutional issues. In practice, yield gaps are also classified
according to constraints, such as.
1. Agronomic gap: mainly due to biological and partly due to physical
constraints
2. Socio-economic gap: mainly due to socio-economic constraints
3. Institutional gap: mainly due to institutional constraints
4. Mixed gap: due to the above constraints. In this case, the socio-economic
and institutional constraints should be solved before the agronomic gaps
can be narrowed using improved technological packages.
Factors of yield gap
The factors causing yield gaps can be classified according to their nature and
the degree to which they contribute to the gaps:
1. Biophysical or Agronomic gap: mainly due to biological and partly because
of physical constraints such as climate/weather, soil, water, weeds.
2. Technical/Management gap: due to tillage, variety, seed selection, nutrients,
pests, and post-harvest management.
3. Socio-economic gap: due to socio-economic status, farmers’ tradition and
knowledge, family size, household income/expenses/investment.
4. Institutional policy gap: due to government policy, credit, input supply,
land tenure, market research and development, extension.
5. Technology transfer and linkage gap: the competence and facilities of
extension staffs, integration among research, farmers’ resistance to new
technology; knowledge and skills, weak linkage among public, private and
non-governmental extension staff.
20
Measurement of yield gap
In the present study, yield gap I is computed on the basis of potential yield of a
particular variety of specific regions for each crops. It is the gap between potential
yield (PY) of a variety and the yield of improved variety (IV) at the research
station, i.e.
Yield gap I = PY – IV
Gap I (%) = 100PY
IVPY
Similarly, Yield gap II is the difference between the yield of improved variety
at the research station and at farmers’ field, i.e.
Yield gap II = IV – FV
Gap II (%) =
where, PY=Potential yield claimed by breeders, IV=Yield at research station,
and FV= Yield at farmers field. IV and FV are taken from the Front-Line
Demonstration (FLD), a concept of field demonstration evolved by ICAR, with
the inception of Technology Mission on Oilseed (TMO) crops during mid-1980s
(1986). The major objective of FLD is to demonstrate the productivity potentials
and profitability of the latest and improved oilseed production technologies
under real farm conditions. In this study, an attempt was made to assess the
exploitable yield reservoir in case of different oilseeds using FLD data. In order
to remove the year-to-year variations, analysis was carried out by averaging the
data pertaining to the years 2007-08 and 2008-09. Besides, computation of yield
gap I and yield gap II for major and minor states, classification of states according
to their yield and yield gaps, respectively were also done. Different states are
classified into four categories:
1. High Potential, High Gap
2. High Potential, Low Gap
3. Low Potential, High Gap
4. Low Potential, Low Gap
The High-Potential, High-Gap states are those states which have high
potential yields and correspondingly high yield gaps. In order to examine the
change in yield gap position over a decade, gaps were also calculated with the
FLD data pertaining to the year 1999-2000.
21
Assessment of yield gap of major oilseed crops
Rapeseed-mustard
Rapeseed-mustard is the major source of income, especially for the marginal
and small farmers in the rain-fed areas. Because of its low water requirement,
rapeseed-mustard crops fit well in the rainfed cropping system. Current data of
front line demonstration revealed that the yield gap II ranged from 4.68 per
cent (Madhya Pradesh) to 17.71 per cent (Uttar Pradesh) among major oilseeds
growing states, while this gap was as low as 4.22 per cent in Maharashtra and
as high as 56.57 per cent in Odisha among minor oilseeds growing states
(Table 10). Yield gap I for the same period was observed to be 30.31 per cent in
Madhya Pradesh and 56.65 per cent in Uttar Pradesh. These states account for
large acreage under rapeseed-mustard, indicating tremendous untapped
potential. The yield gap II at the national level was observed as 21.01 per cent.
In view of the classification according to potential yield and gaps, Rajasthan,
Haryana, Madhya Pradesh, Gujarat, and Punjab are the states in category of
high potential and low gap. Analysis clearly indicated that yield gap I has
increased, while yield gap II has decreased at the national level over time. This
situation warrants an urgent need to effectively disseminate the improved
rapeseed-mustard technologies among the oilseed growers, so that these gaps
could be narrowed down.
Table 10. Yield gap in rapeseed-mustard growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Major Haryana 7.53 16.01 5.97 10.20 1.56 5.81
Madhya Pradesh 37.74 28.63 30.31 4.68 7.43 23.95
Rajasthan 11.78 10.02 15.77 12.51 -3.99 -2.49
Uttar Pradesh 17.30 22.31 56.65 17.71 -39.35 4.60
Minor Bihar 20.85 23.78 22.11 47.84 -1.26 -24.06
Chhattisgarh 45.19 22.44 54.74 44.76 -9.55 -22.32
Gujarat 26.16 14.68 23.86 14.17 2.30 0.51
Jharkhand 29.78 33.86 45.57 49.37 -15.79 -15.51
Maharashtra - - 65.05 4.22 - -
Odisha 8.35 63.33 33.58 56.57 -25.23 6.76
Punjab 18.11 19.37 20.93 7.40 -2.82 11.97
Uttarakhand 12.81 26.90 59.84 14.24 -47.03 12.66
22
Table 11. Classification of states according to potential yield and yield gap in
rapeseed-mustard
Rapeseed - mustard
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap - - - Bihar 1246 45
- - - Odisha 1096 57
- - - Jharkhandnd 979 49
- - - Chhattisgarh 1063 45
Low gap Rajasthan 1853 13 Uttar Pradesh 1170 18
Haryana 2233 10 Uttarakhand 853 14
Gujarat 1751 14 Maharashtra 664 4
Punjab 1621 7 - - -
Madhya 1881 5 - - -
Pradesh
Groundnut
It was observed from the results of FLD’s data with improved production
technologies that there exists a wide yield gap in groundnut under real farm
situations across groundnut-growing regions of the country. Analysis based on
FLD data showed that the yield gap II was 19.74 per cent at the national level,
ranging from 10.47 per cent in Tamil Nadu to 30.06 per cent in Gujarat. The
yield gap II was observed highest in Gujarat which accounts for the maximum
area under groundnut in the country. This may be due to the adoption of Bt-
cotton by the resource-endowed farmers of the state. At the national level, yield
Table 12. Yield gap in groundnut-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Major Andhra Pradesh - - 50.32 19.10 - -
Gujarat 22.83 13.93 22.92 30.46 -0.09 -16.53
Karnataka 25.76 25.43 37.89 28.18 -12.13 -2.75
Tamil Nadu 3.08 25.55 22.32 10.47 -19.24 15.08
Minor Madhya Pradesh 7.64 33.08 - - 7.64 33.08
Maharashtra 7.94 25.56 48.81 17.17 -40.87 8.39
Rajasthan 4.23 19.04 14.81 14.92 -10.58 4.12
23
gap II has decreased by about 5 per cent in one decade which does not seem to
be significant. Rajasthan and Tamil Nadu were identified as high-potential-
low-gap states, while Gujarat was recorded under the high-potential-high-gap-
states.
Soybean
As indicated earlier, yield gap analyses enables us to quantify the extent of
additional soybean production that could be obtained with complete adoption
of improved technology. Soybean yields vary considerably across states. The
highest yields were recorded in the state of Madhya Pradesh (2122.50 kg/ha)
and the lowest in Karnataka (1531.75 kg/ha). The yields in other states were
between 1600 kg/ha and 2100 kg/ha. There is a considerable difference in district
yields within a state. For example, in some districts of Madhya Pradesh and
Rajasthan district yields were much higher than 1000 kg/ha, whereas in some
districts the yields were between 450 kg/ha and 1000 kg/ha. In other states, the
differences across districts were smaller. By considering the yield gap II, it was
found that soybean productivity could be improved by 23.16 per cent at the
national level. Across the major soybean growing states, productivity level can
be improved from 24.56 per cent in Madhya Pradesh, 21.41 per cent in
Maharashtra and 19.12 per cent in Rajasthan. Results indicated that yield gap
II in the case of soybean is constant over time at the national level. This confirms
our results of previous section which indicated that area and not the yield was
mainly responsible for the growth in production of soybean. This calls for an
effective transfer mechanism of improved soybean production technology to
the growers so that yield reservoir could be harnessed. Table 15 indicates that
Andhra Pradesh, Maharashtra and Uttarakhand were classified under high-
potential-low-gap states, whereas Madhya Pradesh and Chhattisgarh were the
high-potential and high-gap showing states.
Table 13. Classification of states according to potential yield and yield gap in
groundnut
Groundnut
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Gujarat 2151 30 Karnataka 1677 28
Low gap Rajasthan 2377 15 Maharashtra 1712 17
Tamil Nadu 2209 10 Andhra Pradesh 1341 19
24
Sunflower
Karnataka, Maharashtra and Andhra Pradesh are the major sunflower-
producing states that together occupy more than 80 per cent area as well as
production in the country. On the basis of FLD data, it was observed that there
existed a vast potential for increasing the existing level of production by adopting
improved technologies advocated for different agro-ecological situations. Yield
gap II in sunflower at the national level was observed as 25.62 per cent which
Table 15. Classification of states according to potential yield and yield gap in soybean
Soybean
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Chhattisgarh 2122 33 Karnataka 1532 27
Madhya 1997 25 - - -
Pradesh
Low gap Andhra 1829 17 Rajasthan 1619 19
Pradesh
Maharastra 1850 21 - - -
Uttarakhand 1833 19 - - -
Table 14. Yield gap in soybean – growing status
State Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Major Madhya Pradesh 30.22 33.38 46.75 24.56 -16.53 8.82
Maharashtra 35.78 21.51 50.66 21.41 -14.88 0.10
Rajasthan 21.78 24.38 56.83 19.12 -35.05 5.26
Minor Andhra Pradesh 29.49 6.24 43.72 16.54 -14.23 -10.30
Chhattisgarh 30.62 36.26 22.82 33.36 7.80 2.90
Himachal Pradesh 37.75 35.81 - 37.75 35.81
Jharkhand - 29.65 - - 0.00 29.65
Karnataka 32.00 18.50 52.87 26.96 -20.87 -8.46
Punjab 42.27 - - - 42.27 0.00
Tamil Nadu 41.20 17.38 - - 41.20 17.38
Uttarakhand 11.24 23.34 47.63 18.58 -36.39 4.76
25
varied from 4.19 per cent in Maharashtra to 49.55 per cent in Chhattisgarh. On
the other hand, yield gap I in sunflower crop was 6.24 per cent at the national
level, ranging from 5.86 per cent in Karnataka to 46.90 per cent in Andhra
Pradesh. Karnataka and Tamil Nadu were identified in high-potential-high-
gap category, while Uttarakhand and Bihar states showed the high-potential-
high-gap for the crop. With respect to decadal analysis in yield gap II, it was
noted that a significant increment was not achieved over the base year
(2000-01).
Table 17. Classification of states according to potential yield and yield gaps in
sunflower
Sunflower
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Uttarakhand 2157 26 Maharastra 1050 4
Bihar 1894 30 Andhra Pradesh 770 11
Low gap Karnataka 1506 18 Chhattishgarh 1114 562
Tamil Nadu 1459 21 West Bengal 1238 38
Table 16. Yield gap in sunflower-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Major Andhra Pradesh 16.37 46.90 11.43 -46.90 4.94
Karnataka 20.63 26.05 5.86 18.03 14.77 8.02
Maharashtra 24.87 25.70 15.87 4.19 9.00 21.51
Minor Bihar - 4.22 - 30.04 - -25.82
Chhattisgarh - 38.04 - 49.55 - -11.51
Odisha 28.86 28.82 - - 28.86 28.82
Punjab - 50.00 - - - 50.00
West Bengal - - 25.78 38.37 -25.78 -38.37
Uttarakhand - - - 25.87 - -25.87
Tamil Nadu - 25.21 - 21.18 - 4.03
26
Safflower
Maharashtra, Karnataka, Andhra Pradesh and Chhattisgarh are the major
safflower-producing states in the country. The productivity of safflower in the
country has witnessed three-fold increase during past three decades. However,
it is still very low compared to the yield of improved verities at research stations,
as revealed by the FLD data conducted in different agro-ecological regions of
the country. The FLD data reveal that yield gap I was 36.68 per cent at the
national level which ranged from 21.29 per cent in Maharashtra to 48.74 per
cent in Madhya Pradesh. On the other hand, the yield gap II was recorded
35.01 per cent at the national level. Across the states, it was 26.74 per cent in
Karnataka to 43.72 per cent in Madhya Pradesh. In this case, Maharashtra was
classified as high-potential-low-gap state. No state was identified under high-
potential-high-gap category.
Table 18. Yield gap in safflower-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Major Chhattisgarh - 38.04 46.06 42.58 -46.06 -4.54
Karnataka 20.63 26.05 30.64 26.74 -10.01 -0.69
Madhya Pradesh - 48.74 43.72 -48.74 -43.72
Maharashtra 24.87 25.70 21.29 26.98 3.58 -1.28
Minor Andhra Pradesh - 16.37 - - 0.00 16.37
Bihar - 4.22 - - 0.00 4.22
Odisha 28.86 28.82 - - 28.86 28.82
Punjab - 50.00 - - 0.00 50.00
Tamil Nadu - 25.21 - - 0.00 25.21
Table 19. Classification of states according to potential yield and yield gaps in safflower
Safflower
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap - - - Chhattisgarh 917 42
- - - Madhya 871 43
Pradesh
Low gap Maharashtra 1416 26 Karnataka 97 27
27
Table 20. Yield gap in sesame-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Andhra Pradesh - 29.86 - - 0.00 29.86
Bihar 61.27 20.08 - - 61.27 20.08
Gujarat 37.97 20.61 - - 37.97 20.61
Kerala 7.36 58.28 8.59 56.80 -1.23 1.48
Madhya Pradesh 24.70 59.88 14.28 46.43 10.42 13.45
Maharashtra 39.38 33.76 24.89 43.18 14.49 -9.42
Odisha - 57.37 22.71 49.01 -22.71 8.36
Rajasthan 48.00 44.10 34.86 24.56 13.14 19.54
Tamil Nadu - 3.89 4.24 44.19 -4.24 -40.30
Uttar Pradesh 4.64 27.70 19.86 52.01 -15.22 -24.31
West Bengal 19.56 17.13 - - 19.56 17.13
Minor oilseeds
In respect of other minor oilseeds, viz. castor, sesame, niger and linseed, a similar
analysis was done. At the national level, yield gap II was recorded as 31.89 per
cent, 39.51 per cent, 52.35 per cent and 37.51 per cent for castor, sesame, niger,
and linseed, respectively (Table 28). In the case of sesame, the lowest yield gap
II was observed in Rajasthan (24.56 %) and the highest was recorded in Kerala
(56.80 %). In castor, yield gap II ranging from 11.20 per cent in Andhra Pradesh
to 65.79 per cent in Chhattisgarh was observed. Across states, Niger crop showed
the yield gap II from 41.91 per cent in Uttar Pradesh to 57.14 per cent in Madhya
Pradesh. Linseed crop showed the gap II range from 19.31 per cent in Rajasthan
to 50.60 per cent in Uttar Pradesh.
Major oilseeds
In general, yield gap I has increased while yield gap II has decreased over time
in major oilseed crop (Table 28). Increase in yield gap I indicates improvement
over the technology frontiers. An effort to bridge the yield gaps not only increases
the oilseed yield and production, but also improves the efficiency of land and
labour use, reduces production costs and increases sustainability. Various factors
cause exploitable yield gaps in oilseeds, such as physical, biological, socio-
economic and institutional constraints which can be effectively improved through
participatory research and government attention.
28
Table 22. Yield gap in castor-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Andhra Pradesh 21.99 36.71 46.44 11.20 -14.72 25.51
Chhattisgarh - - - 65.79 0.00 -65.79
Gujarat 8.61 17.98 -8.61 -9.37
Haryana - - - 30.91 0.00 -30.91
Karnataka 36.67 53.42 39.75 30.79 -16.75 22.63
Madhya Pradesh 46.08 40.65 57.41 5.43 -16.76
Maharashtra 37.50 62.11 18.91 -37.50 18.59
Odisha 24.22 53.66 35.25 -29.44 18.41
Rajasthan 27.85 25.60 17.88 25.12 2.25 0.48
Tamil Nadu 13.26 64.17 27.67 30.26 -50.91 33.91
Uttar Pradesh - - - 28.71 0.00 -28.71
Table 21. Classification according to potential yield and yield gaps in sesame
Sesame
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Kerala 596 57 Madhya 517 46
Pradesh
Odisha 657 49 Maharastra 526 43
Tamil Nadu 814 44 Uttar Pradesh 561 52
Low gap - - - Punjab 557 17
- - - Karnataka 537 14
- - - Rajasthan 456 25
29
Table 23. Classification of states according to potential yield and yield gaps in castor
Castor
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Madhya 2160 57 Odisha 1445 35
Pradesh
- - - Chhattisgarh 1448 65
Low gap Rajasthan 2792 25 Karnataka 1205 38
Uttar 1881 29 Maharastra 682 19
Pradesh
Haryana 1942 30 Tamil Nadu 1302 30
Gujarat 3688 17 Andhra Pradesh 964 11
Table 24. Yield gap in niger-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Bihar 49.85 38.34 40.15 47.69 11.51 -9.35
Chhattisgarh - 63.17 - 49.89 -63.17 13.28
Jharkhand - - 14.00 55.81 0.00 -55.81
Karnataka 30.63 34.77 - - -4.14 34.77
Madhya Pradesh 52.15 54.34 41.85 57.14 -2.19 -2.80
Maharashtra 2.44 39.41 24.69 50.46 -36.97 -11.05
Odisha - 21.60 3.89 64.28 -21.60 -42.68
Tamil Nadu - 21.60 - - -21.60 21.60
Uttar Pradesh - - - 41.91 0.00 -41.91
Table 25. Classification of states according to potential yield and yield gaps in niger
Niger
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Odisha 432 64 Madhya Pradesh 378 54
- - - Jharkhand 387 56
Low gap Maharastra 602 50 Bihar 389 48
Rajasthan 2792 25 Chhattisgarh 316 50
Uttar Pradesh 439 42 - - -
30
Table 27. Classification of states according to potential yield and yield gaps in linseed
Linseed
Gap High potential Low potential
State Potential Yield State Potential Yield
yield gap yield gap
(kg/ha) (%) (kg/ha) (%)
High gap Uttar Pradesh 1256 51 Maharastra 815 39
- - - Chhattisgarh 692 44
- - - Jharkhand 616 38
- - - Himachal 734 71
Pradesh
Low gap Madhya 1051 34 Assam 686 31
Pradesh
Bihar 980 32 - - -
Rajasthan 1210 19 - - -
West Bengal 924 24 - - -
Table 26. Yield gap in linseed-growing states
States Base year Current year % Increase over
1999-00 to 2000-01 2007-08 to 2008-09 the base year
Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II
(%) (%) (%) (%) (%) (%)
Assam - - 52.33 30.76 -52.33 -30.76
Bihar 40.40 66.30 13.48 32.35 26.92 33.95
Chhattisgarh - 47.65 - 44.14 0.00 3.51
Himachal Pradesh 21.17 72.32 43.89 71.11 -22.72 1.21
Jharkhand - - - 38.49 0.00 -38.49
Madhya Pradesh 19.93 41.05 4.45 33.53 15.48 7.52
Maharashtra 44.46 31.40 13.59 39.34 30.87 -7.94
Odisha 33.72 65.60 - - 33.72 65.60
Rajasthan 10.86 37.28 32.76 19.31 -21.90 17.97
Uttar Pradesh 15.89 46.40 21.45 50.60 -5.56 -4.20
West Bengal 6.48 46.40 31.93 23.99 -25.45 22.41
31
Table 28. Yield gaps I and II in different oilseed crops in India
Period
1999-00 to 2000-01 2007-08 to 2009
Gap-I (%) Gap-II (%) Gap- I (%) Gap-II (%)
Rapeseed-mustard 21.52 47.89 36.26 21.01
Groundnut 14.48 24.79 33.21 19.74
Soybean 31.24 24.64 46.74 23.16
Sunflower - 28.27 6.24 25.62
Safflower - 28.27 36.68 35.01
Sesame 10.51 33.19 19.09 39.51
Castor 5.88 32.89 15.77 31.89
Niger 18.40 44.06 39.89 52.35
Linseed 23.43 49.43 33.10 37.51
Oilseeds
32
Sources of Growth and Input
use in Oilseeds
The previous chapter on trends in oilseed production and productivity has
marked out the differences among oilseed crops in terms of growth rates in
area, production and productivity. The spatial and temporal patterns occurring
among the different crops were also brought out. The logical sequence of
arguments brings us to the question: what are the sources of growth and input
use in oilseed crops? The study identified irrigation, nutrient supply, availability
of quality seed, and the crop-specific production constraints in terms of
technology and the institutional infrastructure as the determinants of growth
rate and input-use efficiency and intensity. Each of these aspects were further
subjected to a detailed study with respect to oilseed crops to bring out the
associational aspect between growth rate in key variables of interest and the
identified factors which effect them.
Irrigation
The area under irrigation in oilseed crops has shown a steadily increasing trend
over the years. But, the increasing trend hides certain disturbing features. It
Figure 1. Percentage area under irrigation for all annual oilseed crops: 1952-53 to 2007-08
Area under irrigation (%)
Groundnut 19.6
Rapeseed-mustard 72.1
Sunflower 24.9
Sesame 6.3
Linseed 8.3
Castor 53.6
Yield increase with protective
irrigation (%)
Groundnut 45
Rapeseed-mustard 42
Sunflower 60
Safflower 53
(%)
Irri
gate
d a
rea
Chapter 3
33
should be noted that the percentage of area under irrigation in oilseed crops
stands at less than 30 per cent of the area under oilseed crops. The percentage
area under irrigation in oilseed crops is very small when compared to that of
cereal crops. Among the three major oilseed crops, the area under irrigation is
high only for rapeseed-mustard (72 %), whereas it is quite low in the case of
groundnut (20 %) and soybean (2 %). The percentage area under irrigation for
other oilseed crops is also very low. Though oilseed crops in general require
relatively less amount of water, it should be noted that the potential for yield
increase even with protective irrigation for oilseed crops is very high. Yield
increases to the tune of 45 per cent, 42 per cent and 60 per cent have been
recorded in groundnut, rapeseed-mustard and sunflower, respectively due to
proper irrigation.
An important source of yield growth in oilseed crops has been the spread
of irrigation facilities. Oilseed crops are usually grown in marginal lands with
little or no irrigation facilities. They can give substantial increase in yield under
irrigated conditions. Given the uneven growth and differences between oilseed
crops in their respective area under irrigation and the potential for yield increase
under irrigation, it will be prudent to take measures to bring more oilseed area
under irrigation.
Nutrient supply and crop management in oilseed production
Oilseeds are energy-rich crops, grown generally under the energy-starved
conditions. These are mainly cultivated in arid and rain-fed conditions in which
low soil fertility poses serious challenges to the realization of optimum yield.
So a balanced and scientific fertilizer application is a must for achieving higher
production and yield of these crops. Generally, oilseeds show good response to
both major nutrients and micronutrients. The crop is very responsive, not only
to primary nutrients (N, P, K) but also to some of the secondary nutrients like
sulphur as well as micronutrients such as zinc, boron and iron. The role and
importance of micronutrients in enhancing production and productivity is one
of the areas in which adequate attention has not been given in the case of oilseed
crops. The continuous promotion of straight fertilizers and the importance given
to macro nutrients like N, P and K have led to the neglect of the importance of
micronutrients. The micronutrient-deficiency is now widely prevalent in the
country, including many of the oilseed-growing tracts. The fertilizer management
based on cropping system also substantially improves fertilizer-use efficiency.
The increased use of fertilizers and other similar inputs have given a fillip to the
productivity of oilseed crops. But, the emerging scenario is not without its bundle
of problems.
The high extent of imbalance in the use of fertilizers is causing serious
threat, not only to oilseed crop productivity, but to environmental viability and
34
ecological health also. The estimated fertilizer-use and its contribution to nutrient
removal in oilseed crops during 2008-09 is presented in Table 1. The fertilizer-
use efficiency for the major fertilizer groups has also been presented. The
fertilizer-use efficiency is as low as 30 per cent for phosphatic fertilizers in oilseed
crops. It can be seen that the contribution to the nutrient uptake by fertilizers is
less than 25 per cent for all the major fertilizer groups and as low as 5.8 per cent
for potasic fertilizers. All these indicate the low fertilizer-use efficiency prevailing
in oilseed cultivation.
Table 1. Estimated fertilizer use and its contribution to nutrient removal in oilseed
crops: 2008-09
Nutrient Uptake Fertilizer-use Fertilizer-use Contribution to uptake
(’000 tonne) (’000 tonne) efficiency (%) Fertilizer (%) Others (%)
N 1591 588 50 18.5 81.5
P2O5
635 472 30 22.3 77.7
K2O 1442 167 50 5.8 94.2
Total 3668 1227 14.5 85.5
The practice of integrated nutrient management in oilseed crops along with
cultivation of nutrient-use efficient genotypes can mitigate this situation to some
extent. The quantum of use of fertilizers in oilseed crops has shown an increasing
trend. This increase in fertilizer input has also contributed towards the
productivity increase in oilseed crops.
Apart from an understanding of crop nutrient management, identification
and exploitation of positive nutrient interactions hold the key for increasing
returns in terms of crop yield, produce quality, and nutrient-use efficiency. The
positive (synergistic), negative (antagonistic) and absent (reflected as additive)
interactions among the nutrients give us the possible direction in breaking the
established yield plateau. Available data on other oilseeds revealed that the N
and P interactions are positive in sesame, linseed and rapeseed-mustard.
Application of N and P also suppresses attack of aphids in mustard, leading to
additional benefits.
An understanding of the nature of different interactions, factors affecting
them, and the ways and means of managing these for useful purposes is vital
for developing, advocating and practising a balanced and efficient crop nutrient
management strategy.
Biofertilizers form an important component of integrated nutrient
management (INM) technology. The use of biofertilizers enhances the
sustainability of oilseed production systems. It will help to avoid the overuse of
35
chemical fertilizer which will deteriorate the quality of soil in the long-term.
Rhizobium, Azospirillum, Azotobacter and Phosphorus Solubilizing Bacteria
(PSB) are the commonly used biofertilisers in oilseed crops. It has been shown
that rhizobium seed treatment for groundnut and soybean save initial N
application and it fixes nitrogen by 20-25 kg/ha. Seed treatment with
Azospirillum and Azotobacter could save 20 to 30 kg N/ha in crops like
sesame, sunflower and safflower in both rainfed and irrigated conditions. The
current level of application of biofertilizers in oilseed crops is negligible in
most of the oilseed crops. With imbalanced fertilizer application on one side
and the marginal conditions of the soil where oilseed crops are mostly grown,
use of bio-fertilizers can be a good source of growth for oilseed productivity
in future.
Efficient crop management
Another source of growth in oilseed crops is the technological component
embedded in the low cost and no cost technologies developed for efficient field
management of the crop. These technologies bring in productivity gains without
the cultivator having to incur huge expenses on adoption of technology. Some
of these technologies have spread very fast among oilseed growers and brought
about substantial gain in productivity of oilseed crops. An indicative list of low
cost / no cost technologies applicable to different oilseed crops is provided below:
● Crop rotation to improve soil health and to reduce pest build-up
● Adoption of soil and moisture conservation measures
● Timely planting
● Adequate plant stand through adjustment in seed rate and thinning
● Timely weed management to reduce crop-weed competition
● Need-based plant protection with bioagents and biopesticides
Effective crop management can still be a significant source of growth in
oilseed crop productivity and production provided latest innovations and
scientific discoveries related to oilseed crops are disseminated among the
cultivators. Further productivity gains through effective crop management rest
with the emerging innovative agro-techniques and input-use enhancing measures
that are being evolved for oilseed crops.
Seed as an input in oilseed cultivation
Seed is the most critical input as far as any crop is concerned. The quality and
the potential of the seed material is the critical element in determining the
production and productivity of the crop. Seed as an input in oilseed cultivation
36
was analysed as a part of the study and it was found that there are major issues
and concerns about the quality, timely availability and potential of the developed
varieties in the oilseed crops.
There are a number of notified varieties in each of the oilseed crop. They
are often notified for specific agro-climatic regions or for specific cropping
requirements or situations. The proliferation of the number of varieties does
not necessarily mean that all these varieties are being cultivated by the oilseed
farmers. Table 2 shows the number of notified varieties for each oilseed crop
and the number of varieties in the seed multiplication chain, a proxy for the
adoption of varieties in the farmer’s field. The data show that out of the total of
670 varieties notified in oilseed crops, only 264 varieties were present in the
seed multiplication chain. This shows that the majority of notified varieties are
either not being demanded by the farmers or are not available in the seed
multiplication chain due to one or the other reasons like non-availability of
nuclear seed. Another notable feature visible from Table 2 is that only a few
varieties constitute bulk of the breeder seed indent. In groundnut, even though
there are 163 notified varieties, only 4 varieties out of the 59 varieties present in
the seed multiplication chain, constitute 86 per cent of the breeder seed indent.
Table 2. Oilseed varieties notified in seed chain and seed replacement ratio (SRR):
2008-09
Crop No. of varieties No. of varieties in SRR (%)
notified seed chain (2008-09)
Groundnut 163 59 (4/86)* 2
Rapeseed-mustard 138 65 (6/78) 36
Soybean 101 37 (2/81) 6
Sunflower 50 12 (5/70) 69
Sesame 69 29 (4/80) 7
Safflower 34 17 (3/62) 15
Niger 22 8 (4/90) <1
Castor 39 12 (3/70) 50
Linseed 54 25 (5/73) 1
Total 670 264 9
Note: The figures within the brackets show number of varieties and their contribution to breeder
seed indent
The highly skewed demand for specific varieties, which can be seen among
all the oilseed crops presents a vigorous challenge to the institutional support
mechanism for seed dissemination in oilseed crops. The dynamics behind the
evolution and persistence of such skewed demand need to be understood for
37
each crop before evolving strategies to mitigate them. The presence of redundant
varieties should be identified and removed from the seed chain so that proper
variety reaches the farmer.
The number of varieties being notified in oilseed crop has shown a steady
increase over the decades. The strengthening of crop breeding programmes with
the mandate to develop varieties suitable for specific situations and regions seems
to be behind this trend. Against a total of 86 oilseed crop varieties notified
during 1970s, 223 oilseed crop varieties were notified during the first decade of
this millennium.
It can be seen from Table 3 that there exist mismatches between targeted
and actual breeder seed production. This further affects the links in seed chain
adversely. In groundnut and soybean, the actual production of breeder seed fell
short of the target, whereas in rapeseed-mustard the actual production surpassed
the targeted production of breeder seed during the year 2008-09. The need for
Table 3. Breeder seed target and production in oilseeds: 2008-09
Crop Target (quintals) Production (quintals)
Groundnut 22,897.00 9,065.10
Rapeseed-mustard 82.09 132.23
Soybean 17,177.93 13,803.47
Sunflower 18.10 79.88
Safflower 38.95 81.61
Castor 25.15 36.55
Linseed 42.68 84.82
Sesame 28.81 25.21
Niger 17.75 14.35
Figure 2. Decade-wise number of varieties notified in oilseed crops
Not
ified
var
ietie
s (N
o.)
38
strengthening seed chains through formal and informal measures attains
importance in this context. A strong and dynamic seed chain catering to the
farming community is a must for the better performance of oilseed crop sector.
This can ensure that the demanded seed varieties with proper quality are being
supplied to the oilseed farmers in adequate quantity at the right time.
The seed multiplication efficiency of oilseed crops within the seed chain
presents an interesting, but dismal picture. Using the data on breeder seed,
certified seed and foundation seed production of oilseed crops in the seed chain
during the period 2006 to 2008, the efficiency of the seed chain with respect to
each oilseed crop was worked out. In the case of rapeseed-mustard, the 17.64
quintals of breeder seed that went into the seed chain should have materialized
into 176400 quintals of certified seed in 2007-08. Against this, the actual
production of breeder seed in rapeseed-mustard during the year 2007-08 was
only 40456 quintals, implying a seed chain efficiency of only 23 per cent. The
seed chain efficiency for some of the other oilseed crops are also provided in
Table 4.
An overview of the seed requirement in oilseed crop sector is presented in
Table 5. The current seed replacement rate, the required seed rate and area
under the oilseed crops have been used to determine the certified and breeder
seed requirement for each crop after assuming normal productivity for the crop
in the seed chain. Groundnut with its high seed rate requires the highest quantity
of breeder seed at 3516 quintals. The quantity of breeder seed requirement for
rapeseed-mustard is low due to its low seed rate. The comparable figures for
other oilseed crops are also provided in the Table 5.
The seed chain system existing in the country for oilseed crops has several
deficiencies which need to be corrected if provision of quality seed to the farmer
has to be transformed into a reality. There are some promising aspects of the
Table 4. Seed multiplication efficiency in oilseed crop seed chains (in quintals)
Oilseeds crop Breeder seed Foundation seed Certified seed Certified seed to
lifted (q) produced (q) produced (q) be produced as
(May, 2006) (2006-07) (2007-08) per norms (q)
Rapeseed-mustard 17.64 1521 40456 176400 (23%*)
Sunflower 2.80 19 755 7000 (11%)
Linseed 20.26 84 1780 50650 (4%)
Safflower 18.26 561 17110 65736 (26%)
Castor 0.73 12 615 2628 (23%)
Sesame 5.89 66 1280 36812 (3%)
*Seed multiplication efficiency
39
seed chain as well like the increasing trend in breeder seed indent and production
for some of the oilseed crops. Such trends need to be sustained and seed chain
system should be strengthened for crops which are showing weakness in the
seed chain and seed delivery systems.
Production Constraints
The annual edible oilseed crops are diverse in their agro-climatic requirements
and crop management practices. The confluence of existing systems of input
supply, crop management practices and prevailing institutional conditions has
resulted in the current production scenario of oilseed crops where productivity
is low and input-use efficiency is well below the desired levels. The reason for
this situation is often classified as the production constraints in realizing higher
yield from oilseed crops. Each oilseed crop has its own specific set of production
constraints depending on the conditions under which production, processing
and marketing is carried out in that crop. There exist some common production
constraints also which are applicable across all the annual oilseed crops. They
include lack of availability of superior seed material to farmers at the correct
time, lack of price support policies and the poor linkage between research and
extension.
A good compilation of crop-specific production constraints spanning
technological and other aspects was done by Kumar et al. (2008). This is
reproduced below to understand how the sources of growth interact and how
the biotic and abiotic production constraints tend to differ for different oilseed
crops. This understanding is important for developing overall policy interventions
in the oilseed crop sector.
Table 5. Seed requirement in oilseeds: An overview
Oilseed crop and SRR/Seed Seed requirement (’000 q)
area (M ha) rate (kg/ha) Certified Breeder
Groundnut (6) 20/150 1800 3.516
Rapeseed-mustard (6) 30/5 90 0.002
Soybean (10) 20/80 1600 1.600
Sunflower (2) 100/5 100 0.010
Safflower (0.3) 20/10 6 0.001
Sesame (1.8) 20/5 18 0.002
Niger (0.4) 20/5 4 0.001
Castor (0.9) 100/5 45 0.002
Linseed (0.4) 20/40 32 0.013
40
Rapeseed-mustard
● Uncertainty about acreage the crops due to several factors: Climatic,
biological, natural resources, policy decisions (MSP), etc.
● Low and erratic rainfall leading to continuous moisture stress/ drought
over the years. Seedling stage is most sensitive to moisture stress, followed
by flowering. Farmers are also not well versed with the moisture conservation
techniques.
● Irrigation with saline and alkaline-blended water in most of the areas of
Rajasthan and parts of Uttar Pradesh, Haryana, Punjab, resulting in salinity
build-up.
● Mono-cropping in most of the major areas has led to soil deficiency of
nutrients and build-up of soil-borne pathogens.
● Stress caused by insect, nematodes, fungal, bacterial and viral pathogens,
orobanche and weeds collectively result in approximately 45 per cent yield
loss annually.
● High temperature during crop establishment (mid-September to early-
November), cold spell, fog and intermittent rains during crop growth cause
considerable yield losses by physiological disorder and appearance and
proliferation of white rust, downy mildew and Sclerotinia stem rot diseases
and aphid pest.
● Farmer’s reluctance in using balanced dose of fertilizers, adoption of plant
protection measures to control pest, diseases and weeds and harvesting at
proper time
● Unavailability of seeds of improved varieties suitable for various micro-
farming situations
Groundnut
● Cultivation of groundnut in marginal lands by resource-poor farmers.
● The crop is predominantly grown under rainfed conditions (80 %) and
experiences intermittent drought.
● Low plant stand due to low seed rate
● Lack of practice of seed treatment leading to seed-borne diseases.
● Inadequate availability of critical inputs, bio-fertilizers, etc.
● High incidence of diseases and insect pests.
● Non-availability of labour-saving implements.
● Nutrient deficiencies, especially of zinc, iron and boron.
41
● Non-availability of varieties for specific situations like salinity, acidity, cold,
shade, etc.
Soybean
● The crop is mainly grown under rain-fed conditions and is exposed to
vagaries of monsoon.
● Low seed replacement rate. It is only about 12 per cent at the present.
● Non-availability of effective packages for management of biotic and abiotic
stresses.
● Limited mechanization and inadequacies in implements used for soybean
cultivation, especially for marginal and small farmers.
● Lack of promotion for the utilization of soybean domestically for food and
feed uses.
● Lack of market for soybean in non-conventional but potential soybean-
growing regions.
● Lack of forecasting system for aspects like weather, disease and pest
outbreaks and market.
Sunflower
● Erratic rainfall leading to drought and low production
● Continuous cropping every year leading to low yields
● Imbalanced crop nutrition
● Poor soil moisture conservation practices
● Biotic stresses such as necrosis, alternaria, downy mildew, capitulum borer,
etc.
● Bird damage when crop is grown in small areas
The constraints in non-traditional areas as spring sunflower also include:
● Non-availability of quality seeds of early-maturing hybrids
● Late sowing of sunflower after harvest of potato, mustard and rice
● Inadequate marketing support leading to low prices
Safflower
In traditional areas (Maharashtra, Karnataka and Andhra Pradesh):
● Seed availability of high-yielding varieties and hybrids
● Most of the area is under rainfed conditions leading to acute moisture stress
42
● It is grown either as mixed or intercrop with other rabi crops leading to poor
crop management
● Absence of thinning to remove excess plant population
● Inadequate irrigation facilities to provide one life saving irrigation
● Inadequate and imbalanced fertilizer application
● Waterlogging due to heavy rains in September/ October in many areas
● Late sowing after harvest of kharif crop, leading to aphid problem
● Inadequate soil moisture conservation practices
In non-traditional areas (Chhattisgarh and Madhya Pradesh):
● Seed availability of high-yielding varieties and hybrids is low
● Late sowing of safflower after kharif crop enhances the aphid incidence
● Absence of thinning to adjust plant population.
● Inadequate soil moisture conservation practices
● Inadequate and imbalanced fertilization of major, secondary and
micronutrients
● Spiny nature of the crop discouraging the farmers for adoption
● Lack of marketing facilities for safflower
Castor
● Low and erratic rainfall distribution leading to moisture stress
● Cultivation in marginal and sub-marginal lands
● Non-availability of quality seeds of released varieties/hybrids
● Low-input use by the resource-poor farmers
● Pest and disease occurrence
The irrigated castor areas experience the constraints of:
● Wilt and root rot due to continuous cropping
● Non-availability of quality seed of hybrids in Rajasthan and Haryana
● Soil salinity problems in Gujarat and Rajasthan
Linseed
● Utera condition: In India nearly 25 per cent area lies under utera system of
cultivation of linseed. Very poor yield is being produced (1 q/ha) by the
farmers under this system due to lack of suitable varieties and production
and production management practices.
43
● Due to non-availability of fibre scutching machines, farmers are unable to
grow a double purpose variety which is more remunerative in comparison
to other types.
● Linseed bud fly and alternaria blight: can cause up to 80 per cent loss in
yield. Due to lack of resistant donor, resistant varieties could not be
developed so far.
● Non availability of varieties suitable for edible purpose.
● Non- availability of alternative technology to replace the utera cultivation.
● The practice of cultivation of old low-yielding varieties should be broken
and seed replacement chain should be encouraged for immediate gain.
● Poor adoption of non-monetary inputs technologies by the farmers.
Production constraints in oilseed crops: A micro level assessment
Groundnut
A survey was conducted among the groundnut-growers in the Junagadh district
of Gujarat to examine the production constrains prevailing at farmers’ field.
The constraint analysis done as a part of the study, has highlighted some
pertinent issues related to the oilseed crops. Table 6 provides a summary of the
Table 6. Technology gap (TG) in groundnut cultivation prevailing at farmers’ level
S. No. Parameter Farmers’ practices Recommended technology Gap (%)
1 Varieties GG-2, GG-20, GG-37, GG-2, GG-10, GG-11, GG-20, With reference to
GG-13 GG-37, GG-13 recommended
variety gap is nill
2 Land 2-3 ploughing before Tilth for good seed germination With reference to
preparation days of sowing and seedling emergence. 1 and 2 recommended
ploughing, followed by 2 or 3 practice gap
harrowing technology is 20
per cent
3 Seed rate 180 kg/ha 100-110 kg/ha Higher rate
4 Fertilizers ● 120 kg/ha DAP N: 12.5-25, P2O5: 40-50,
does ● FYM: 3 lari tractor/bigha K2O:0 kg/ha
● Liquid S: 1 litre/bigha in
225 litre water
● Ammonium sulphate: 10
kg/bigha
● Star-plus: Water-soluble
fertilizer (19:19:19)
5 Weeding Hand picking or khurpi for Application of herbicide along 100 per cent gap
removal of weed with one or two interculture with reference to
operation recommended
Pre- sowing- Alachlor or technology
fluchloralin @1.5 kg ai/ha,
pre-emergence–pendimethalinContd…
44
analysis of technology gap in groundnut at the farmers’ level from the survey
conducted to ascertain yield gap in the Junagadh district, the farmers were found
to be aware of the varieties recommended by the scientists. Therefore, there
was no gap with reference to use of recommended varieties. Technology gap
was noted in adoption of new released varieties as the preference was mostly
with GG-20 even though it was the older variety. With respect to land
preparation, 20 per cent gap was computed. Regarding application of fertilizer,
farmers were not sure about the recommended dose. They applied the farm
yard mannure and other chemical fertilizers, without ensuring whether it was
sufficient or not. Technology gap was as high as 100 per cent in the case of
weed management and 50 per cent in disease management and insect-pests
management. At the micro-level, yield gap-I and gap-II were 22.92 per cent
and 24.70 per cent, respectively.
Table 7 shows the constraints experienced by groundnut farmers of the
Junagadh district. The major constraints experienced by farmers were inadequate
availability of fertilizers, problem of irrigation, aflatoxin problem in seed, and
non-availability of seed of government firm on time. The low price of the produce
realized by the farmers was ranked as the most severe constraint in the production
of groundnut. The faulty system of produce purchasing and price fixation system
prevailing in APMC was ranked second. The inadequate availability as well as
high price of seed was the third main constraint as felt by the farmers. Lack of
availability of adequate quantity of fertilizers in season was also reported.
6 Disease Used chemical fungicide Deep poughing(8-10 inches) 50 per cent gap
Management for root rot, collar rot, seed treatment with carbendazim with reference to
tikka disease 0.1 @ 2g/kg seed, formulations recommended
of Trichderma harzianum or T. technology
viridi @4-10 g/kg seed before
sowing, application of neem or
castor cake @ 250-500 kg/ha at
the time of sowing
7 Insect-pest Thrips, jassids, aphid manage Cowpea as trap crop reduces 50 per cent gap
by chemical insecticides aphid and jassids infestation, with reference to
Application of malathion 0.05 or recommended
dimethoate (0.03%) or phospha- technology
midon (0.03%) or methyl-ode-
meton (0.03%) or quinalphos
(0.05%) or monocrotophos
(0.04%). Use of predator
8 Harvesting 10 September-10 October 10 September-10 October No gap
9 Yield 1440-1800 kg/ha Research station yield= 2151.31 Yield gap I =22.92
kg/ha, Potential yield =2791 per cent, Yield
kg/ha gap II=24.70
per cent
S. No. Parameter Farmers’ practices Recommended technology Gap (%)
Table 6 Contd…
45
Rapeseed-mustard
A primary survey was conducted among rapeseed-mustard growers in the
Bharatpur district of Rajasthan to assess the production constraints at farmers’
fields. The constraints analysis covered the technology gap, varietal scenario
and other issues prevailing at farmers’ fields.
Table 7. Constraints experienced by groundnut growers in Junagadh district, Gujarat
S.No. Type of Description Rank Overall
constraint rank
1. Seed ● Inadequate availability of seed from Govt. organization I III
● The cost of private firm seed is high in comparison to seeds II
of Govt. organization
2. Fertilizer ● Inadequate availability of fertilizers I VI
● Quality of fertilizer II
3. Irrigation ● Charges of electricity is high I V
● Irregular power supply II
4. Price ● Price is low at harvesting time I I
● Uncertain market II
5. Market ● No facility for the purchasing of produce at farmers’ I II
door step
● The price fixation conducted by the market executives on II
the auction basis
● No role of farmers in price fixation III
6. Biological ● High self-pollinated crop, 2 per cent crossing, so natural II IV
(Genetical) variability is very less.
● Less seed variability, linkage of genes are not available, I
success in hybridization is very less.
● Low flower to pod ratio (7 flower:1 pod) III
7. Credit ● More dependency on private money lenders I VII
Table 8. Technology gap in rapeseed-mustard prevailing at farmers’ level in Bharatpur district
S. No. Parameter Farmers’ practices Recommended technology Gap (%)
1 Varieties Rohini, CS-54, RGN-48, Pusa Mustard-21, There was no gap
Pioneer, RGN-73, CS-56, Pusa Mustard-22, with reference to
NRC-2, RS-30, Pusa, T-59 DMH-1, NRCHB-101, NRCHB- recommend
506, RGN-145, NRCYS-05-02, variety
Narendra Tara
2 Land Plank the field for rapeseed- Soil: loam to clay loam Complete
preparation mustard because of the pH:7.0-8.2 mismatch
irregularity in irrigation. Deep ploughing in between
Land is 30 per cent irrigated summer season recommended
and 70 per cent rainfed8-10 & actual
times ploughing before practices
sowing for moister
conservationContd…
46
The technology gap in rapeseed-mustard crop with respect to varietal
adoption was found to be non-existent in the area selected for the micro study.
Its means that the farmers were well aware about the recommended variety
S. No. Parameter Farmers’ practices Recommended technology Gap (%)
3 Seed rate 4-6 kg/ha 4-5 kg/ha No Gap
4 Fertilizer use DAP 120-150kg/ha N: 70-90 kg/ha, P: 30-50 kg/ha Over dose
(P 57-72 kg/ha, N 22-27
kg/ha) Urea -30-60kg/ha
(N 14-28 kg/ha)
5 Weeding Hand picking Remove with khurpi and two- 100 per cent gap
wheeled hand–hoe with respect to
improved tools
6 Disease Primary stage infection– ● Seed treatment (5 g/kg) with 100 per cent gap
management removal of stem rot talc based formulation of GR w.r.t. chemical
infected part isolate of Trichodema harzi- control
anum reduced Sclerotinia and
Alternaria diseases
● Critical stages for Alternaria
blight outbreak were 45 DAS
and 75 DAS
● Neem oil (2%) and neem seed
kernel extract (5%) and Verti-
cillium lecanii @ 108 CS/mL
for mustard aphid
● Seed treatment (5g/kg) with
imidacloprid 70 WS for
painted bug up to 30-35 DAS
7 Insect-pest Aphid - Severe stage- For Aphid – Spray with oxy- 100 per cent gap
Application of thio-urea demeton methyl (Metasystox) 25 w.r.t. chemical
@ 600 g/ha +600 litre EC or dimethoate (Rogor) 30 EC control
water at the time of or monocrotophos (Nuvacron) 36
flowering for aphid SL @ one litre in 600-800 litre of
management water/ha, painted bug - dust the
crop with endosulfan (4%) or
quinalphos (1.5%) dust @ 2-025
kg/ha, leaf miner -systemic
insecticide such as oxy-demeton
methyl 25EC or dimethoate 30
EC @ 1.0 litre in 600-800 litres
of water/ha, saw fly - spray of
malathion 50 EC @ 500 mL or
endosulfan 35 EC @ 625 mL in
500 litres of water, Bihar hairy
caterpillar - dust the border of
fields with endosulfan 4%,
termites-deep summer 5
ploughing and application of
chlorpyriphos 20 EC@ 4 litre/
ha during last 5 ploughing
8 Harvesting February to March February to March No gap
9 Yield 22 q/ha Potential yield= 24q/ha No gap
Research station yield =22 q/ha
Table 8 Contd…
47
which is suitable for that particular region. The land preparation was not found
satisfactory on the basis of the recommended practices. Farmers also applied
overdose of potash and just half of the nitrogenous fertilizer as compared to
the recommended dose. The technology gap in respect of disease management
was found to the extent of 100 per cent. Surprisingly, survey data showed that
yield at farmers’ field was comparable with yield at research station, indicating
the nil yield gap II. However, FLD data showed yield gap-I as 15.77 per cent
and the yield gap II as 12.52 per cent.
On overall basis, the constraint related to price of produce was ranked first
by the rapeseed-mustard growers mainly because of the fact that at the time of
harvesting, the price offered in the market did not commensurate with the
farmers’ investment and efforts and also the dynamics of price in the market
was very fragile which often forced the farmers to go for distress sale to meet
their livelihood requirements. The second ranked constraint as experienced by
the farmers, was also related to market. The constraint related to seed was
accorded third rank by the producers of rapeseed-mustard as, it was felt by
them that there was inadequate availability of hybrid seed, higher cost of seed
levied by the private firm, etc. Another constraint was related to the system of
testing of oil-content in the produce. It was expressed by the farmers that there
Table 9. Constraints experienced by rapeseed-mustard growers in Bharatpur district, Rajasthan
S.No. Type of Description Rank Overall
constraint rank
1. Seed ● Inadequate availability of seed from government organization I III
● The cost of private firm seed is high in comparison to
government organization seeds II
2. Fertilizer ● Inadequate availability of fertilizers I VI
● Poor quality of fertilizer II
3. Irrigation ● High charges of electricity I
● Irregular power supply II V
4. Price ● Price is low at harvesting time I I
● Uncertain market II
5. Oil content ● No fair testing of oil content by private firm I IV
testing
6. Market ● No facility for the purchasing of produce at farmers’ door step IV II
● The price fixation conducted by the market executives and I
oil millers on the auction basis
● No role of farmers in price fixation II
● The price of oilseed depends on percentage of oil III
● Wastage of product (7-8 kg/ q) at market yard V
7. Credit ● High dependency on private moneylenders I VII
48
was no proper facility for fair testing of oil-content at the private firms. Moreover,
there was no public sector intervention on this aspect. Irrigation played a vital
role in the cultivation of rapeseed-mustard. As in the study area, there was no
government-arranged irrigation system, so farmers were heavily dependent on
tube-well irrigation system which again was power supply-dependent. The
present scenario of irrigation was, therefore, felt costly and irregular in want of
timely power supply. Further, the rapeseed-mustard growers were found
dependent more on private money-lenders and other sources as compared to
institutional credit. The time consuming and complicated process of obtaining
credit from financial institutions declined the grower’s interest; and they opt for
the private money-lenders for loan even if they charge exorbitant interest rate.
The development of a system for purchase of produce at farmers’ door step
was felt as the most important issue because most of the farmers were not able
to afford direct sale of their produce in the market.
A close look at the constraint analysis has indicated the broad contours for
oilseed crops as a whole. The outcome from the study gives a strong indication
that the pricing and market mechanism available for oilseed crop produce are
far from satisfactory as far as the primary producers are concerned. This
dissatisfaction with the market mechanism needs to be addressed to enthuse
the farmers towards higher production and productivity targets in oilseed crops.
Research initiatives and technological advancements in
oilseed crops
Research and technological outputs as a source of growth in production and
productivity need no supporting arguments. It is widely understood that future
increase in production and productivity shall materialize mainly by exploiting
these components. The power of technology in productivity enhancement can
be seen from the data on productivity of oilseed crops at different points of
time. It also shows the complementarity existing between the use of technology
and conducive environmental conditions. A cursory glance at the productivity
gains achieved from the pre-TMOP period to the period 2003-04 shows the role
of technology in enhancing productivity (Table 10).
Research component for oilseed crops has to be strengthened further to
evolve sustainable and viable technologies for increase in productivity. The new
avenues of research in oilseed crops offer exciting prospects for breaking the
yield plateau and for better use-efficiency of available resources. An exhaustive
review of innovative technologies available for oilseed crops shows that many
technological avenues lie underutilized. Some of the emerging fields of crop
management research depict considerable potential in improving the yield of
oilseed crops. Latest innovations in agro-techniques and increase in input-use
49
efficiency need to be put to test and promising technologies among these need
to be promoted to provide a strong technological push for oilseed productivity
enhancement. Kumar et al. (2008) have identified some of the innovations which
can be used in oilseed crops and they are briefly discussed below.
Emerging areas in technology and research in oilseed crops
Resource-conservation technologies
Resource-conserving technologies (RCT) are the practices that improve the
efficiency of use of natural resources, including water, air, fossil fuels, soils,
inputs, and people. Soil cover management, profitable rotations and minimum
level of soil movement (e.g., reduced or zero tillage) are the aspects of RCT
commonly used. The advantages of RCT can be effectively extended in
realization of sustainable oilseed production. Some of the components of RCT
which can be adopted in oilseed cultivation inter alia include surface seeding,
zero-tillage with inverted-T openers, laser land leveller, etc.
Precision farming
Precision farming is the application of technologies and agronomic principles
to manage spatial and temporal variability associated with different aspects of
agricultural production for improving crop performance. Collected information
may be used to precisely evaluate the optimum sowing density and need of
fertilizers and other inputs, and to predict crop yields accurately. Some of the
Table 10. Power of technology on productivity enhancement in oilseeds
Crop Yield (kg/ha)
1985-86* 2002-03** 2003-04***
Groundnut 719 733 1364
Rapeseed-mustard 674 866 1151
Soybean 764 762 1210
Sunflower 374 531 496
Sesame 226 306 453
Safflower 382 483 367
Linseed 264 393 403
Niger 300 208 253
Castor 484 733 1094
Total 570 691 1067
* Pre-TMOP; ** Severe drought year; *** Normal year
50
components of precision farming are yield monitoring, yield mapping, variable
rate fertilizer, weed mapping, variable spraying, topography and boundary
delineation, salinity mapping, etc. The application of precision farming is
hampered by the small size of holding for most of the oilseed crops.
Contingency crop planning (CCP)
Weather aberrations are the limiting factors in realizing optimum yield in many
oilseed crops. In such a scenario, the emerging fields of agronomy like
contingency crop planning techniques can be of help. Contingency crop planning
refers to alternative crop plan to minimize adverse effect of weather aberrations.
Oilseed crops are mostly amenable to the development to contingency plans.
Opportunity cropping, mid-season correction, response farming, etc. are some
of the commonly used techniques in contingency crop planning. CCP as a tool
is more pertinent in oilseed crops where a significant acreage comes under rain-
fed farming.
Crop modelling and simulation
The computer simulated crop models can be effectively used to solve the practical
problems. These provide insights into the interactions between a crop, its
environment and management. The available data on parameters like
photosynthesis, respiration, hydrology, crop management practices, planting
and harvesting dates, irrigation, fertilization, intercropping and multiple
cropping, etc. with respect to oilseed crops can be put to good use in development
of appropriate crop models. The application of crop simulation models can
help in evolving resource conservation strategies and increasing the input-use
efficiency.
Enhancing water-use efficiency
Considering the fact that most of the oilseed crops are grown on water scarce
environments under rain-fed conditions, improvement in water-use efficiency
is vital. Some of the promising irrigation techniques such as micro irrigation
(sprinkler, drip, micro sprinkler) have already proved to be highly efficient.
Agronomic measures such as varying tillage practices, mulching and use of
anti-transpirants can reduce the demand for irrigation water. Another option is
of deficit irrigation, with plants exposed to certain levels of water stress for
specific periods without significant reduction in yields.
Agronomic screening of nutrient-efficient genotypes
Agronomic screening of existing genotypes needs to be done to identify and
classify them based on their nutrient-use efficiency. The availability of nutrient-
51
efficient genotypes of oilseed crops ensures that crop breeding programmes
can include introgression of such desirable traits into the existing cultivars. The
proper identification of efficient genotypes and further studies on the physiology
of these genotypes can throw light on nutrient assimilation and its relationship
with yield parameters.
Modifying source–sink relationship
The source–sink relationship affects the ultimate productivity of a crop. In oilseed
crops, the redesigning of bio-synthetic pathways of fatty acid synthesis can
substantially improve the source–sink relationship. Carbon dioxide enrichment,
spraying of water, spraying of sodium bi-sulphide solution on leaves and
improving nitrogen nutrition are some of the methods of altering source–sink
relationship practised in various crops. The use of plant growth regulators and
management of plant canopy have depicted potential in improving nutrient use
and the source-sink relationship.
Enhancing harvest index and modifying assimilate partitioning
mechanism
The harvest index (grain yield as a proportion of the total biomass yield) can be
influenced by agronomic management decisions taken throughout the life-cycle
of a crop. Using of plant growth regulators to modify the existing assimilate
partitioning mechanism can positively influence the productivity of oilseed crop
by its effect on harvest index. Yield enhancement through such assimilate
partitioning modification can be used in oilseed crops where water stress and
resultant yield reduction are common. Canopy structure of the crop is a factor
which can indirectly influence the harvest index through its effects on
transpiration efficiency and water-use efficiency.
Water stress management
The emphasis on soil water relationship has been replaced by plant water deficit
relationships. All the three mechanisms of drought resistance, viz. drought
escape, dehydration postponement and dehydration tolerance call for different
sets of traits in oilseed crops. Identification and classification of these traits
along with identification of available genotypes with such traits are important
steps towards developing drought-resistant varieties in oilseed crops. Traits
having positive influence in countering intermittent water stress are of particular
interest as far as oilseed crops are concerned.
Other non-conventional interventions to enhance yield
Effective microorganism (EM) is a microbial inoculant consisting of mixed
culture of naturally occurring beneficial microorganisms. Research has shown
52
that EM can improve soil quality, increase growth, yield and quality of crops,
and provide plant protection against diseases and pathogens. The use of effective
microorganisms in oilseed crops can be a viable source of productivity
enhancement. The use of plant growth-promoting rhizobacteria (PGPR) and
other microbial inoculants offer a window for yield enhancement which needs
to be explored further. The potential use of anti-transparent and other plant
growth hormones in modifying the oilseed crop parameters influencing yield
needs to be exploited.
Productivity enhancement through crop ecological zoning
The concept of crop ecological zoning can be effectively utilized in the crop
production strategies for oilseed crops. Crop ecological zoning refers to the
practice of delineating efficient zones for specific crops for realizing potential
yields with high input-use efficiency. Supporting services like input supply,
marketing and processing have to be linked to these ecological zones besides
strengthening research and extension systems and infrastructural facilities. The
importance of crop ecological zoning in oilseeds is highlighted by the following
facts about the area distribution of oilseed crops:
● 4 districts contribute 33 per cent of groundnut area
● 4 districts contribute 37 per cent of sunflower area
● 9 districts contribute 31 per cent of mustard area
● 12 districts contribute 41 per cent of soybean area
Delineation of crop ecological zones can be used in formulating the strategies
for resource allocation and extension strategies. Concentrated efforts on two
categories of crop areas, viz. high area – low productivity and low area – high
productivity zones will give better marginal efficiency in the efforts to increase
production and productivity of oilseed crops.
Research initiatives in varietal technology
Varietal technology draws bulk of the research funding for oilseed crops. The
proliferation of notified varieties notwithstanding, there is a need for specific
varietal traits which are being demanded by the farmers. Varietal technology is
the major land-saving technology which can be deployed to enhance oilseed
productivity and production. The varietal requirements identified for important
oilseed crops are presented below. Research initiatives to address these varietal
requirements are vital for the oilseed crop economy.
53
Crop Key traits required for varieties
Groundnut Short duration, disease resistance, drought resistance, acidity
tolerance, low temperature tolerance, Hand-picked selected (HPS)
types
Rapeseed-mustard Short duration, high oil–content, salinity tolerance, high-
temperature tolerance, late sown, double row, drought tolerance,
foliar-disease resistance
Soybean Early maturity, drought tolerance, rust resistance, suitable for
rabi cultivation, disease resistance, insect-pest resistance
Castor Wilt resistance
Safflower GMS and CMS hybrids, spiny/non-spiny varieties/hybrids
Sesame White seeded, short duration, drought resistance, phyllody
resistance, semi-rabi condition, high-temperature tolerance
Research initiatives and technology breakthroughs as the future source of
growth need proper attention and consideration for policy support and
guidance.
Role and impact of government schemes in oilseed sector
Institutions are critical to oilseed economy of the country. The research,
development and technology dissemination infrastructure existing in the country
for oilseed crops is the legacy of the past policies and interplay of public and
private interest in the sector. Apart from the institutions as such, some
institutional support programmes have been tried in the oilseed crop sector.
These programmes need to be studied and their significance and impact
understood so that better programmes and institutional support can be provided
for oilseed crops. Three of the major programmes in oilseed crop sector have
been identified for detailed study, viz. the role played by National Dairy
Development Board (NDDB), National Agricultural Marketing Federation
(NAFED) and the flagship programme of the government in oilseed sector;
Integrated Scheme on Oilseed, Pulses Oilpalm and Maize (ISOPOM).
Role of NDDB in oilseed sector
In 1979, the NDDB formulated a project ‘Restructuring of Oil and Oilseed
Production and Marketing’, to generate funds for use in agricultural development
in the oilseed sector with the following objectives:
● To co-ordinate the modernization of oilseed production, processing, and
the marketing of vegetable oils, oilseeds and by-products in the areas covered
by the project;
54
● To procure and market imported and indigenously-produced vegetable oils
in such a way as would contribute to the stabilization of supplies at levels
that will be fair to consumer and growers;
● To increase the opportunities for productive and remunerative employment
in the selected major oilseeds growing areas;
● To generate funds required for the establishment of a modernized oilseed
and vegetable oil industry based on oilseed growers’ co-operatives, which
will put the functions of oilseed processing and marketing into the producers’
own hands;
● To devise and implement a programme of investment and development
that will enable oilseed growers to increase production, returns, and
efficiency of processing and marketing functions, through the growers’ co-
operatives.
It was expected that oilseeds production in the areas covered by the project
would increase by about 30 per cent by the end of the project period. The
Department of Agriculture and Cooperation (DAC) would be responsible for
the overall management of the oilseeds and oil economy, for maintaining the
consumer prices within the price band through a strategy approved by the
Empowered Committee. The NDDB would be responsible, under the
supervision of DAC, for building up a market intervention stock through imports
and procurement of domestic oilseeds/oils; and for this purpose NDDB was
allowed to import 20 per cent of the total sanctioned imports of edible oil in
any year or would be given a grant of Rs 20-30 crore, as may be necessary. In
January 1989, the Government announced an ‘Integrated Policy on Oilseed’
(IPO) with the following five important elements:
● Support to farmers with technology, inputs, etc. to increase productivity;
● Review of PDS prices and issue prices to the vanaspati industry. Imported
oils would be supplied at a price not below the cost of production of domestic
oil. PDS oils would be released at reasonable prices without detrimental to
the legitimate interests of farmers;
● Fixation of a price band;
● Appointment of NDDB as the Market Intervention Agency (MIA); and
● Establishment of an Empowered Committee headed by the Cabinet
Secretary to monitor the implementation of the Integrated Policy.
The NDDB has made a significant impact in the oilseed sector. Some of the
areas of its impact are:
● Development of new varieties of oilseed crops suitable for specific farming
conditions.
55
● As a participant in seed chain by producing breeder seed and thereby
ensuring availability of quality seeds to farmers.
● Technological interventions in edible oil extraction process.
● The most important achievement of NDDB has been the initiation of
Integrated Policy on Oilseeds (IPO) and the consequent Market Intervention
Operation (MIO) which is the most effective intervention in the sector.
Integrated Scheme on Oilseed, Pulses, Oilpalm and Maize (ISOPOM)
To attain self-sufficiency in oilseeds production, the Government of India had
launched Technology Mission on Oilseeds (TMO) in mid-1986. The aim of
this program was to accelerate production through increase in planted area,
bring more irrigated area under oilseeds cultivation and introduction of high-
yielding varieties of oilseeds; even pulses, oilpalm and maize were brought under
TMO in 1990, 1992-93 and 1995-96, respectively.
Some of the salient achievements of ISOPOM include:
● Technology dissemination based on research finding of NARS to all the
fourteen ISOPOM implementing states as an ongoing process,
● Streamlining and monitoring of activities taken up under ISOPOM to ensure
proper implementation of the scheme,
● Preparation of Seed Rolling Plan which projects seed quantity requirements
of different crops at various stages of seed for different seasons across the
states for its mandate crops, and
● Market intervention operation, which has been an effective tool to influence
the oilseed markets.
The role of institutions in the oilseed sector can be seen from the details
provided for the two institutional programmes. Strengthening of institutions
can play a facilitative role in the oilseed economy of the country.
56
Structure of Oilseeds Processing
Sector of India
The Indian oilseeds processing sector is fragmented, small-scale and suffers
from low capacity utilization. The Indian oilseed processing industry includes
major processing technologies such as (a) traditional mechanical crushing, or
expelling, used for oilseeds with relatively high oil-content; and (b) solvent
extraction for processing oilseeds and expeller cake. The traditional mechanical
crushing industry includes ghanis and small-scale expellers. The processing
industry also includes an oil refining sub-sector which primarily refines domestic
solvent-extracted oils and imported crude and solvent-extracted oils. The
processing industry also includes vanaspati (hydrogenated oil) sub-sector that
refines and hydrogenates domestic and imported oils.
The fragmentation, low technical efficiency and excess capacity of India’s
oilseed processing sector are largely due to government regulatory and trade
policies such as plant scale restrictions, selective credit controls, tariff and non-
tariff barriers to oilseed imports and future trading restrictions. The cost of
production of oilseed industry depends largely on the scale of operations, with
larger plants able to achieve lower unit costs at any given level of capacity
utilization. It has been reported that per unit operating costs are two-thirds
higher for a 500 tonnes/day crushing plant than for a 1500 tonnes/day facility.
Government’s small-scale industry (SSI) reservation policies confine the
processing of traditional oilseeds, such as groundnuts, rapeseed-mustard, sesame,
and safflower but not soybean and sunflower to small firms, thus allocating a
large share of edible oil production to relatively inefficient processors. Further,
low oilseed yields at farm level, poor transport and handling infrastructure and
instability in oilseed production as well as inaccessibility to imported oilseeds
make it difficult for the processors to procure regular supplies throughout the
year, resulting in low capacity utilization. In addition, even the processors not
covered by SSI policies such as soybean processors and solvent extractors are
small in terms of international standards.
Low capacity utilization is due to various reasons. Due to low yield of
oilseeds coupled with variability in production, many producers face difficulty
in obtaining regular supplies of raw materials throughout the season. Poor
infrastructure facilities and limited freight options lead to relatively high
procurement costs. In addition, poor storage facilities, high interest costs, and
Chapter 4
57
lack of risk/supply management tools such as futures trading or contract farming
also contribute to the problems in obtaining supplies. Besides, tariff and non-
tariff barriers as well as phytosanitary import barriers prevent the use of oilseed
imports to stabilize supplies for the processors. Finally, excess oilseed processing
capacity is also related to tax and other incentives that stimulated overinvestment
in many rural areas.
Table 1. Status of the vegetable oil industry (Estimates as on January 2010)
Type of vegetable No. of Annual installed Average capacity
oil industry units capacity (lakh Mt) utilization (%)
Oilseed rushing units 1,50,000 450 15-25
(Approx) (in terms of seeds)
Solvent extraction units 810 350 31
(in terms of oil-bearing
material)
Refineries attached with 135 55 45
vanaspati units (in terms of oil)
Refineries attached with 310 38 25
solvent units (in terms of oil)
Independent refineries 615 45 32
(in terms of oil)
Average of all refineries 1060 138 35
(in terms of oil)
Vanaspati units 128 38
(in terms of vanaspati, 35
bakery shortening &
margarine)
Source: Ministry of Consumer Affairs and Public Distribution, Department of Food and Public
Distribution, Government of India.
Case Studies
Survey report of Bharatpur district (Rajasthan) on rapeseed-mustard
A survey was conducted in the district of Bharatpur in collaboration with the
Directorate of Rapeseed-Mustard Research, Bharatpur, Rajasthan to envisage
different parameters, viz. market research, survey of oil processors and constraint
analysis of rapeseed-mustard growers. The data were collected from farmers,
traders and oil millers with the help of checklist and semi-structured interview
schedule through individual and focused group discussions. The analysis of
data was done using descriptive statistics. The details of survey are presented in
the following sections.
58
Processing sector
There are 70 oil processing units in operation in the Bharatpur district of
Rajasthan. The processing units use traditional methods of processing for
rapeseed-mustard. The capacity of oil processing is given in Table 2.
Table 2. Capacity distribution and share of processing units in Bharatpur district
Sl. No. Capacity (tonnes/day) No. of units Share, %
1 Low capacity (30) 47 67.14
2 Medium capacity (60) 15 21.43
3 High capacity (100) 08 11.43
Total 70 100.00
The utilization of processing units in terms of input and output is only 20
per cent. The processing units process oilseeds by the traditional extraction
method. But the whole process has been mechanized and is driven by electricity.
Electric supply is adequate. There is no dearth in the supply of raw material
which is sufficiently available in nearby Bharatpur Mandi, which is the biggest
market of rapeseed-mustard of Rajasthan. In the operation of processing, 35-
36 per cent oil is extracted. Millers generally prefer high oil-containing mustard
seed. Rapeseed-mustard variety ‘Rohini’ contains almost 42 per cent oil. After
extraction of oil, oil cake is also produced as a by-product. Oil cake is used as
an industrial solvent and cattle feed. The units in processing industry generally
purchase the machinery from Ludhiana and Ghaziabad. These industries have
all the facilities for marketing of rapeseed-mustard oil. The millers do packaging,
branding, labelling and marketing, themselves.
The major markets of mustard oil produce are the eastern and north-eastern
states, viz. West Bengal, Bihar, Odisha, Assam, Tripura, Chhatisgarh and
Jharkhand. The processors and traders have no financial problems because many
of the private banks are present in the local market and nationalized banks are
also liberal in financing these oil processors. The traders and oil millers do not
get any support from the government for the marketing and processing of
rapeseed-mustard. The Rajasthan Government does not provide any subsidy
for the purchasing of machinery. As such millers in Bharatpur reported no
constraint, except policy related constraints, which according them are very
severe and affecting the small-scale oil processing industries. The constraints
highlighted by the processors are:
● Recently, Govt. of India has withdrawn the import duty on crude oils and
this has facilitated increase in import of edible oils, viz. palm oil.
● Import of cheap oils like palm oil in India in comparison to available
edible oils (mustard oil) has decreased the demand of mustard oil in the
59
market, which is ultimately affecting the small and medium oil processing
sectors.
● Availability of raw material is not a cause of low demand; it is only due to
low price of imported oils and blended oil.
● No new oil mill/processing unit has been established in the Bharatpur district
during the past 5 years and the utilization capacity has been reduced to 20
per cent.
Market research
Bharatpur mandi is the biggest market of rapeseed-mustard in Rajasthan, which
is known as Bharatpur Nai Mandi. It is a regulated market with 150 licensed
traders. The total number of markets in Bharatpur district is nine. Each tahsil has
a market. Bharatpur tahsil and other nearest small mandies provide the adequate
amount of input to Bharatpur mandi. The peak marketing season is March to
June, when maximum business in respect of rapeseed-mustard takes place. The
demand and supply scenario of Bharatpur mandi based on survey is given below:
Table 3. Demand and supply scenario of Bharatpur Mandi, Bharatpur
Particulars Season Off-season
Availability of input 4000-5000 bags* 1500-2000 bags
(demand) Highest = 10000 bags
Supply 4000-5000 bags 1500-2000 bags
Highest = 10000 bags
Price trend Rs 2400/q Rs 2580/q
*1 bag=85 kg
The demand and supply of mustard in Bharatpur mandi match each other
because whatever quantity of mustard arrives in the market, is sold on the same
day; the millers buy the total quantity of mustard, irrespective of peak season
or off-season. However, the price fluctuates, highest in off-season and lowest in
peak-season. The price fixation is another important component of the market.
Current price of Bharatpur mandi is 2580/q (2010). The market price is fixed
on auction basis by the executives of regulated market. The price is fixed on the
basis of oil percentage in the mustard seed. Generally, 42 per cent oil-content in
mustard is preferred. ‘Rohini’ variety is highly popular among the millers as it
contains highest oil percentage. The farmers also prefer this variety as they get
higher price compared to other less oil-containing varieties. Presently, the market
price for 42 per cent oil-containing mustard seed is Rs 2580/q which is @ 61.42
per 1 per cent of oil. At this rate, farmers will get the price of their produce
depending on percentage of oil-content.
60
The transportation cost of mustard per bag is Rs 10-25 and each farmer has
to pay Rs 5 as the market charge. Millers pay sale tax @ 4 per cent and mandi
tax @ 2 per cent in Bharatpur mandi. The role of trader in the market is very
important. The traders of Bharatpur mandi directly collect the mustard seed
and pay the farmers in cash. They store the produce and supply to the millers.
The Bharatpur mandi of rapeseed-mustard has seasonal availability as 3400-
4250 q/day and off-season availability of 1275-1700 q/day. Sometimes, rapeseed-
mustard is stored by traders in warehouses (1500- 2000 bags) for achieving higher
profit in a short period. In the case of prolonged storage, the oil-content of
mustard decreases.
Farmers opined that the market rate should be fixed based on essential
unsaturated fatty acid (linoleic and linolenic acids) content in mustard instead
of the existing practice. Farmers want intervention of Directorate of Rapeseed-
Mustard Research, Bharatpur, Rajasthan (ICAR) in sensitizing the district
administration as well as standardizing the method of ascertaining the linoleic
and linolenic acids content. They expressed their desire to formulate such a
plan so that their produce can be sold right at the village. Presently, farmers
carry the produce to the market and sell it to the traders.
Survey report of Junagadh district (Gujarat) on groundnut
A survey was also conducted in the district of Junagadh in collaboration with
the Directorate of Groundnut Research, Junagarh, Gujarat to envisage different
parameters, viz. market research, survey of oil processors and constraint analysis
of growers. The data were collected from farmers, traders and oil millers with
the help of checklist and semi-structured interview schedule through individual
and focused group discussions. The analysis of data was done using descriptive
statistics.
There are four oil mills (oil processing units) in operation in the Junagadh
district. Out of these four, three are for edible oil and one is for non-edible oil
and in total 25 oil processing units are operational in the state. All of them have
solvent extraction and three of them also have oil refinery unit. The capacity of
oil mill namely, Jagdeesh Export Industries, a unit under survey, was 200
tonnes/day and 74,000 tonnes/year for oilcake, but currently it is used only to
the extent of 30 per cent in oil mill unit, 50 per cent in oil cake unit and 20 per
cent in groundnut husk unit. The peak season for groundnut processing is
November to January, with lean season from August to October during which
they process 3000-4000 tonnes/day and 1000-1500 tonnes/day, respectively
(Table 2). Rapeseed and mustard oil is processed in the same unit during
February-June. The millers themselves are involved in packaging, branding,
labelling and marketing.
61
It was also observed that the utilization of processing unit investigated in
terms of input and output was 70-75 per cent before the enactment of free
import duty by the Government of India. Currently, there is no import duty on
crude oil but on oilseed (raw material), it is 25-30 per cent. In fact, there exists
a huge deficit in the demand and supply of edible oils in the country and this
gap is being bridged through import of palm oils from Malaysia and Indonesia.
Moreover, discussions with the processors also revealed that the policy decision
to allow intermixing of different edible oils to the certain limit has also favoured
the big players in the oil sector. As a consequence, the medium and small sized/
capacity oil processing units are witnessing a decline in their business profile
because of stiff price competition. The traders and oil mills do not get any
support from the government policy for the marketing and processing of
groundnut. The Gujarat Government does not provide any subsidy for the
Table 4. Scenario of groundnut processing industry in Junagadh
S. No. Particulars Figures
1 No. of processing industry in Junagadh district (No.) 4
2 No. of processing industry in Gujarat state (No.) 25
3 Capacity of one visited oil mill (tonnes/day) 200
74,000
4 Seasonal capacity of oil mills (tonnes)
Season (November- January) 3000-4000
Lean season (August- October) 1000-1500
5 Direction of uses (%)
Oil mill 30
Oil cake 50
Groundnut husk 20
6 Utilization of processing unit (input and output) (%) 70-75
Table 5. Major constraints reported by oil processors
S. No. Constraints Rank
1 Import of low priced oil in India in comparison to available edible I
oil (groundnut oil) has decreased the demand of groundnut oil in
the market, which has ultimately affect the small and medium oil
processing sector
2 Availability of raw material is not a cause of low demand; it is II
only due to low price of imported oils and blended oil
3 Recently, Govt. of India has withdrawn the bound duty on III
imported oils and this has facilitated an increase in import of
edible oils, viz. palm oil
4 Air and water pollution related taxes are paid by major industries IV
62
purchase of machinery. The millers in Junagadh reported that policy related
issue had very severely affected the small-scale oil processing industries. The
major constraints highlighted by the processors are listed in Table 5.
Issues identified in groundnut processing
The issues identified in ground processing are:
1. Price competition with MNCs
2. Non-availability of raw material adequately
3. Non-availability of new technology
4. Multi-layered marketing channel
5. Non-availability of timely credit
Market research
Junagadh mandi known as Sardar Ballabh Bhai Patel Marketing Yard, is the
biggest market of groundnut in Gujarat. It is an APMC market in Junagadh. It
is a regulated market with 240 licensed traders and other than these, there are
700 such traders in the Junagadh tahsil. The peak season of market is October
to January, when maximum business in respect of groundnut takes place. Several
criteria for price fixation of groundnut are adopted by the traders. These included
size, colour, weight, variety and source of the produce. But, traders give more
preference to variety and area of production of groundnut while deciding the
price. The market price is fixed through open auction basis conducted by the
executives of regulated market. During the survey period (August, 2010), the
price of groundnut in Junagadh mandi was Rs 2575/q for big pod and Rs 2293/
q for small size groundnut. The variety GG-20 holds the largest share (80%) in
the market. The market price is disseminated to the groundnut growers through
local newspapers and Vayada Bajar news through television. The price trend in
the market recorded during survey is presented in Table 6.
Price analysis of the past three years indicated an increase of 28.57 per cent
and 42.86 per cent in the years 2008-09 and 2009-10, respectively over the base
year 2007-08. There are no taxes/charges paid by the farmers for availing the
facilities in the regulated market, but the auctioneer usually pays 50 paise per
hundred rupees. The unloading and weighing charge @ Rs 2.50 per 30 kg bag is
also paid by him. Further, commission agents or traders pay Rs 1 per 100 kg to
the APMC market as the market cess. The major constraints experienced by
the market personnel included inadequate storage shed, lack of modern oil-
testing laboratory, non-availability of modern high capacity sorting and grading
63
machine facility, etc. Besides, they suggested that access to internet facility for
the farmers for 24 hours will enable them to know the price fluctuations of
groundnut on every day basis.
Conclusions
An efficient oilseed processing industry is the basic pre-requisite for maximizing
economic returns to the oilseeds farmers and indeed to the society as well as for
providing a fair deal to the consumers. This was realized by the government in
the case of paddy and wheat, leading to the removal of all kinds of restrictions
on the scale, technology and location of milling units of these cereals. But,
unfortunately, several kinds of restrictions continue against the processing of
major oilseeds, including groundnut and mustard seed, in terms of scale and
technology. This has held down the efficiency of processing and exports, and
eventually has reduced the earnings of farmers. The time has come to do away
with all these restrictions. Better integration between the expelling and solvent
extraction sections of the industry can improve the overall efficiency of the
sector. The edible oil industry should take initiatives to increase oilseed
production by promoting contract farming in this sector.
Table 6. Monthly price trend of groundnut in Junagadh mandi
Year Month Big size price Small size price
(Rs/20kg bag) (Rs/20kg bag)
2008-09 October 440 485
November 436 440
December 456 436
January 431 451
March 425 423
2009-10 April 484 501
May 483 472
June 495 447
July 491 476
August 485 468
September 569 432
64
Demand Projections for
Edible Oils in India
IntroductionIndia is the largest producer of oilseeds in the world. Currently, its share in
world production is as high as 20 per cent for groundnut, 19 per cent for sesame,
12 per cent for rapeseed and 73 per cent for castor seed (FAO, 2009). The
domestic oilseeds production has shown a mixed trend over time. The oilseeds
production of the country has increased more than three-times between 1971-
72 and 2007-08, from around 9 Mt to more than 29 Mt, but declined subsequently
to around 25 Mt in 2009-10 (Table 1). As per the fourth advance estimates for
2010-11, the production of total nine oilseed crops is 31.10 Mt, which is a
quantum jump over the previous year production. However, productivity of
oilseeds in India is low, being around fifty per cent of the world average
Table 1. Year-wise domestic production, import and availability of edible oils in
India: 1971-72 to 2009-10
Year Domestic production Import of Total Imports as
(’000 tonne) edible oils availability percentage
(‘000 tonne) of edible oils* of total
Edible Edible (’000 tonne) availability
oilseeds oils
1971-72 9080.00 2543.00 86.00 2629.00 3.27
1975-76 10610.00 2922.00 67.00 2989.00 2.24
1980-81 9370.00 2560.00 1633.30 4193.30 38.95
1985-86 10830.00 2964.00 1036.40 4000.40 25.91
1990-91 18610.00 4877.00 525.80 5402.80 9.73
1995-96 22110.00 5668.00 1062.00 6730.00 15.78
2000-01 18440.00 4499.00 4267.90 8766.90 48.68
2005-06 27980.00 6906.00 4288.10 11194.10 38.31
2006-07 24290.00 5900.00 4269.40 10169.40 41.98
2007-08 29760.00 6964.00 4903.00 11867.00 41.32
2008-09 28160.00 6778.00 6714.00 13492.00 49.76
2009-10 24880.00 6170.00 8034.00 14204.00 56.56
*Edible oil plus vanaspati
Source: Economic Survey (various issues), Government of India, New Delhi
Chapter 5
65
productivity in different oilseeds. Besides varietal differences, lower oilseeds
production in India is on account of their cultivation largely under un-irrigated
conditions, dependence on rainfall and vulnerability to drought, disease and
pest damage, and low levels of input-use.
The domestic production of edible oils has also simultaneously increased
during the period from 2.5 Mt in 1971-72 to 6.8 Mt in 2008-09 (Table 2). The
increase in production of edible oils has, however, not compensated for the
Figure 1. Domestic production and import of edible oils in India: 1971-72 to 2009-10
Figure 2. Domestic production, imports and per-capita availability of edible oils in India
increase in demand for edible oils in the country, leading to a substantial increase
in the imports of edible oils over time. The proportion of imports in total
availability (domestic production plus imports) of edible oils has increased from
a meagre 3 per cent in 1970-71 to about 56 per cent in 2009-10.
Pro
duct
ion
(’000
ton
nes)
Qua
ntity
(’0
00 t
onne
s)
66
Edible oil consumption in India has been growing steadily. From around 5
Mt in 1990-91, the aggregate consumption of edible oils has gone up to 14 Mt
in 2009-10. The per capita availability of edible oils including vanaspati has
increased from 4.10 kg/person/year in 1971 to 14.00 kg/person/year in 2009-
10. Still the per capita availability of edible oils is quite low in India relative to
many other countries, especially developed countries. Between 1986 and 1993,
the per capita consumption of edible oils remained constant at about 6 kg/year.
But, with the introduction of measures aimed at liberalizing trade in 1994,
imports of edible oils increased leading to an increase in the per capita
consumption to around 10 kg/year. Groundnut, rapeseed- mustard, soybean
and palm oils together account for around 60 per cent of the edible oils consumed
in the country. The consumption pattern of edible oils shows wide variations
among different income groups as well as between urban and rural consumers
as per NSS household consumer expenditure survey.
Household consumption pattern of major edible oils
In both rural and urban India, the share of food in total expenditure continues
to decline. Analysis of the NSSO consumer survey data for 1972-73 and 2004-
Table 2. Monthly expenditure on edible oils for major states and all-India: 2004-05
(Rs/capita)
State Rural areas Urban areas
Andhra Pradesh 28.00 31.97
Assam 26.58 38.62
Bihar 23.51 29.92
Chhattisgarh 19.85 34.40
Gujarat 43.57 57.82
Haryana 19.01 29.12
Jharkhand 22.40 36.70
Karnataka 23.00 29.97
Kerala 26.62 30.56
Madhya Pradesh 20.48 31.47
Maharashtra 33.90 44.15
Odisha 16.17 24.57
Punjab 33.66 38.56
Rajasthan 21.93 31.17
Tamil Nadu 24.14 31.71
Uttar Pradesh 28.68 34.96
West Bengal 27.44 40.67
All-India 25.72 36.37
67
05 showed that the overall decline was from 73 per cent to 55 per cent in the
rural India and from 64 per cent to 42 per cent in urban India during this period.
While the consumption of edible oils is generally increasing in the country, the
share of expenditure on edible oils in total consumption expenditure has shown
a declining trend in urban areas and a variable trend in the rural areas over
time.
Gujarat (Rs 43.57) and Maharashtra (Rs 33.90) have the highest average
monthly expenditure per person on edible oils in the rural areas. Odisha
(Rs 16.17) and Haryana (Rs 19.07) show the lowest average monthly expenditure
per person on edible oils in both rural and urban areas (Table 3). In terms of
Table 3. Percentage share of total monthly per capita expenditure on edible oils
consumption for major states and all-India: 2004-05
State Rural areas Urban areas
Andhra Pradesh 4.78 3.14
Assam 4.89 3.65
Bihar 5.64 4.30
Chhattisgarh 4.67 3.47
Gujarat 7.31 5.18
Haryana 2.20 2.55
Jharkhand 5.27 3.72
Karnataka 4.52 2.9
Kerala 2.63 2.37
Madhya Pradesh 4.66 3.48
Maharashtra 5.97 3.84
Odisha 4.05 3.24
Punjab 3.98 2.91
Rajasthan 3.71 3.23
Tamil Nadu 4.01 2.94
Uttar Pradesh 4.43 3.57
West Bengal 4.88 3.62
All-India 4.60 3.46
shares of expenditure on edible oils in total consumption expenditure, Gujarat
and Maharashtra have high shares while Odisha, Haryana and Kerala are the
states which have low shares.
Over time, the monthly per capita expenditure on edible oils has shown a
considerable increase at current prices. Between 1972-73 and 2004-05, the
consumption expenditure per month on edible oils has increased from Rs 1.55
to Rs 25.72 in the rural areas and from Rs 3.07 to Rs 36.37 in the urban areas
(Table 4). Temporally, for the rural consumers, the share of expenditure on
68
Table 4. Trends in expenditure on edible oils consumption at current prices from
1972-73 to 2004-05, all-India (rural and urban)
(Rs/capita/month)
NSSO round and year All-India (Rural) All-India (Urban)
27th round (1972-73) 1.55 3.07
32nd round (1977-78) 2.46 4.46
38th round (1983) 4.53 7.98
43rd round (1990-91) 7.88 13.23
50th round (1993-94) 12.5 20.1
55th round (1999-2000) 18.16 26.81
61st round (2004-05) 25.72 36.37
Table 5. Trends in percentage share of total consumer expenditure on edible oils
from 1972-73 to 2004-05, all-India (rural and urban)
NSSO round and year All-India (Rural) All-India (Urban)
27th round (1972-73) 3.50 4.90
32nd round (1977-78) 3.60 4.60
38th round (1983) 4.00 4.80
43rd round (1990-91) 5.00 5.30
50th round (1993-94) 4.40 4.40
55th round (1999-2000) 3.70 3.10
61st round (2004-05) 4.60 3.50
edible oils in total consumption expenditure has shown a mixed trend. It
increased from 3.50 per cent in 1972-73 to 4.00 per cent in 1983 and 5.00 per
cent in 1990-91 and declined subsequently to 4.60 per cent in 2004-05 (Table 5).
In the case of the urban consumers, a steady decline in the share is evident.
Trends in the consumption pattern of different edible oils
At the aggregate level, the total and per capita consumption of edible oils
has been increasing over time. The trend in per capita consumption of edible
oils during 1993-94 to 2009-10 is presented in Table 6. Consumption of all
edible oils per month has increased from 0.37 kg and 0.56 kg in rural and
urban India, respectively in 1993-94 to 0.64 kg and 0.82 kg in 2009-10. This
shows an increase of 72 per cent and 46 per cent, respectively among rural
and urban households. A generally increasing trend in consumption is also
evident in the case of different edible-oils products in both rural and urban
areas. The only exception to this seems to be groundnut oil which has shown
a decline between 1993-94 and 2004-05 in both rural and urban areas. The
69
decline was around 66 g/person/month in rural areas and 114 g/person/
month in urban areas for groundnut oil. The per capita per month
consumption of vanaspati has remained generally unchanged over the period.
There appears to be some substitution in the consumption of different oils
as the per capita consumption of mustard oil, other oils and total edible oils
has increased offsetting the decline in consumption of some edible oils. In
both rural and urban India, the per capita consumption of other oils which
includes oils like sunflower oil, soybean oil, other vegetable oils and rice
bran oil, has increased substantially by around 386 per cent and 271 per
cent, respectively during the period 1993-94. Interestingly, it is the other oils
category comprising sunflower, soybean, and other vegetable oils, whose
consumption was high in most states. This reflects the changing pattern of
urban life-styles and greater concern for consumption of healthier edible
oils, particularly among urban consumers and outlines the need for
diversification in oilseeds and edible oils production.
Table 7 depicts the percentage distribution of households consuming
different edible oils during the period 1993-94 to 2004-05. The percentage of
urban households using groundnut oil dropped in 2004-05 to 21 per cent, i.e. to
Table 6. Trends in per capita consumption of different edible oils in India
(kg/month)
Item 1993-94 1999-2000 2004-05 2009-10
Rural Urban Rural Urban Rural Urban Rural Urban
Groundnut oil 0.120 0.240 0.120 0.230 0.070 0.160 0.054 0.126
Mustard oil 0.170 0.150 0.240 0.250 0.220 0.200 0.287 0.230
Vanaspati 0.030 0.060 0.040 0.060 0.030 0.050 0.036 0.036
Edible oils (others) 0.050 0.110 0.090 0.170 0.140 0.250 0.243 0.408
All edible oils 0.370 0.560 0.500 0.720 0.480 0.660 0.636 0.818
Source: Various rounds of NSS household consumer expenditure survey
Table 7. Percentage distribution of households consuming different edible oils
between 1993-94 and 2004-05
Year Groundnut oil Mustard oil* Vanaspati Other edible oils** All edible oils
Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban
1993-94 30.40 40.00 50.70 35.00 11.60 21.30 N.A. N.A. 97.80 92.50
1999-2000 24.80 31.80 50.10 35.70 13.50 19.10 21.50 28.70 98.00 94.60
2004-05 13.80 20.90 51.10 37.60 13.70 16.00 31.90 41.50 98.00 94.50
*Includes margarine in 1999-2000, **Excluding coconut oil
70
half of what it was in 1993-94 (40 %). Among the rural households, it fell to 14
per cent in 2004-05 from 30 per cent in 1993-94.
Regional variations in consumption of edible oils in India
In accordance with the diverse food habits and tastes and preferences of
consumers, considerable regional variability exists in the consumption of various
edible oils in the country and also between rural and urban areas. The Tables 8
and 9 present the state-wise consumption of major edible oils in the rural and
urban areas of the country during the year 2004-05. In rural areas, the highest
per capita monthly consumption for all types of edible oils was observed in
Gujarat (0.818 kg), and the lowest consumption was in the state of Odisha
(0.284 kg), the average consumption in the country being 0.484 kg. Groundnut
oil was the major oil consumed in Gujarat with nearly 50 per cent of its total oil
consumption being accounted for by this oil. It was followed by the other oils
category consumption. The consumption of vanaspati and coconut oil was very
low in Gujarat. Among the other edible oils, rural households in Assam, Bihar,
Jharkhand and Uttar Pradesh consumed substantial quantities of mustard oil,
Table 8. Monthly per capita consumption of edible oils across states—Rural India:
2004-05
(in kg)
State Vanaspati Mustard oil Groundnut oil Coconut oil Others Total
Andhra Pradesh 0.001 0.001 0.239 0.001 0.312 0.554
Assam 0.011 0.439 0.002 0.000 0.003 0.455
Bihar 0.033 0.385 0.001 - 0.001 0.420
Chhattisgarh 0.008 0.084 0.019 - 0.285 0.396
Gujarat 0.005 0.026 0.432 0.005 0.350 0.818
Haryana 0.169 0.173 0.002 - 0.034 0.378
Jharkhand 0.022 0.365 0.002 - 0.003 0.392
Karnataka 0.003 0.000 0.172 0.011 0.259 0.445
Kerala 0.003 0.000 0.006 0.283 0.128 0.420
Madhya Pradesh 0.017 0.126 0.010 0.001 0.270 0.424
Maharashtra 0.016 0.003 0.163 0.002 0.475 0.659
Odisha 0.009 0.195 0.005 0.000 0.075 0.284
Punjab 0.438 0.155 0.006 - 0.057 0.656
Rajasthan 0.005 0.215 0.035 0.000 0.164 0.419
Tamil Nadu 0.000 0.000 0.230 0.003 0.207 0.440
Uttar Pradesh 0.062 0.403 0.002 0.000 0.005 0.472
West Bengal 0.005 0.471 0.002 0.000 0.007 0.485
All-India 0.034 0.225 0.072 0.01 0.143 0.484
71
Table 9. Monthly per capita consumption of edible oils across states — Urban India:
2004-05
(in kg)
State Vanaspati Mustard oil Groundnut oil Coconut oil Others Total
Andhra Pradesh 0.001 0.002 0.244 0.003 0.370 0.620
Assam 0.028 0.568 0.001 - 0.052 0.649
Bihar 0.067 0.466 0.001 0.000 0.017 0.551
Chhattisgarh 0.013 0.104 0.105 0.001 0.419 0.642
Gujarat 0.019 0.031 0.639 0.005 0.364 1.058
Haryana 0.154 0.233 0.014 - 0.158 0.559
Jharkhand 0.086 0.481 0.006 0.000 0.065 0.638
Karnataka 0.002 0.000 0.231 0.005 0.315 0.553
Kerala 0.005 0.000 0.004 0.317 0.147 0.473
Madhya Pradesh 0.032 0.125 0.076 0.007 0.401 0.641
Maharashtra 0.026 0.020 0.359 0.004 0.385 0.794
Odisha 0.021 0.304 0.003 0.000 0.093 0.421
Punjab 0.377 0.209 0.025 0 0.131 0.742
Rajasthan 0.014 0.208 0.169 0.001 0.191 0.583
Tamil Nadu 0.002 0.000 0.143 0.003 0.405 0.553
Uttar Pradesh 0.096 0.405 0.002 0.000 0.055 0.558
West Bengal 0.011 0.601 0.005 0.000 0.075 0.692
All-India 0.049 0.196 0.157 0.011 0.249 0.662
while Kerala consumed a lot of coconut oil in rural areas. In Punjab, vanaspati
accounts for a major proportion of the total edible oils consumption in rural
areas.
The per capita monthly consumption of all types of edible oils was relatively
higher in urban areas than rural areas of the country. The maximum
consumption of all types of edible oils was once again observed in Gujarat
(1.058 kg), followed by Maharashtra (0.794 kg) and Punjab (0.742 kg). Kerala
was the only state where a significant quantity of coconut oil was consumed in
urban areas. Consumption of vanaspati in urban areas was relatively high in the
northern states of Punjab, Haryana and Uttar Pradesh, while consumption of
mustard oil was high in the eastern states of West Bengal, Bihar, Jharkhand
and Assam.
Interestingly, it is the other oils category comprising sunflower, soybean,
and other vegetable oils, whose consumption was high in most states. This
72
reflects the changing pattern of urban life-styles and greater concern for
consumption of healthier edible oils, particularly among the urban
consumers and outlines the need for diversification in oilseeds and edible
oils production.
Demand supply projections for edible oils
The demand for edible oils in the country is increasing due to population
growth and increase in per capita income, particularly of households in the
lower and upper middle class. Price is another important factor affecting their
demand. Assessment of demand and supply is one of the most crucial exercise
for formulating a suitable policy and strategy to bridge the gap between domestic
production and demand. The demand projections for edible oils relate to
dynamics of population and their consumption over time and space.
As mentioned earlier, the periodically conducted nationwide household
consumer expenditure surveys by National Sample Survey Organisation (NSSO)
provide detailed cross-sectional estimates of per capita consumption for different
commodities including edible oils. The 66th Round of NSSO is the latest
quinquennial survey, hence the year 2009-10 has been used as the base period
for making demand projections. Demand for edible oils was projected by taking
into account the mid-year projected population, population growth, growth in
per capita income and expenditure elasticity of demand. The Registrar General
of India (RGI) has published the mid-year projected population figures for 2001
up to 2026. For this study, we have adjusted the total projected population of
the country for the years 2016 and 2020 for the underestimations observed in
the case of actual figures of 2011 population census. It was assumed that Indian
economy in the next 5 to 10 year would grow at the average rate of 9 per cent
per annum, as envisaged in the approach paper of the Planning Commission.
This was further adjusted for the annual population growth for these two periods.
In this study, two approaches have been adopted for projecting the demand
of oilseeds for domestic use. The first approach to estimate the demand is the
normative approach which is based on the Recommended Daily Allowances
(RDA) of oils & fats, according to World Health Organisation (WHO). The
RDA for oils & fats according to WHO is 30 g/day or 11 kg/ annum. The
normative demand of edible oils is 14.16 Mt in 2016-17 and 14.94 Mt in 2020-
21. The behavioural characteristics of the consumer demand system were
measured in the form of elasticity. Expenditure elasticity estimates of 0.55,
computed using the food characteristic demand system in a study, were used to
estimate and incorporate income effects. In the latest round of NSS survey, the
per capita consumption of edible oil for total population is estimated as 8.39
kg/annum, which has been used for projecting the future requirement of oilseeds
in the country.
73
The per capita demand for edible oils is projected to further increase to
12.70 kg/annum by 2016-17 and to 15.0 kg/annum by 2020-21. Based on these
projections and population projections, demand for edible oils is expected to
rise to 16.34 Mt in 2016-17 and 20.36 Mt in 2020-21, i.e. towards the end of 12th
and 13th plans, respectively.
For projecting the requirement of oilseeds, a norm of 28 per cent of gross
output was used for oil recovery rate from oilseeds, as per the suggestion of the
Ministry of Consumer Affairs, Food and Public Distribution, which also takes
into account seed, feed & wastage, and other secondary/industrial usages. The
oil recovery rate, however varies from 18 per cent in soybean, and 28 per cent in
groundnut to 33 per cent in rapeseed-mustard among major oilseeds.
In the literature, different approaches have been employed for the supply
projections. In this study, the supply projections have been worked out using
compound annual growth rates (CAGR) of area and productivity during the
previous decade after smoothing the time series data using moving average of
three years. During the previous decade, the area and yield of oilseeds grew
with a CAGR of 2.13 per cent and 2.44 per cent, respectively. Assuming a
business as usual (BAU) scenario with no significant technological
breakthroughs, taking the yield level of 1026 kg/ha (TE 2008-09), domestic
edible oils production is projected at 10.55 Mt in 2016-17 and 13.23 Mt in
2020-21. Realisable yield in national demonstration for all the major oilseeds
taken together with improved production technologies has been estimated in a
study as 1545 kg/ha. The optimistic scenario (OS) for supply projection of
edible oils by taking into account the potential yield worked out to be 13.43 Mt
in 2016-17 and 14.92 Mt in 2020-21. Given the projected demand of 16.34 Mt
and 20.36 Mt of edible oils, even under the optimistic scenario of supply
Table 10. Demand supply projections for edible oils in India
Particulars 2016-17 2020-21
Total behaviouristic demand (Mt) 16.34 20.36
Per capita consumption (kg/annum) 12.70 15.00
Total normative demand (Mt) 14.16 14.94
Total area under oilseeds (M ha) 31.05 34.50
Yield (tonnes/ha) 1.21 1.37
Domestic supply of edible oils (Mt), (BAU) 10.55 13.23
Domestic potential supply of edible oils (Mt), (OS) 13.43 14.92
Source: Authors’ computation
74
projection, there will be a gap of 2.91 Mt by the end of 12th plan and of 5.44 Mt
by 13th Plan, which will have to be met through imports.
The demand for edible oilseeds is projected to grow at 12.55 per cent per
year during 12th Plan on account of increase in population and economic growth.
This growth rate is more than two and half times of the growth rate experienced
in the domestic production of oilseeds during the previous decade. This clearly
indicates that the current level of oilseeds production and the prevailing trends
in production, productivity and other determinants of edible oils availability in
the country are way below the requirements. This scenario needs to be reversed
if the country has to achieve self-sufficiency in edible oils production and reduce
our dependence on imports of these oils. The major avenues for future increases
in oilseeds production are expected to come from enhancement in productivity
of oilseed crops. To realize this expectation, a proper mix of technologies and
strategies needs to be put in place. Given the difficulties involved in increasing
the area under oilseed crops, a combination of land-saving technologies involving
high-yielding varieties and hybrids, and an efficient crop management need to
be adopted.
75
Trade Pattern and Tariff Policies
in Edible Oils
The analysis given in the previous chapter has shown that consumption of edible
oils in the country is increasing. Since the domestic production of edible oils
has not been able to match their growing demand, significant quantities of
various edible oils had to be imported from time to time to meet the domestic
requirement. Imports of edible oils have serious implications for the domestic
prices of these oils as imports subject the domestic market to the influences of
international price volatility. Thus, it is important to analyze the pattern of
edible oils imports and the variability in imports before analyzing the volatility
in prices.
Imports of edible oils
Imports of total edible oils have shown considerable inter-year fluctuations
between 1980-81 and 2009-10. Significant changes are evident in the quantum
of imports of edible oils with reference to the periods that mark the
implementation of the Technology Mission on Oilseeds (TMO) and the
emergence of the new trade regime after the establishment of the World Trade
Organisation (WTO). Two years after the implementation of TMO, imports of
edible oils decreased significantly and continued to remain low till 1994-95.
From a high quantum of 1945 thousand tonnes in 1987-88, imports came down
to 324 thousand tonnes in 1989-90 and to 102 thousand tonnes in 1992-93 and
114 thousand tonnes in 1993-94 (Economic Survey, GOI). Imports started rising
again after the establishment of the WTO and the initiation of trade-related
reform measures. From around 347 thousand tonnes in 1994-95, imports rose
to 1062 thousand tonnes in 1995-96 to 4196 thousand tonnes in 1999-2000, and
further to 8034 thousand tonnes in 2009-10. With the exception of rapeseed-
mustard oil in recent years, increase in the imports of other edible oils and
substantial inter-year variability in imports have been observed.
Imports of edible oils in India show a considerable variability over time.
The quantum of soybean imports has shown a declining trend during 1980-81
to 1989-90 and subsequently tended to stagnate till 1997-98. From 1998-99 to
2005-06, a sharp increasing trend is observed in the quantum of soybean oil
imports. The pattern is almost similar in respect of the value of soybean oil
Chapter 6
76
imports. Quantum and value of palm oil imports show a similar trend. After
showing a declining trend till 1997-98, the prices of imports of palm oil have
risen sharply. Import duties on edible oils were reduced to 15 per cent during
1998-99 and this may be one reason for the surge in imports during this year.
The high coefficients of variation indicate high degree of inter-year variability
in imports.
Compound annual growth rate and variability in value and quantum of
imports of major edible oils were computed for the period 1980-81 to 2009-10
and also for the periods 1980-81 to 1994-95 and 1995-96 to 2009-10. It is evident
from Tables 1 and 2 that for soybean oil and palm oil, which are the major
import items for India, imports have grown at a rapid rate. High values of
coefficients of variation for both these, as well as other oils, indicate high degree
of inter-year fluctuations in imports. The compound annual rate of growth for
coconut oil import is also very high, but this may be accounted for by the low
base year values as the quantum and value of import of coconut oil in the early-
1980s were very small.
Table 1. Compound annual growth rate (CAGR) and coefficient of variation (CV)
of value of imports of edible oils
Edible oil CAGR (%) CV (%)
1980-81 to 2009-10
Soybean oil 13.04 119.99
Palm oil 18.04 132.26
Sunflower seed, Safflower or Cottonseed oil * 30.17 104.18
Coconut oil 24.60 175.48
Rapeseed-mustard oil -13.09 176.19
1980-81 to 1994-95
Soybean oil -12.92 66.53
Palm oil -3.90 51.66
Sunflower seed, Safflower or Cottonseed oil - -
Coconut oil 2.88 104.20
Rapeseed-mustard oil -25.94 96.40
1995-96 to 2009-10
Soybean oil 26.96 66.08
Palm oil 13.00 70.46
Sunflower seed, Safflower or Cottonseed oil 1.93 92.20
Coconut oil 42.30 107.48
Rapeseed-mustard oil -23.71 193.19
*1993-94 to 2009-10
77
Exports of oil meals from India
India is one of the largest exporters of oil meals, particularly of soybean meal.
In this study, the export data of de-oiled cake have been analysed from 1980 to
2009-10 and the projection of export has been carried out to the final year of
12th Five-Year Plan.
Table 2. Compound annual growth rate (CAGR) and coefficient of variation (CV)
of quantum of edible oils import
Crops CAGR (%) CV(%)
1980-81 to 2009-10
Soybean oil 6.15 88.86
Palm oil 9.42 90.65
Sunflower seed, Safflower or Cottonseed oil * 27.62 87.58
Coconut oil 16.25 140.31
Rapeseed-mustard oil -19.54 132.56
1980-81 to 1994-95
Soybean oil -23.19 90.85
Palm oil -13.00 58.70
Sunflower seed, Safflower or Cottonseed oil - -
Coconut oil -5.57 141.63
Rapeseed-mustard oil -35.75 97.33
1995-96 to 2009-10
Soybean oil 24.65 61.91
Palm oil 11.25 46.55
Sunflower seed, Safflower or Cottonseed oil -3.35 75.34
Coconut oil 38.59 86.08
Rapeseed-mustard oil -26.05 200.37
*1993-94 to 2009-10
Figure 1. Imports of edible oils in India: 1980-81 to 2008-09
78
The exports of oil meals has increased substantially since 2000-01 as revealed
by the higher compound annual rate of growth during 2000-2010 relative to
earlier periods (Tables 3 and 4). The recent years present a promising trend in
oil meals exports with a compound annual rate of growth of 16 per cent in
quantum and 25 per cent in value of their exports. Based on the trend in recent
years (2004-10), the exports of oil meals from India were projected to 2016-17.
It is expected that India will be exporting 8.59 Mt of oil meals by the year 2016-
17. The ratio of oil meals exports to total oilseeds production is also indicative
of the prospects for future exports. This ratio shows a generally increasing trend,
which is favourable for oil cakes exports.
Table 3. Trend in exports of oil meals from India: 2000-01 to 2009-10
Year Oil meals exports Oilseeds production Ratio
(Mt) (Mt) (Exports/Production)
2000-01 2.42 18.44 0.13
2001-02 2.78 20.66 0.13
2002-03 1.78 14.84 0.12
2003-04 3.25 25.19 0.13
2004-05 3.60 24.35 0.15
2005-06 5.98 27.98 0.21
2006-07 6.44 24.29 0.27
2007-08 6.91 29.76 0.23
2008-09 6.74 27.72 0.24
2009-10 4.67 24.88 0.19
2016-17 8.59 58.4 0.15
(Projected value)
Table 4. Growth in exports of oil meals from India
CAGR* Oil meals exports Oilseeds
(%) Quantum Value production
1980 - 1990 5.94 11.78 5.45
1990 -2000 5.17 20.04 2.25
2000 - 2010 13.70 20.91 5.14
2004 - 2010 16.34 24.62 0.81
1980 - 2010 7.06 16.81 4.27
*Computed on the bases of three-year moving averages
79
The growth in Indian economy has also strengthened the demand for animal
products and consequently, for coarse grains and oil meals for animal and poultry
feed. The consumer-driven emergence of India’s livestock products sector and
the accompanying growth in demand for commercial feeds combined with the
increasing level of exports is a significant positive indicator of the future prospects
of India’s oilseeds sector.
India’s emergence as an important source of import demand sparked
expectations in the U.S. oilseed sector of a significant boost in edible oil sales to
India. India’s oil imports form a big share in world trade especially in palm and
soybean oil. It ranks among the top ten importers of palm and soybean oil.
Table 5 clearly shows that the India ranked second in import of soybean oil and
palm oil (1018 and 3943 thousand tonnes, respectively in TE 2008-09),
accounting for 9 per cent and 13 per cent of world imports.
Figure 2. Oil cake exports, quantity (Mt) and value (Rs crore): 1980-81 to 2008-09
Table 5. India and the world: Top ten importers of soybean oil and palm oil:
TE 2008-09
Soybean oil Country Palm oil
Country Quantity % of Quantity % of
(’000 tonnes) world total (’000 tonnes) world total
China 2337.31 20.79 China 5278.70 17.74
India 1018.00 9.06 India 3943.57 13.25
Iran 576.46 5.13 Pakistan 1712.54 5.75
Bangladesh 421.98 3.75 Netherlands 1658.27 5.57
Morocco 377.25 3.36 Bangladesh 1055.94 3.55
Algeria 364.47 3.24 Germany 832.23 2.80
Venezuela 333.28 2.97 United Kingdom 804.75 2.70
Peru 322.64 2.87 USA 682.59 2.29
Republic of Korea 317.13 2.82 Russian Federation 645.59 2.17
South Africa 298.27 2.65 Malaysia 603.62 2.03
Source: FAOSTAT
80
Behaviour of prices of edible oils
The prices of edible oils have shown a steady upward trend over time. The
wholesale price indices (WPI) for groundnut oil, soybean oil and mustard oil
have been presented in Table 6. During the period 1997-98 to 2009-10, the indices
of wholesale prices show a generally upward trend. Only in two years, 2000-01
and 2001-02, a decline occurred in the WPI. This period also saw a decline in
the international prices of these oils. This gives credence to the fact that on
account of huge import volumes, the edible oils prices in India are subject to
the volatility in international prices. The coefficients of variation in the WPI
ranged between 18 and 23 per cent for these oils indicating a moderate degree
of variability.
Table 6. Trend and variability in wholesale price indices of edible oils: 1997-98 to
2009-10
Year Groundnut oil Rapeseed-mustard oil Soybean oil
1997-98 123.60 115.50 100.50
1998-99 150.20 179.60 134.80
1999-00 137.60 140.10 113.00
2000-01 129.10 112.10 86.70
2001-02 135.80 121.10 86.90
2002-03 166.60 147.30 122.70
2003-04 181.20 193.90 135.80
2004-05 173.80 177.10 138.10
2005-06 168.20 159.80 137.40
2006-07 189.80 165.70 132.40
2007-08 231.80 194.00 142.90
2008-09 227.60 232.50 153.40
2009-10 221.70 209.10 147.70
CV (%) 21.70 22.56 17.66
Note: CV: Coefficient of variation
In order to assess how the prices of edible oils have fared relative to the
prices of other major food categories, a comparison was made between the
wholesale price indices of edible oils, cereals and pulses. While all the three
product categories show an upward trend, the WPI for edible oils has remained
below that of cereals and pulses during 1997-98 and 2009-10 (Table 7). Inter-
year variability in wholesale prices was lowest in the case of cereals (17.53 %),
followed by edible oils (18.43 %) and highest in pulses (26.01 %).
81
Import prices of edible oils
Soybean oil and palm oil constitute a bulk of the total edible oils imported into
India. Figure 4 shows the temporal changes in imports of these two edible oils
by India. The imports of soybean oil in quantity terms showed a declining
trend between 1980-81 and 1990-91, after which there was stagnation with low
levels of soybean oil import.
Table 7. Trend in wholesale price indices of edible oils, cereals and pulses: 1997-98
to 2009-10
Year Edible oils Cereals Pulses
1997-98 113.50 138.40 145.90
1998-99 139.10 150.90 160.10
1999-00 122.10 177.80 166.10
2000-01 103.30 173.00 179.60
2001-02 112.90 170.10 189.20
2002-03 138.00 173.50 180.60
2003-04 157.90 176.30 176.60
2004-05 156.40 177.90 174.40
2005-06 146.00 185.80 194.90
2006-07 154.60 199.40 254.20
2007-08 175.10 211.70 243.10
2008-09 188.10 230.50 259.80
2009-10 177.30 261.70 334.30
CV (%) 18.43 17.53 26.01
Note: CV: Coefficient of variation
Figure 3. Trend in wholesale price index of edible oils, cereals and pulses (Base year: 1993-94 = 100)
82
It was probably on account of the impetus provided by the TMO to domestic
production. The situation was not very different in the case of palm oil imports.
India’s imports of palm oil showed a rapid upward trend after 1995-96.
Figure 4. Trend in imports of soybean oil and palm oil by India: 1980-81 to 2009-10
The impact of imports on domestic prices is, among other factors, dependent
on the level of import prices. For the two major edible oils imported into India,
temporal changes in unit values of imports were analysed for two time periods,
namely, 1980-81 to 1994-95 and 1995-96 to 2009-10. For both soybean and
palm oils, the compound annual rates of growth in unit prices were higher in
the former than in the latter period (Table 8). To some extent, this may be on
account of the very low base values of imports. What is encouraging, however,
is that in the latter period, along with a decline in growth of unit values, there is
also a decline in the inter-year variability in unit values, as indicated by the
significant reduction in the coefficients of variation for both oils.
Table 8. Growth and variability in the unit import prices of soybean and palm oils
Edible oil Unit value of import (Rs / kg)
1980-81 to 1994-95 1995-96 to 2009-10
CARG CV (%) CARG CV (%)
Soybean oil 5.60 62.50 1.85 21.20
Palm oil 10.45 57.09 8.52 22.32
Note: CARG: Compound annual rate of growth (%), CV: Coefficient of variation (%)
83
Impact of imports on the domestic oilseeds economy
Imports of a commodity affect the supply and hence the domestic prices of that
commodity. In the case of edible oils, dependence on imports has been
increasing, as is evident from the import penetration index. The import
penetration index is the ratio of imports to apparent consumption (domestic
production minus exports plus imports) expressed as a percentage. This index
ranged from 18 per cent to 38 per cent during the period 1980-81 to 1988-89.
From 1989-90 to 1994-95, the impact of the Oilseeds Mission was clearly evident
and this index declined and ranged between 2 per cent and 10 per cent, indicating
reduced dependence on imports. Subsequently, from 1995-96 onwards the index
again showed a rising trend, increasing from around 16 per cent in 1995-96 to
57 per cent in 2009-10. The compound rate of annual growth of the import
penetration index was negative at -2.76 per cent per annum during 1980-81 to
1988-89 but increased substantially to 7.13 per cent during 1995-96 to 2009-10.
Even the variability was higher during the latter period (32.79 %) as compared
to the former period (22.20%). This clearly indicates the increasing dependence
on imports for edible oils and can be attributed to the fact that during the recent
period, production of edible oils has grown at a meagre rate of 1.58 per cent
per annum which is very low compared to the 5.03 per cent per annum rate of
growth in their demand. This has resulted in a 12.52 per cent rate of growth in
imports of edible oils.
Impact of edible oils imports on domestic prices
India supplements its supplies of edible oils through imports. During the period
1995-96 to 2009-10, the share of imports in total availability of edible oils in
India ranged between 16 per cent and 57 per cent, averaging around 37 per
Figure 5. Import penetration index for edible oils
84
cent. The imports influence prices through changes in the level of supply. Besides
supply levels, the landed price of the edible oils also influences their domestic
prices. The rate at which the unit values were increasing per annum has come
down considerably during the period 1995-96 to 2009-10 for both soybean oil
and palm oil as compared to the period 1980-81 to 1994-95 (Table 8).
An attempt was made to assess the impact of changes in supply through
imports on prices. Using the price elasticity of demand for oilseeds of 0.55, as
estimated by Kumar (1998), the proportionate changes in quantity and the
corresponding proportionate changes in price were computed. Based on the
average share of imports in total availability of oilseeds during 1995-96 to 2009-
10 of 36.69 per cent, it was assessed that if the price change is to be kept within
5 per cent, the share of imports in total availability should be 3.34 per cent.
Similarly, if the price change is to be kept within 10 per cent, 15 per cent, 20 per
cent, 25 per cent and 30 per cent, then the share of imports in total supply
should, respectively be 6.67 per cent, 10.01 per cent, 13.34 per cent, 16.68 per
cent and 20.01 per cent. On the other side, considering the supply elasticity as
0.50, heavy imports have impacted production in the range of 20-25 per cent as
oilseeds became less remunerative to the producers. This underlines the
importance of enhancing the production of edible oils so that the imports are
reduced and the consequent impact on domestic prices is minimized.
Given the increasing imports of edible oils into India after the liberalization of
trade, there is a growing concern for the possible negative impacts of the liberalized
imports on the domestic oilseeds sector. After the liberalization of trade and the
emergence of the WTO, India abolished all quantitative restrictions on the imports
of agricultural products. The means available to the country now were only tariffs.
In order to protect the interests of the domestic producers, recourse can be made to
tariff rates, but these are again subject to certain limits. Table 9 shows the bound
and applied rates of tariff for edible oils imports in India.
Figure 6. Trend between wholesale price index and import of edible oils
85
A comparison of applied and bound tariff rates shows that except for soybean
and rapeseed-mustard, India has considerable flexibility to reduce imports by
making them costly by raising tariffs. In fact, raising the tariff up to the bound
rate would raise the cost of most of the imported edible oils above their domestic
prices and would reduce their imports to almost zero. The country has chosen
to levy lesser than the bound tariff in the larger interests of the consumers
and to keep a sort of balance between consumer’ and producer’ interests
(Chand et al., 2004).
Price-related policy in the oilseed sector
The price policy for agricultural commodities seeks to ensure remunerative
prices to the growers for their produce with a view to encouraging higher
investment and production and safeguarding the interests of consumers by
making sure that adequate supplies are available. With this aim, the
Government of India announces minimum support prices (MSPs) for major
agricultural commodities each season based on the advice of the Commission
for Agricultural Costs and Prices (CACP). All the three major oilseeds, namely
groundnut, rapeseed-mustard and soybean are covered under the system of
minimum support prices.
Table 9. Bound and applied tariff rates in India on import of edible oils
Oil category Uruguay Round bound duty Applied basic duty
Base Final 2004 2001 2005 2010
Crude oil
Soybean 45 34 45 45 Free
Palm 300 228 100 80 Free
Groundnut 300 228 100 85 Free
Sunflower 300 228 100 75 Free
Coconut 300 228 100 85/100 Free
Rapeseed- mustard 75 57 75 75 Free
Castor 100 76 100 85/100 Free
Refined oil
Soybean 45 34 45 45 7.5
RBD palmolein 300 228 100 90 7.5
Palm 300 228 100 90 7.5
Groundnut 300 228 100 85 7.5
Sunflower 300 228 100 85 7.5
Coconut 300 228 100 85 7.5
Rapeseed-mustard 75 57 75 75 7.5
Castor 100 76 100 100 7.5
86
In order to examine the adequacy of MSPs for these crops, we compared
farm harvest price and cost of production (cost C2 revised) with MSPs for major
oilseeds-growing states over time. In Gujarat, the cost of production of
groundnut has generally been higher than the MSP (Table 10). During 2000-01
to 2007-08, the MSP was 1 to 39 per cent less than the cost of production,
except in 2001-02, 2003-04 and 2005-06 when it was 47 per cent, 34 per cent
and 18 per cent more than the cost of production, respectively. Hence the MSP
does not adequately cover the cost of production for groundnut in Gujarat and
an upward revision of the MSP is required.
Rajasthan is a major rapeseed-mustard producing state of the country. In
all the years beginning from 1992-93, the cost of production of rapeseed-mustard
in the state has been less than the MSP, except in the year 1997-98 (Table 10). In
recent years, the MSP has been substantially higher than the cost of production.
During 2000-01 and 2007-08, the MSP was 15 to 85 per cent higher than the
cost of production. Hence, the MSP for rapeseed-mustard can be considered to
be adequate as the farmers can get a substantial return on their investments
even if they sell their produce at the MSP.
Table 10. Minimum support prices (MSP), farm harvest prices (FHP) and cost of
production (COP) of selected oilseeds crops in major oilseeds-producing states
(Rs/quintal)
Year Groundnut Rapeseed-mustard Soybean
Gujarat Rajasthan Madhya Pradesh
MSP FHP COP MSP FHP COP MSP FHP COP
1992-93 750 999 832 760 861 575 525 - 571
1993-94 800 1112 1090 810 1012 585 580 - 591
1994-95 860 1189 789 830 1134 596 650 - 664
1995-96 900 1326 1209 860 1068 645 680 - 693
1996-97 920 1266 998 890 1132 785 700 - 910
1997-98 980 1369 1027 940 1328 1084 750 969 817
1998-99 1040 1360 1097 1000 1250 828 795 843 849
1999-00 1155 1344 1586 1100 1224 905 845 860 838
2000-01 1220 1339 1998 1200 1424 964 865 970 1005
2001-02 1340 1338 914 1300 1285 900 885 961 948
2002-03 1375 1582 1652 1340 1749 1167 895 1311 1693
2003-04 1400 1661 1041 1600 1872 950 930 1472 1029
2004-05 1500 1682 1534 1700 1563 917 1000 1336 1080
2005-06 1520 1550 1286 1715 1499 1010 1010 1199 995
2006-07 1520 1627 1690 1715 1766 1003 1020 1283 1015
2007-08 1550 2055 1567 1800 2451 1333 1050 1958 1160
87
Figure 7. Minimum support prices, farm harvest prices and
cost of production of groundnut in Gujarat
Figure 8. Minimum support prices, farm harvest prices and
cost of production of rapeseed-mustard in Rajasthan
The cost of production of soybean in its major growing state of Madhya
Pradesh has been generally higher than the MSP, except occasionally. The
difference, however, has mostly been small. In recent years, except in 2005-06
and 2006-07 when the MSP was slightly higher than the cost of production
(2 % and 5 %, respectively), the MSP has been 7 to 47 per cent lower than the
cost of production.
A comparison of the MSP with the farm harvest prices of groundnut,
rapeseed-mustard and soybean (Table 10 and Figs 7, 8, and 9, respectively)
show that the farm harvest prices have been generally higher than the MSP for
all the three oilseeds. Hence, MSP has little relevance for oilseeds. Moreover,
very little procurement of oilseeds is done, the emphasis of the country’s food
management system being on paddy and wheat for which the MSP has been
adequate over the years.
88
Trade-related policy initiatives in the edible oils sector
Import policy has played a key role in determining the overall level and type of
India’s edible oil imports for decades. The Government of India, with a view to
meet the demand of edible oils and to control the rise in prices, has been allowing
import of edible oils. In pursuance of the policy of liberalization, there have
been progressive changes in the import policy in respect of edible oils during
the past few years. Edible oils, which were on the negative list of imports, were
first decanalized partially in April 1994 with permission to import edible
vegetable palmolein under OGL at 65 per cent duty. This was followed by
enlarging the basket of oils under OGL import in March 1995, when all edible
oils (except coconut oil, palm kernel oil, RBD palm oil and RBD palm steering),
were brought under OGL import at 30 per cent duty, and then further reduction
in duty to 20 per cent plus two per cent surcharge in the regular budget for the
year 1996-97. In order to harmonize the interests of domestic oilseeds growers,
consumers and processors and to regulate large imports of edible oils to the
extent possible, the duty structure on edible oils has been revised frequently
since 1994.
India was pursuing the policy of Import Substitution Industrialization (ISI)
strategy until 1994-95, under which the oilseed/edible oil sector was protected
through quantity restrictions (QRs). All imports of edible oils and oil meals
were totally canalized through STC and the Hindustan Vegetable Oils
Corporation (HVOC), which remained limited to the packaging of oils and
channelling to the state governments for sale through the Public Distribution
System (PDS). The government has allowed imports of oilseeds. However,
virtually, there has been no import of oilseeds largely because of the safety
Figure 9. Minimum support prices, farm harvest prices and
cost of production of soybean in Madhya Pradesh
89
measures imposed by the government, viz. splitting/cracking requirements of
soybean at the port and QRs.
The ISI strategy pursued until 1994-95 delivered significant benefits to the
Indian economy. India was able to transform from a deficit to a virtually self-
sufficient state in edible oils by the early-1990s. India has now become a major
exporter of oilseed meals, a high-protein animal feed for which demand is
increasing in the global markets. In fact, exports of oilseed cakes, the production
of which exceeds domestic demand, were promoted by a variety of export
incentive schemes established by GOI throughout the 1980s and early-1990s in
an effort to generate foreign exchange. The exports of oil meals gained
substantially, both in volume and share because of the increasing demand for
Indian oil meals in world market, which is mainly flooded with oil meals of
genetically modified (GM) oilseeds. Indian oil meals command a premium
because of its non-GM nature. It is worth mentioning that the growth in the
livestock industry will be a major force driving future demand for oil cakes with
high income elasticity of demand for milk and milk products, meat, eggs, fish,
etc. The accelerating growth in income will be a major factor for boosting
domestic demand for livestock products in future, which in turn would promote
a large scale shift towards improved animals or crossbreeds, including improved
management and feeding practices (e.g. feed stalling for dairy).
In the year 2005, import duty was raised on crude palm oil/crude palmolein
from 65 per cent to 80 per cent and on refined palm oil/RBD palmolein from
75 per cent to 90 per cent. In August 2006, the import duty was reduced on
crude palm oil/crude palmolein from 80 per cent to 70 per cent and on refined
palm oil/RBD palmolein from 90 per cent to 80 per cent. In the year 2007, the
custom duty on crude and refined palm oil/palmolein was reduced to 45 per
cent and 52.5 per cent, respectively. The custom duty on crude as well as refined
sunflower oils was reduced to 40 per cent and 50 per cent, respectively. In 2008,
the custom duty on all major crude and refined oils was reduced to ‘Nil’ and
7.5 per cent respectively.
In 2008-09, the Central Government introduced a scheme of distribution
of up to 10 lakh tonnes of imported edible oils. Four Public Sector
Undertakings (PSUs) namely, Projects Equipment Corporation (PEC),
Minerals & Metals Trading Corporation (MMTC), State Trading Corporation
(STC) and National Agricultural Corporation Marketing Federation (NAFED)
were entrusted the job of import, refining, packing and distribution of
subsidized edible oils to the states. The scheme continued from August 2009
to October 2010 for import of 10 lakh tonnes of edible oils with a subsidy of
Rs. 15/- per kg. The scheme is believed to have helped to soften the prices of
edible oils in the domestic market.
90
Conclusions and Recommendations
The major determinants of edible oil availability in the country and the
performance of oilseed economy as a whole have been subjected to a detailed
analysis. The study has highlighted some of the unique features of the oilseed
economy of the nation. The first and foremost among several features unique to
Indian oilseed cultivation is the continued dependence of oilseeds on rain-fed
production system. This particular feature burdens the sector with larger
fluctuations and instabilities in both production and yield. This subsequently is
reflected as an instability in income from cultivation of oilseed crops to the farmer.
The non-availability of quality seeds of improved varieties along with the
weak seed chain for oilseed crops is a regressive feature of the oilseed crop
sector. The seed replacement rate for all oilseed crops apart from rapeseed-
mustard has failed to show a substantial growth. The problem of non-availability
of quality seeds for oilseed crops is compounded by two other factors. One, the
failure in ensuring timely availability of quality seeds and two, the general
tendency to promote only state varieties at the expense of high yielding national
level varieties. The participation of seed agencies, especially from the private
sector, is also low.
The analysis of input use-pattern in the cultivation of oilseed crops across the
country has revealed the problem of sub-optimal and imbalanced use of major
nutrients. Studies have shown that the use of secondary and micronutrients is
negligible in oilseed crops. This attains significance in the light of several studies
highlighting the role of secondary and micronutrients in enhancing yield of
oilseeds crops. The survey of biotic production constraints for oilseed crops shows
the emergence of new biotic threats to the major oilseed crops. These emerging
threats have the potential to disrupt the production patterns and regional crop
preferences in a significant manner. An indicative list is given in Table 1.
Table 1. New biotic threats for oilseed crops
Crop Biotic threat
Groundnut Stem and bud necrosis
Mustard Sclerotinia
Soybean Rust
Sunflower Necrosis
Castor Botrytis
Chapter 7
91
A detailed study of the oilseed processing sector which is critical for the
oilseed economy was conducted through surveys in the districts of Junagadh
and Bharatpur. The secondary data on this sector was also analysed as a part of
the study. Both the surveys and the secondary data indicated the persistence of
inefficiencies in the oilseed processing sector, irrespective of the oilseed crop.
The present study has revealed that these inefficiencies have persisted despite a
slew of measures intended to address the same.
The inefficient processing sector is a dead weight on the oilseed economy
as a whole since it is a vital link between the producer and the further actors in
the oilseed value chain. Any attempt to rejuvenate the edible oil economy should
address these serious lacunae first. Unless inefficiencies in the edible oil supply
chain are removed and the primary oilseed cultivators/producers are linked
with the final edible oil consumers through a network of efficient processing
and service channels, the problems of stakeholders at different points of the
supply chain cannot be mitigated.
A critical review of the relative prices and incomes from oilseed crops
compared with those of their major competing crops has revealed some
interesting features. It can be said that the oilseed crops were relatively non-
remunerative compared to their competing crops during the period under review.
A comprehensive policy to promote oilseed crops should also contain
components aimed at making the relative profitability from oilseed cultivation
more attractive. The marketing support provided for oilseed crops is inadequate
and is available only for the selected oilseed crops in a limited area. A systematic
approach for providing adequate market support for oilseed producers will go a
long way in ensuring higher production of oilseed crops. A weak and inefficient
marketing system coupled with unfavourable and unstable import policy has
adversely affected the oilseed producers and processors alike.
The sequential and persistent policy of reduction in import tariffs for both
crude and refined edible oils has led to a surge in imports of relatively cheaper
edible oils like palm oil. The sudden shift from a protected oilseed economy
and the exposure to a highly competitive international edible oil market have
hurt the interests of oilseed cultivators rather than motivating them towards
adoption of more efficient production and competitive strategies. The producers
in the major edible oil exporting countries work under an inherently different
set of economic conditions and social endowments which are alien to our
domestic oilseed cultivators. Hence, the sudden withdrawal of protection and
rampant changes in policies shall do more harm than the intended benefits for
the oilseed economy as a whole. Given this plethora of issues, we should have
a clear understanding and consensus on the strategies to be implemented to
enhance productivity of oilseeds.
92
Strategies to enhance oilseed production
It is a matter beyond debate that the current level of oilseed production and the
prevailing trends in production, productivity and other determinants of edible
oil availability in the country are way below our requirements. This scenario
needs to be reversed if the country has to achieve self-sufficiency in edible oil
production and reduce our dependence on imports of edible oils. Some of the
strategies to enhance production of oilseeds grouped under the broad categories
are indicated below.
Scope for area expansion in oilseed crops
There is a growing realization that the scope for enhancing oilseed production
through area expansion has limited scope. The study has bifurcated the sources
of past growth in oilseed production as being contributed by area expansion
(42.6 %) and productivity improvement (57.4 %). Though the past growth in
oilseed production was significantly drawn from the area expansion, the scope
for such a significant contribution in future growth of oilseed production is
less. Area expansion may still be a viable option in oilseed crops which have
shown higher growth rate of productivity due to technological development, as
in the case of rapeseed-mustard. Area expansion is also possible in the case of
oilseed crops where the relative prices with competing crops have moved
favourably and the relative profitability has increased as a result. The trend in
relative price and profitability of sunflower crop shows that area expansion is a
possibility for this crop due to this factor. If the total profitability shows an
increasing trend due to a culmination of higher growth rates and higher prices,
area expansion is a natural outcome. This was witnessed in the case of soybean,
a major edible oil crop.
There exist certain new avenues for area expansion in oilseeds. Such avenues
offer a way around the perceived lack of scope for area expansion in oilseed
crops. Crop intensification in underutilized farming situations like rice fallows
can contribute to an increase in area under oilseeds. These approaches will lead
to crop intensification and without sacrificing the yield or area under other
crops, area under oilseed crops can be increased. Under situations of limited
water availability, many oilseed crops can perform satisfactorily. Most of the
area experiencing such conditions of limited water availability are left as fallows.
By bringing such areas under oilseed crops, which can perform better than other
input-intensive crops under such marginal conditions, area and production can
be enhanced for oilseed crops. Varieties suitable for such marginal conditions
have been developed under the NARS which should be utilized for such
conditions.
93
By incorporating oilseed crops as a component in contingency planning,
additional area can be brought under oilseed crops. These being short duration
and minimal input-requiring crops are ideally suited for contingency plans.
Oilseed crops like toria, sunflower and sesame have repeatedly proven their
worth as a component in contingency planning. Oilseed crops by virtue of their
characteristics are also suited as a catch crop. By exploring this option of use of
oilseed crop as a catch crop, further area expansion is possible.
Farmers should be persuaded to explore the option of replacing
less-remunerative crops with oilseed crops which may be more profitable. The
cultivators may be unaware of the profit potential of alternative oilseed crops
or may be bound by tradition in continuing the cultivation of the less-
remunerative crops. Generating awareness among the farmers about the oilseed
crop options available to them is required to bring about the desired change in
cropping pattern.
The study has shown that though the scope for area expansion is limited in
oilseed crops, it can be explored as a source of growth in specific cases meeting
certain criteria as elaborated above. Such oilseed crops and scenarios need to
be identified and policy support for area expansion should be targeted towards
these crops in a focused manner. The innovative approaches to area expansion
need to be exercised and taken advantage of. Only through such efforts, the
area under oilseeds can be enhanced.
Scope for enhancing oilseeds productivity
Major avenues for future increase in oilseeds production are expected to come
from enhancement in productivity of oilseed crops. To realize this expectation,
a proper mix of technologies and strategies needs to be put in place. Given the
difficulties involved in increasing the area under oilseed crops, a combination
of land-saving technologies involving high-yielding varieties and hybrids, and
efficient crop management need to be adopted. This particular study has
highlighted the extent of losses caused due to incidence of pest and diseases.
The unrealized yield due to lack of adoption of proper nutrient management
has also been brought out. In this backdrop, adoption of integrated pest
management and balanced and integrated crop nutrition should be stressed for
oilseed crops. The advantage of mechanization in oilseed crops is a least
understood and often neglected area. To realize the benefits of mechanization
in oilseeds will help in enhancing the productivity of oilseed crops. All these
technological components do involve expansion of area under cultivation and
are classified as land-saving technologies. Such technologies need to be promoted
for enhancing productivity of edible oilseed crops.
94
An exhaustive review of innovative technologies available for oilseed crops
has shown that many technological avenues lie underutilized in pursuit of
enhancement of oilseed productivity. Some of the emerging fields of crop
management research offers considerable potential in improving the yield of
oilseed crops. Latest scientific and technological innovations in agro-techniques
and enhancement in input-use efficiency need to be put to test and promising
technologies among these need to be promoted to provide a strong technological
push for oilseed productivity enhancement. Promotion of Resource conservation
technologies (RCT), Precision farming, Contingency crop planning (CCP), Crop
modelling and simulation offer significant potential for the productivity
enhancement.
Emerging agro-techniques like agronomic screening of nutrient efficient
genotypes, micro-nutrient management and crop physiological approaches like
modifying source sink relationship, enhancing Crop Harvest Index and
modifying assimilate partitioning mechanism also offer scope for productivity
enhancement. Apart from these innovative approaches, other non-conventional
interventions to enhance yield need to be utilized like use of PGPRS and effective
micro organisms. Productivity enhancement through Crop Ecological Zoning
and Varietal Technology can also be deployed to enhance the oilseed productivity
and production. Varietal research needs to focus on developing varieties and
addressing identified constraints in varietal technology in existence.
The productivity enhancement possible in oilseed crops is probably highest
among any group of crops due to a plethora of factors. This fact, while a reason
for concern due to the existing low level of productivity, also offers immense
potential for advancements in crop improvement through application of research
findings.
Roadmap for the oilseed sector
The oilseed sector, as evidenced from the wealth of data on its performance
and features, is clearly in an unenviable position. A paradigm shift in terms of
direction and vision is much needed for this sector. The issues and concerns
raised about the oilseed economy in this study have been carefully examined to
identify the underlying causes and to formulate appropriate responses. The broad
outlines of the strategies for revamping the current oilseed sector revolve around
the following three major areas:
● Strategies for expansion of area under oilseed crops
● Strategies for enhancing oilseed productivity
● Ensuring policy backup for implementation of strategies
95
Area expansion in oilseed crops offers only a limited scope for substantial
production gains. Significant area gains can be realized under oilseed crops by
following the identified strategies for area expansion. This can be set as a target
and efforts may be directed towards realization of this target. The details of the
strategies to be adopted to realize expansion of area under oilseed crops have
been discussed at length in this report. The quintessence of the strategies
discussed is highlighted below.
● Oilseed cultivation in rice-fallows and non-traditional areas
● Incorporating oilseed crops in intercropping sequence
● Inclusion of oilseed crops as a component in crop diversification plans
The second component of the roadmap for oilseed sector is the enhancement
of oilseed crop productivity and promotion of new/minor crops like safflower,
sunflower, etc. The strategy to achieve this objective touches upon diverse sources
of productivity enhancement like use of improved agro-techniques and
improvements in input–use efficiency. Effective technology dissemination to
the cultivators is crucial to the success of the strategy. The key components of
the productivity enhancement approach include
● Ensure timely availability of quality seed of improved varieties
● Provide incentives to promote balanced crop nutrition
● Promote efficiency in water use, e.g., protective irrigation
● Effective crop management techniques need to popularized
● Adoption of integrated pest and nutrient management
● Selective farm mechanization in oilseed cultivation, especially in groundnut
digging
● Use of resource conservation technologies, precision farming and crop
contingency planning
The productivity gains expected as an outcome of successful adoption of
these productivity-enhancing strategies is expected to raise the national average
productivity of oilseed crops to 1.5 t/ha by 2015 and further to 1.8t/ha by
2020.
The effective implementation and operation of these strategies to enhance
area and productivity depend heavily on the policy environment under which
they thrive. Hence, a favourable policy environment, conducive to the efficient
operation of identified strategies becomes a key component in the roadmap for
oilseed sector of the country. Three important functional areas of policy backing
have been identified for oilseed sector. They are listed below.
96
● Enhance capacity utilization and efficiency of oilseed processing sector
● Effective market interventions for oilseeds and edible oils and
● Favourable trade policy
To address the latent inefficiencies in the traditional oilseed processing sector,
radical changes have to be made in the policy front to enable the units in this
sector to increase their efficiency and capacity utilization. Decontrol of
traditional oilseeds processing from small scale sector is a policy option which
can speed up this process. Implementation of decontrolling in a phased manner
and handholding the traditional oilseed processing units through different phases
of decontrolling will ensure that the livelihood and economic security of the
direct stakeholders in such units are not adversely affected.
Effective market interventions through the traditional market intervention
tools like price support, price signalling, etc. have to be complemented and
strengthened through selective use of innovative market approaches like futures
markets. Trade policies have a bearing on the net welfare of stakeholders of the
oilseed economy including primary producers, processors, traders and
consumers. An equitable trade policy with clear direction and continuity may
be better suited to provide unambiguous signals for different players in the
market.
The study has brought out the key features of the oilseed economy and it
various trends in the past period. The role played by relative prices, technology,
policy, institutions and the determinants of edible oil availability has been studied
to bring out the contours of the architecture of edible oil seed crop economy in
the country. Based on the incisive analysis of the edible oilseed sector, the project
has come out with a set of key recommendations for revamping the edible oilseed
economy of the country. The role of technological inputs, policy environment
and price systems in providing direction to the oilseed economy cannot be over
emphasized. The current scenario is an outcome of the complex interaction
among these key drivers and the future scenario can be consciously determined
to meet predetermined targets and outcomes through informed choices. This
knowledge will enable policy planners to judge and weigh the available options
and opportunities and thereby exert positive influence on achievement of pre-
determined outcomes with respect to edible oilseed demand and supply in the
country.
97
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