To reduce heavy dependence on import of edible oils, the Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a new mission for palm oil to be known as the “National Mission on Edible Oils – Oil Palm (NMEO-OP)” with a financial outlay of ₹11,040 crore with a special focus on the North-Eastern region and the Andaman and Nicobar Islands.

“Due to the heavy dependence on imports for edible oils, it is important to make efforts for increasing the domestic production of edible oils in which increasing area and productivity of oil palm plays an important part,” the Cabinet Secretariat said in a press statement. India imported palm oils-both crude and refined-worth $5.8 billion in FY21, mostly from Indonesia and Malaysia. The government in a press statement said given the fact that around 98% of crude palm oil (CPO) is being imported, the new scheme proposes to increase the coverage to 10 lakh hectares by FY26 from 3.7 lakh hectares at present. The production of CPO is expected to go up to 11.20 lakh tonnes by FY26 and upto 28 lakh tonnes by FY30. For the new centrally sponsored scheme, the centre will contribute ₹8,844 crore while states have to contribute ₹2,196 crore including the viability gap funding.

“The scheme will immensely benefit the oil palm farmers, increase capital investment, create employment generation, shall reduce the import dependence and also increase the income of the farmers,” the press statement said.

Government will also provide viability gap funding to protect farmers from international price volatility in crude palm oil by paying directly to the farmers’ accounts in the form of direct benefit transfer. “This assurance will inculcate confidence in the Indian oil palm farmers to go for increased area and thereby more production of palm oil,” the press statement said. The scheme will end on 1 November, 2037.

To give impetus to the North-East and Andaman, the government will bear a cost of 2% of the CPO price to ensure that the farmers are paid at par with the rest of India.  “The states who adopt the mechanism proposed by the Government of India would benefit from the viability gap payment proposed in the scheme and for this they will enter into MoUs with the central government,” the statement said.

The Cabinet Committee of Economic Affairs also approved revival package worth ₹77.45 crore for North-Eastern Regional Agricultural Marketing Corporation Ltd to ensure remunerative price to the farmers of their products will be ensured. The revival package will help the central public sector enterprise to implement various innovative plans such as providing better farming facilities, training to farmers in clusters, organic seeds and fertilizer, post harvesting facilities in order to promote the products of NE farmers in the world market through participation in events, registration of geographical indication (GI) products.