Malaysia Offers Palm Oil Partnership to India

GS paper III

News Excerpt:

India and Malaysia have decided to strengthen their cooperation in the edible oil sector, focusing on the cultivation of oil palm and the production and trade of palm oil.

More detail about news:

  • This decision was announced following a meeting between the Union Minister for Agriculture and the Malaysian Minister.
  • During their discussions, the ministers also addressed India's recent ban on the export of rice and sugar, implemented to ensure sufficient domestic supply. 
  • The Malaysian Minister offered his expertise in research and development, seed supply and partnership management for India's National Edible Oil Mission.
  • Malaysia supplies three million metric tonnes of palm oil out of the 9.7 million tonnes imported by India each year

Challenges associated with Oil Palm plantation in india:

  • Long gestation period (4-5 years) makes the plantation difficult for small farmers.
  • The high water footprint for growing palm is 243 increases stress on water resources in certain regions.
  • Oil palm expansion is a major driver of deforestation and degradation of natural habitats in parts of tropical Asia and Central and South America, behind cattle ranching and local and subsistence agriculture.
  • It may show a similar impact on the local biodiversity of India
  • In southern states like Andhra Pradesh and Telangana, water scarcity and small landholdings hinder production.
  • Farmers have abandoned palm oil due to high costs and low returns.
  • In the northeast, issues include hilly terrain, small landholdings, and poor infrastructure .
  • Mizoram's farmers struggle with transporting produce to distant factories and low prices.

Environmental impact of Oil Palm Plantations:

  • Biodiversity Loss:
    • Converting tropical forests to oil palm plantations devastates many plant and animal species.
    • Leads to human-wildlife conflict as large animals are confined to fragmented habitats.
    • Destroys habitats that often contain rare and endangered species or serve as wildlife corridors.
  • Air Pollution:
    • Burning forests for clearing vegetation releases smoke and carbon dioxide, contributing to climate change.
    • Fires in peat areas are hard to extinguish, causing smoke and haze that affect health throughout Southeast Asia.
  • Soil and Water Pollution:
    • Palm oil mills produce 2.5 metric tons of effluent per metric ton of oil, polluting freshwater and affecting biodiversity and people downstream.
    • Indiscriminate use of pesticides and fertilizers can contaminate surface and groundwater.
  • Soil Erosion:
    • Forest clearing and improper planting arrangements cause soil erosion.
    • Planting on steep slopes increases erosion, leading to flooding and silt deposits in rivers and ports.
  • Climate Change:
    • Draining and converting tropical peat forests, which are major carbon sinks, is particularly harmful.
    • Forest fires for clearing land release carbon dioxide, contributing significantly to climate change.
    • Indonesia, with its high deforestation rate, is the third-largest emitter of greenhouse gasses globally.

Palm Oil Import in India

  • India is the world's biggest buyer of palm oil.
  • In 2020-21, India imported 8.4 million metric tonnes of palm oil, which is about 18% of all the palm oil bought globally.
  • As the third largest user of edible oil in the world, India relies a lot on imports.
  • In 2020-21, 62% of the oil India used was imported, and most of this was palm oil.
  • Indonesia and Malaysia are the main countries that supply palm oil to India, with Indonesia providing 61% and Malaysia 32% of the imports in 2020.

National Mission on Edible Oils – Oil Palm (NMEO-OP)

  • NMEO-OP is a new Centrally Sponsored Scheme aimed at boosting the cultivation and productivity of oilseeds and oil palm, with a particular emphasis on the North East region and the Andaman and Nicobar Islands.
  • The scheme has a financial outlay of Rs. 11,040 crore, with Rs. 8,844 crore contributed by the Government of India and Rs. 2,196 crore by the states, which includes funding to cover viability gaps.
  • This initiative replaced the National Food Security Mission-Oil Palm programme
  • It aims to bring an additional 6.5 lakh hectares under oil palm cultivation by 2025-26, with the ultimate goal of covering 10 lakh hectares.
  • By 2025-26, the production of Crude Palm Oil (CPO) is expected to reach 11.20 lakh tonnes, and by 2029-30, it is projected to rise to 28 lakh tonnes.

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