A financial outlay of Rs11,040 crore out has been chalked out of which Rs 8,844 crore will be the share of GoI

The Union Cabinet, chaired by Prime Minister Narendra Modi has given its approval to launch a new mission on oil palm to be known as the National Mission on Edible Oils – Oil Palm (NMEO-OP) as a new Centrally Sponsored Scheme with a special focus on the North East region and the Andaman and Nicobar Islands. 

A financial outlay of Rs 11,040 crore has been made for the scheme, out of which Rs 8,844 crore is the Government of India share and Rs 2,196 crore is State share and this includes the viability gap funding also. 

Under this scheme, it is proposed to cover an additional area of 6.5 lakh hectare (ha.) for oil palm till the year 2025-26 and thereby reaching the target of 10 lakh hectares ultimately. The production of Crude Palm Oil (CPO) is expected to go up to 11.20 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30. 

The scheme will immensely benefit the oil palm farmers, increase capital investment, create employment generation, shall reduce the import dependence and also increase the income of the farmers.

There are two major focus areas of the scheme. The oil palm farmers produce Fresh Fruit Bunches (FFBs) from which oil is extracted by the industry. Presently the prices of these FFBs are linked to the international CPO prices fluctuations. For the first time, the Government of India will give price assurance to the oil palm farmers for the FFBs. This will be known as the Viability Price (VP). This will protect the farmers from the fluctuations of the international CPO prices and protect them from

 the volatility. 

The VP shall be the annual average CPO price of the last five years adjusted with the wholesale price index to be multiplied by 14.3 per cent. The assurance will inculcate confidence in the Indian oil palm farmers to go for the increased area and thereby more production of palm oil. A Formula price (FP) will also be fixed which will be 14.3 per cent of CPO and will be fixed monthly. The viability gap funding will be the VP-FP and if the need arises, it would be paid directly to the farmer’s accounts in the form of DBT. 

The second major focus of the scheme is to substantially increase the assistance of inputs/interventions. A substantial increase has been made for planting material for oil palm and this has increased from Rs 12,000 per ha to Rs 29000 per ha. Further, a substantial increase has been made for maintenance and inter-cropping interventions. Special assistance @ Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.