Indian farmer Shingara Singh has grown grain for 35 years and is one of thousands of protesters against agricultural reforms who have the power to help slash a huge annual bill of US$10 billion for imports of vegetable oils.
Yet Singh, 55, said that he would only switch to growing oilseeds, such as rapeseed and sunflower, on his 6 hectare plot in the northern state of Punjab if the government promises guaranteed rates for his produce.
“Sometimes we grow sunflower, but we don’t get to sell it at the MSP,” said Singh, referring to the Minimum Support Price (MSP) the government pays for his rice and wheat.
Photo: AP
“In fact, we often have to sell sunflower at deep discounts,” added Singh, a participant in the farmers’ daily sit-ins on the edge of the capital, New Delhi.
Such a switch by farmers in the breadbasket states of Punjab and Haryana could cut shipments of edible oils that have tripled over the past two decades to rack up India’s third biggest import bill, after crude oil and gold.
That would also melt bulging inventories of rice and wheat worth billions of dollars that lie unsold in government warehouses, after years of bountiful harvests.
However, industry experts say that grain growers are unlikely to make the switch in large numbers unless the government offers financial assistance.
“Farmers will shift to oilseeds if the government agrees to give incentives of a few thousand rupees per acre for diversification, which is necessary,” said veteran trader Govindbhai Patel, head of G.G. Patel & Nikhil Research Co.
Such a move looks unlikely during the standoff over three new farm laws adopted by Indian Prime Minister Narendra Modi’s government in September, which protesting cultivators call a ruse to abandon MSPs.
These prices are set for more than 20 crops each year, but state buying agency the Food Corporation of India applies them only to purchases of rice and wheat, blaming a lack of funds and storage space.
Only the prospect of financial support is likely to encourage farmers to switch from grain crops, with their government-set prices, to the less predictable gains of oilseeds.
“We’ve requested the government to give that kind of support to farmers,” said B. V. Mehta, executive director of the Solvent Extractors Association of India industry body.
The government, which earns 350 billion rupees (US$4.79 billion) from levies on edible oil imports, can easily set aside 40 billion rupees a year for crop diversification, through more taxes on such imports, Mehta added.
Higher output of oilseeds and fewer imports of oils would boost farmers’ incomes, create jobs in the domestic crushing industry and help save precious foreign exchange, he said.
The growers’ transition away from grain is a key step in a government plan to boost oilseed production, said a senior government official, who sought anonymity in line with policy.
Once the government resolves the farmers’ month-old agitation, it can chalk out financial incentives to drive crop diversification, industry officials say.
Negotiators for both sides are to meet on Monday to try and break the deadlock.
Government purchases, initially meant to promote self-sufficiency in domestic staples, have spurred farmers, especially those with access to better irrigation, to favor grain over the years, rather than oilseeds and pulses.
That has pushed India to the rank of the world’s second-biggest producer of rice and wheat, but caused a glut.
At the same time, lower oilseed output has made it the world’s biggest importer of oils, to meet nearly 70 percent of consumption.
Such imports have surged to 15 million tonnes from 4 million two decades ago, and could touch 20 million by 2030, boosted by a growing populace with higher incomes to satisfy a penchant for calorie-laden curry and deep-fried food.
India buys palm oil from Indonesia and Malaysia and soy oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Oilseeds are now mainly grown in rain-fed areas with low crop yields, but Punjab, with efficient irrigation, can expect higher yields, experts say.
Farmers in the neighboring Haryana state can produce 6 million tonnes of rapeseed if they divert half the area now under wheat, bringing a domestic supply boost of 2.5 million tonnes, Mehta said.
Farm economists say that India should create a transition fund.
“Both central and state governments should work out a financial package that will get this crop diversification rolling,” former Indian Commission for Agricultural Costs and Prices chairman Ashok Gulati said.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
RSS