2024-11-21 10:34:00
The Solvent Extractors’ Association of India (SEA) has said the adoption of genetically modified (GMO) crops could revolutionise oilseed productivity in the country.
In his letter to the members of SEA on Friday, Sanjeev Asthana, President of SEA, said India’s oilseed production is projected to grow from 35 million tonnes (mt) to 45-50 mt by 2029-30, with vegetable oil availability increasing by 5-6 mt to 15-17 mt. However, consumption is expected to reach 28-30 mt at a 3 per cent growth rate, potentially touching 32 mt with 4 per cent growth.
The rising demand for convenience foods, including ready-to-eat and snack foods, will further increase edible oil consumption. To address this gap, the Government has launched initiatives such as the National Oilseeds Mission and the Palm Oil Mission.
“Adoption of GMO crops such as GMO rapeseed could revolutionise oilseed productivity much like GMO cotton did in 2002. GMO adoption is vital for India’s food security and should be prioritised,” he said.
Support for rapemeal
Seeking support for export of rapeseed meal, he said India exported 22 lakh tonnes of rapeseed meal in 2023-24, helping farmers earn better prices. However, exports fell by 25 per cent in April-October 2024 due to uncompetitive pricing. The association has urged the Government to grant a 15 per cent export incentive through higher RoDTEP (Remission of Duties and Taxes on Exported Products) rates, freight subsidies, and interest subvention. This support will enhance export competitiveness and ensure that domestic rapeseed prices stay above the minimum support price (MSP), thereby increasing edible oil availability.
Stating that the Government has relaxed moisture limits for soyabean procurement from 12 per cent to 15 per cent to support farmers, he said soyabean prices in the market are still below the MSP of ₹4,890 a quintal, trading around ₹4,200. Full-scale procurement at MSP in key states is crucial, he said.
Additionally, reduced domestic demand for soyabean meal due to DDGS (dried distillers grain solids) substitution in feed and low international prices have further pressured the market.
Mentioning that milk prices have not decreased despite the ban imposed on the export of de-oiled ricebran in July 2023, Asthana said the ban has caused prices to plummet from ₹17,000 to ₹10,000 a tonne, harming the vegetable oil industry.
Impact of derivatives’ ban
On the ban on futures trading in certain commodities, he said the suspension of futures trading in commodities such as mustard seed, soyabean and crude palm oil since 2021 has affected price discovery mechanisms. The association has urged SEBI and the Finance Ministry to lift the suspension emphasizing that futures trading aids farmers, industry, and trade without escalating prices.
He said the domestic oleochemical industry faces severe challenges due to large-scale imports of soap noodles at nil duty from South-East Asia. SEA has recommended either placing these imports under the restricted Items list or imposing an additional 25 per cent duty to safeguard domestic oleochemical manufacturers, he added.
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How can government policies, such as export incentives and support prices, effectively assist farmers in overcoming the current challenges in the oilseed market?
**Interview with Sanjeev Asthana, President of the Solvent Extractors’ Association of India (SEA)**
**Interviewer:** Thank you for joining us today, Mr. Asthana. The SEA recently expressed strong support for the adoption of genetically modified crops to improve oilseed productivity. Can you elaborate on why you believe this is necessary for India’s agriculture?
**Sanjeev Asthana:** Thank you for having me. The adoption of genetically modified crops, especially GMO rapeseed, could signal a significant turning point for India’s oilseed production. We are projecting oilseed production to increase to 45-50 million tonnes by 2029-30, but with the rising demand—largely driven by convenience foods—it’s crucial that we leverage technology like GMOs to meet our needs effectively. Much like GMO cotton transformed cotton agriculture in 2002, we believe that GMOs can boost our oilseed yields significantly.
**Interviewer:** You mentioned a projected increase in vegetable oil availability. What are the anticipated challenges in meeting this growing demand?
**Sanjeev Asthana:** The main challenge lies in the gap between production and consumption. We expect consumption to grow at a rate of 3-4% annually, potentially reaching up to 32 million tonnes by the end of the decade. With such a growth rate, we must enhance our production capabilities, which is where the adoption of GMO technologies becomes vital. If we don’t adapt, we face the risk of being unable to meet our domestic demands, which could lead to increased reliance on imports.
**Interviewer:** In your letter to SEA members, you discussed the trading conditions for rapeseed meal and soybeans. What solutions are you proposing to help farmers during these tough times?
**Sanjeev Asthana:** We are advocating for government support in the form of export incentives, specifically through the Remission of Duties and Taxes on Exported Products (RoDTEP). A 15% incentive could significantly improve our competitiveness in the export market. Additionally, the government’s recent relaxation of moisture limits for soybean procurement is a step in the right direction, but we still need full-scale procurement at the Minimum Support Price (MSP) to ensure that farmers are adequately compensated.
**Interviewer:** There have also been concerns regarding the suspension of futures trading in key commodities. Can you discuss the impact this has had on price discovery?
**Sanjeev Asthana:** Absolutely. The ban on futures trading in mustard seed, soybean, and palm oil, imposed since 2021, has disrupted the crucial price discovery mechanism in these markets. We believe the lifting of this suspension is essential for transparency and stability in pricing, which ultimately benefits farmers and the industry. Futures trading enables better planning and risk management for all stakeholders involved.
**Interviewer:** Lastly, with the challenges facing the domestic oleochemical industry due to imports, what measures is the SEA recommending?
**Sanjeev Asthana:** The influx of soap noodle imports at zero duty poses a significant threat to our domestic manufacturers. We are urging the government to impose an additional duty or to list these imports among restricted items to protect our local industries. The survival of our domestic oleochemical sector is vital not only for our economy but also for maintaining competitive prices for consumers.
**Interviewer:** Thank you, Mr. Asthana, for your insights. It’s clear that the adoption of GMOs and supportive government policies could play crucial roles in enhancing India’s oilseed productivity and ensuring food security.
**Sanjeev Asthana:** Thank you for discussing these important issues with me. It is imperative that we work together to secure a sustainable agricultural future for our country.