The Economic Coordination Committee of the Cabinet (ECC),
in its meeting last week in Islamabad, approved the Action Plan for
enhancing local oilseed production to meet at least 50 per cent of the
country's required in the next 5 years from present about 30 per cent.
The plan which has been prepared by the Ministry of
Agriculture as a crash programme, envisages vertical increase in
oilseeds production and horizontal increase in area under oilseed
cultivation. As per vertical increase plan existing sunflower and canola
yield per acre would be increased from 600 to 900 kg and inducing
farmers to bring more area under cultivation through various incentives
including ensured marketing at a price guaranteeing a reasonable profit
to the growers.
According to summary submitted to ECC, at present
Pakistan is heavily dependent on imported edible oil. Yearly edible oil
consumption in the country is around 1.9 million tons. About 70 per cent
domestic requirement consumption is met through imports, which cost
Rs.22 billion last year. The remaining 30 per cent comes from local
production. The edible oils requirement is projected to rise to 2.2
million ton per year in the next five year at the present annual growth
rate of 3 per cent.
During the Year 2001-2002, canola and sunflower were
cultivated on 122,000 acres and 281,000 acres, respectively. The seed so
harvested produced 108,000 tons of edible oil, thus saving foreign
exchange of $35 million through import substitution.
Like Pakistan, India was also a edible oil importing
country. In May 1986, Indian government decided to promote oilseeds on
massive scale through establishing high-powered technology mission for
oilseeds with full financial and administration support. Under this
programme they launced two projects one at the cost of Rs.1.7 billion
covering 180 districts in 17 states and the other at a cost of Rs.2.45
billion in 246 districts. By doing so this year they were able to double
their oilseeds production from 11 million tons in 1985-86 to 22 million
tons in 1992-93.
In Pakistan oilseed production can be enahanced in a
short period through providing incentives to farmers in the shape of
ensured marketing, reasonable price for their produce and subsidised
inputs for producing oilseeds. With this approach, Pakistan Oil Seeds
Development Board has prepared an action plan and strategy in the
proposed plan. A medium term approach has been developed to bring a
significant change within five to 8 years. The target of the action plan
would be to meet the 50 per cent of our national requirement of edible
oil through domestic production within the next five years.
Main elements of the action plan for enhancing
indigenous edible oil production would be based on two prolonged
strategy vertical increase in the oil seed productivity, and horizontal
increasing area under oilseed crops, all supported with favourable
Vertical increase would required enhancing per acre
yield of sunflower and canola from existing 500-600 kilograms to 900
kilograms through improving production technology, developing and using
better crop varieties and improving research and extension system for
oilseed crops. This will increase local edible oil production of two
crops by about 45 per cent.
Horizontal increase case would be achieved through
replacing larger wheat (sown after 15 December) by sunflower and
vacating some area from wheat crop for canola cultivation through
increasing wheat production in next five years. Additional area can also
be brought under canola crop by replacing traditional season crop. The
target of horizontal increase in sunflower and canola within next five
years is as.
Cultivation of sunflower on 1 million acres to
produce 0.315 million tons of edible oil.
Cultivation of canola on 0.55 million acres will
produce 0.154 million tons of edible oil. It will be about 1/3 of the
total edible oil production under this plan.
Other elements of the action
The government may provide price incentives to
farmers by ensuring a minimum price of Rs.600-650 per 40 kg for
sunflower and canola through involvement of private sector. However, a
parallel surety be made available for purchase of farmers produce by the
government in case of market slump.
In order to ensure price stabilisation, duty
structure for RBD oil palm and soybean oil needs to be linked with the
fluctuation in international prices of edible oils and oilseeds in such
a way that local producers may get a minimum of Rs.600 per 40 kg for
canola or sunflower produce. For this purpose, the duty structure may be
reviewed after every three months particularly at the time of harvesting
of the oilseeds crop.
Implementation of 65:35 ratio of hard and soft oils
in manufacturer of ghee may be ensured to create demand for locally
produced soft oils maintained quality of ghee for safeguarding the
health of end consumers.
Solvent extraction needs to be supported by livestock
for disposal of their cottonseed meal. This will provide incentives to
the industry for maximising processing of cottonseed for better oil
recovery. A separate project needs to be launched to popularise the use
of meal for cattle feed.
The plan will be viewed as a beginning of a long
awaited, conscious effort to develop a neglected sector. It will
certainly reduce our dependence on imported oil and thereby save million
of dollars of precious foreign exchange. Of its overall strategy mention
may specifically be made of the provision of price incentive to farmers.
The minimum price envisaged for sunflower and canola has been placed at
Rs.600 to Rs.650 per 40 kg, with emphasis on involvement of private
sector. At the same time mention has been made of a parallel surety for
purchases of the farm produce by government to ease the market slump.
Again, to ensure price stability the duty structure for RBD oil palm and
soybean oil has been marked for linkage with fluctuation in
international prices. The idea behind this stipulation is to assure
local producers of a minimum Rs.600 to 650 per 50 kg for canola or
sunflower, through measures like the periodic review of duty structure.
A significant feature of the plan is its focus on assurance of
industrial consumption of oilseed in increasing quantities. For this
purpose it seeks ensuring creation of demand for locally produced soft
oils from strict implementation of 65:35 ratio of hard and soft oils in
manufacture of ghee while also maintaining quality of ghee to safeguard
the health of the consumers. The comprehensive nature of the plan may be
seen reflected also in the concern it has expressed for the solvent
extraction industry, focusing advisability of support from the livestock
sector for disposal of its cottonseed meal, by way of incentive for
maximissing processing of cottonseed for better oil recovery.