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May 9, 2016

[CA/Econ] Overseas investors continue to shun oil palm industry

No FDI takers for oil palm industry

A recently released report has indicated that the government’s decision to allow 100% foreign direct investment (FDI) in oil palm plantations in November last year has failed to draw even a single investor.

What else needs to be done to attract investors?
·       Oil palm should be declared as a plantation crop. There should be relaxation of land ceiling norms. This paves the way for large scale plantation of oil palm. The current policies of the Centre do not allow companies to either acquire or lease land beyond a specific acreage as defined by land ceiling norms. Thus, there is no scope for the corporate sector for large scale plantation of oil palm.
·       Oil palm developers say that the potential of this crop could be realised effectively if there is a separate oil palm development board, a separate import policy for palm oil and a separate budget for oil palm industry development.



What has the government done to encourage oil palm industry?
v   Oil palm is comparatively a new crop in India and is stated to be the highest vegetable oil yielding crop. In order to encourage its cultivation in the country as a part of its effort to reduce imports and ensure edible oil security, the government came out with a National Mission on Oilseeds and Oil Palm (NMOOP).

About NMOOP:
ü NMOOP envisages bringing an additional 1.25 lakh hectares under oil palm cultivation through area expansion approach in the States including utilisation of wastelands.



Ø The States currently engaged in oil palm cultivation are Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Maharashtra, Mizoram, Karnataka, Kerala, Odisha, Tamil Nadu, Arunachal Pradesh, Assam, Bihar, Manipur, Meghalaya, Nagaland, Sikkim, Tripura and West Bengal.
India’s edible oil imports are rising steeply. In the past 13 years, import of crude and refined oil was reported to have quadrupled and the import bill in this regard is expected to touch $ 15 billion in 2016-17.






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