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OILS AND FATS

Hike in minimum support price for Rabi season ’17-18 between 6 and 10%
Saturday, 28 October, 2017, 08 : 00 AM [IST]
Our Bureau, Mumbai
The minimum support price (MSP) for the Rabi season 2017-18 has been declared by the government of India. The hike in the MSP has been in the range of six to ten per cent in line with the hike of the previous season 2016-17.

The Solvent Extractors’ Association of India (SEA) has welcomed the increase in the MSP of mustard, although the same is lower than its expectations.

While this is a sensible step to support the oilseed farmers, it is equally important that market participants are able to buy the produce either at the MSP or above it from the farmer.

The challenge is to ensure that the prices in the market yards do not fall below the MSP levels, or else the government would be saddled with huge burdensome stocks.

The policy of high MSP did wonders in case of wheat and rice in India and it is high time the same income protection is given to oilseed farmers by higher MSP.

Further, to ensure that the government does not end up buying all the oilseed produced in our country, the import duties on edible oils should be suitably tweaked to ensure that the price level increases in the domestic market.

Needless to say, edible oil inflation during the last decade has been woefully low, and the need of the hour is to allow it to increase.

The extra revenue generated by increasing duties should be ploughed back into oilseed development programmes.

The groundnut crop in Gujarat this year is likely to be about 32 lakh metric ton (MT), which is an all-time record.

The current prices are ruling below the MSP in markets, and SEA has found out that the government of Gujarat is starting market intervention operations to ensure MSP to farmers for their produce.

Obviously, it may not be possible for the state agencies to buy whatever comes to the market yards.

Hence, it is important to raise the price level of edible oils in the country to support oilseed farmers.

SEA has urged the Central government to increase the duties on imported oils to ensure that farmers are able to get MSP for oilseeds, or else they would continue to lose interest in oilseed cultivation, and India’s import dependence would continue to rise.
 
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