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OILS AND FATS

ITC Geneva of UN declares SEA as best and successful model association
Tuesday, 27 March, 2018, 08 : 00 AM [IST]
Geneva
The International Trade Centre (ITC) Geneva of the United Nations (UN), in its case study on the Solvent Extractors’ Association (SEA) of India, declared it as the best and successful model association. They confirmed that SEA met all the criteria laid down by the UK Trade Association Forum of Best Practices for Guidance for the Model Trade Association. It sets out the key characteristics that a modern best practice trade association should display and the nature of the services it should provide. The SEA case study served as an ideal example and learning point for associations in other countries to emulate.
 
In September 2017, SEA had inked a Memorandum of Understanding (MoU) with ITC Geneva of UN to jointly work on their project Supporting Indian Trade and Investment for Africa (SITA).   Encouraged by SEA’s professional working and support for the project, ITC Geneva under took to conduct a case study on SEA outlining the reasons for the association’s success in all its endeavours for the benefit of other associations. The case study was conducted by John Doddrell, expert, ITC counterpart and former British diplomat, and Aman Goel, ITC official, in January 2018, and the report has just been released.

Executive summary
  • The Solvent Extractors’ Association (SEA) of India has been identified by ITC, Geneva, as a successful sector association, whose story may offer useful learning for other associations in other sectors and in other countries
  • This case study has viewed SEA of India in terms both of what it does and how it does it, benchmarking it against a model of best practice published by the UK’s Trade Association Forum and also drawing on a previous ITC study visit with East African sunflower associations
  • Many members of SEA of India stated that the data gathered and disseminated by the association was highly valuable and justified the membership fees. It was one of the association’s unique selling propositions (USPs)
  • An extensive programme of conferences provides opportunities for the association to disseminate data, to raise revenue, to network and to recruit new members
  • SEA of India’s data is highly valued by government and the media too. This gives access, which helps the association with its advocacy and campaigning work
  • SEA of India works with the farmers, who are the life blood of the industry. The association does surveys to estimate harvest yields and also has a programme of model farms to raise productivity, increase farmers’ incomes and dissuade them from switching to other crops
  • The association organises international delegations, in-coming and out-going, to keep in touch with international markets and identify commercial opportunities. It also undertakes work on standards and quality; and education and training
  • SEA of India’s business model was viewed as a virtuous circle. They gather and  disseminate data which the members are willing to pay for. The data provides access to government and media which helps with advocacy and campaigning. Success in these latter areas, in turn, brings in more members. The other activities of conferences, international delegations, etc. bring in revenues, add prestige and feed into the virtuous circle
  • Beyond the activities, the association must also display those key characteristics that are pre-requisites for establishing and maintaining the confidence of their members and stakeholders
  • SEA of India is effective because it has built a financially sustainable business model
  • SEA of India is legitimate because it has a broad-based membership from all sectors of the industry and all parts of the country
  • SEA of India is progressive with a forward-looking vision and clarity of purpose
  • It is trusted because its executive director is an inspirational leader of the highest integrity; it has independent accreditation to ISO 9000 and its processes for electing and rotating its president ensures that no single interest dominates
  • The association is expert in its field and well connected with its members, with the government, and other stakeholders as well as being well connected internally
  • Against the Trade Association Forum Best Practice Model, SEA of India ticks all the boxes and brings to life that theoretical model of best practice
  • The insights that were gained into the business model, the virtuous circle that SEA of India constructed, its governance and the characteristics that it displayed are all highly relevant to other associations
Media campaign against false propaganda on refined vegetable oils
During the last few months, a sustained campaign has been witnessed on social and electronic media, targeting the fair name of refined oils. These allegations are directed only to malign the goodwill and reputation of the edible oil industry for pecuniary commercial gains by unscrupulous elements. To give credibility to their nefarious designs, the campaigners have even roped in doctors. If this propaganda is not countered effectively, the whole sector would suffer grievous and irreparable harm. It needs to be nipped in the bud.

As a first step, SEA’s food regulatory and legal committee has prepared a scientific document on refined vegetable oils, responding to various allegations with scientific facts and figures.
 
Social media is a very powerful tool and message passes at lightning speed. In view of this, SEA’s food regulatory and legal committee is engaged in preparing a short video message to educate consumers and stakeholders on virtue of refined oils and dispel false propaganda.  
 
Further, electronic media is a very effective medium to disseminate message to masses. SEA plans to prepare a short video film and host it on national and local television channels over the next few days.
 
For this campaign, it proposes to create a fund to counter this propaganda by collecting a nominal contribution from all stakeholders.
 
Raise the duty on soy, sunflower and rapeseed oils in line with palm oil duty structure
SEA welcomed the announcement to substantially increase the import duties on crude palm oil from 30 per cent to 44 per cent, as well as refined palmolein and refined palm oil from 40 per cent to 54 per cent. The association had been representing to the government to increase duties on imported oils as its dependence on edible oils has reached alarming levels of almost 70 per cent of the amount consumed. The association is confident that the hike in duty will boost the acreage and production of oilseeds in the ensuing kharif season.
 
While SEA welcomes the increase in duties, it is surprised that only palm oil has been singled out for increase in duties. The current duty hike is only on palm oil. This will rather encourage the import of other oils like rapeseed oil, sunflower oil and soybean oil, which will be detrimental to the interest of the domestic farmers, as oilseeds of these are also produced in India.

This looks grossly unfair and may defeat the objective of doubling farmers’ incomes by raising the domestic values of all oils. With mustard crop getting harvested Indian farmers will feel cheated if import duties on soya, sunflower and rapeseed oils are not increased in same proportion as palm oils.

Needless to say, it will be difficult to encourage oilseeds farmers to grow more oilseed and to augment their incomes if duties on these oils are not raised. SEA has, therefore, again requested the government to raise the import duty on soy, sunflower and rapeseed oils, so that domestic farmers are not deprived of their rightful remunerative prices for their locally-grown oilseeds.
 
Exempt solvent extraction industry from purview of Raffinate and Slop Order         
The government implemented the Solvent Raffinate and Slop (Acquisition, Sale, Storage and Prevention of Use in Automobiles) Order, 2000 with effect from January 1, 2002 for petroleum products, including food grade hexane consumed by the solvent extraction industry to check the misuse of petroleum products by unscrupulous elements and implemented through the state governments.

Under the Order, the solvent extraction unit needs to obtain a license from the local administration [district supply officer (DSO)], and from time to time, must renew the same to purchase hexane from the petroleum companies. Members have alleged that there are inordinate delays and rampant corruption in renewing licenses.

There are enough checks and monitoring of the usage of hexane in the solvent extraction industry by the Central government departments. Hence, as such, there is no need for state governments to monitor the usage of food-grade hexane by the solvent extraction industry.  There is ample justification to exempt the solvent extraction industry from the purview of the Order.
 
SEA has requested the government to exempt the solvent extraction industry from the purview of this Order, to reduce hardships and formalities and allow them ease of doing business, free of hassles.
 
Forthcoming conferences
As a part of SEA’s continuous efforts to provide the latest information and developments to the members, the association continuously organises or promotes various national and international conferences.

As a part of these endeavours, Globoil International 2018, organised by TEFLA under the patronage of SEA, will be held in Dubai between April 27 and 29, 2018.

This will be followed by the fifth International Conference on Rice Bran Oil, in Hanoi, Vietnam, on May 24 and 25, 2018. This will be organised by the International Association of Rice Bran Oil (IARBO), of which SEA is a founder member of IARBO.

The second Rape-Mustard Conclave, which will take place in Jaipur on June 16 and 17, 2018, will focus on increasing mustard productivity.
 
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