India Makes Aatmanirbhar Plans For Palm Oil, But at Huge Cost to the Environment

India spends several thousand crores to cater to the huge edible oil demand in the country.

The Cabinet recently approved Rs 11,040 crore for a centrally sponsored scheme that will focus on increasing productivity of oil seeds and oil palm in the Northeastern region and the Andaman and Nicobar Islands.

(Photo courtesy: Wikimedia Commons)

(Our climate crisis special features are high on costs and resources. Please consider supporting us, so we can continue to tell stories that are important to you. Click here)

India, the world's largest edible oil importer, is now looking to be aatmanirbhar and scale up its palm oil production. That will help cut down its dependency on top palm-oil-producing countries like Indonesia and Malaysia.

Last week, the Cabinet approved Rs 11,040 crore for a centrally sponsored scheme that will focus on increasing productivity of oil seeds and oil palm in the Northeastern region and the Andaman and Nicobar Islands.

The country's annual demand for edible oil has been roughly 25 million tonnes, out of which palm oil accounted for almost 56 percent of the total oil imports, followed by soya oil and sunflower oil.

Since the onset of the pandemic, prices of all edible oils have soared due to labour shortages in Malaysia and Indonesia as well as environmental issues that have impacted oil plantations.

But the Centre's palm oil plans have raised environmental concerns. What are these concerns? Can palm oil production be sustainable? And why does palm oil matter so much? Read on.

What Does India's Palm Oil Mission Propose?

Currently, an area of 3.70 lakh hectares is reportedly under oil palm cultivation in the country.

But the palm oil mission proposes to cover an additional area of 6.5 lakh hectares by 2025-26 to increase crude palm oil (CPO) production to 11.2 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.

While this can be promising for consumers, the Centre is also looking to encourage oil palm farmers by assisting them with planting materials, and giving them price assurances in the form of viability pap funding.

Under this pricing mechanism, the government said that 'for the first time' it will give a price assurance to the oil palm farmers for their fresh fruit bunches (FFBs) which is what palm oil is extracted from.

This would protect farmers from the fluctuating international CPO prices which determines FBB prices.

What Are The Environmental Concerns With India's Palm Oil Mission?

Palm oil plantations are best suited in tropical areas which are rich in biodiversity. Hence, one of the biggest concerns with boosting palm oil yield is that with unsustainable practices, these oil plantations often tend to replace tropical forest covers.

That is also the concern with planning palm oil production in the Northeastern region of India which is easily one of the biodiversity-rich regions of the country.

This will not only threaten the local species of flora and fauna but also impact the local communities who depend on forests for their lives and livelihoods.

"Moreover, it is a huge water guzzler", says Mayank Aggarwal, Contributing Editor at Mongabay India, a nonprofit environment and conservation news platform.

Since these plantations also need a lot of water, wherever there are concerns of dipping ground water levels, growing such a water-intensive crop will only add to the water scarcity.

"India as a country has millions of small farmers which means small land holdings. For palm oil crops to fructify, you need huge areas of landholdings. Hence, a lot of companies are likely to have contracts with farmers for palm oil plantations and that is one area of concern given the fact that farmers often feel that corporates don't respect their rights. Also, the crop has a long gestation period which lead to farmers incurring losses."

Mayank Aggarwal, Contributing Editor at Mongabay India

Although the Centre's plan includes encouraging farmers, they may still face problems in the foreseeable future.

"In India, farmers are largely earn their livelihoods on a crop-to-crop basis, so palm oil cultivation can prove to be a big proposition for loss for farmers. In fact, when we spoke to farmers about this, a lot of them who had invested in palm oil told us that they reverted to their usual crop cultivation after facing losses," Aggarwal said.

A report on The Indian Express have also pointed out that the plan was approved despite reservations from the Indian Council of Forestry Research & Education, an institute under the Environment Ministry, which had said that without detailed studies on its ecological impact, production of oil palm "should be avoided" in areas rich in biodiversity.

In its turn, the Centre had justified that in 2018, the Indian Institute of Oil Palm Research had already prepared a report on whether Andaman and Nicobar Islands were feasible for palm oil productions.

But the Centre may have to face some legal hurdles yet, since in 2002, the Supreme Court had ordered the "phasing out" of "commercial plantations on forest land".

The apex court had said,

"There should be no expansion of monoculture or commercial plantations on forest land. The existing plantations of oil palm, rubber and teak are reportedly no longer viable and should be phased out."

Why Palm Oil Matters So Much

Historical evidence suggests that humans have been using palm oil from as far back as 5,000 years – and this crop was introduced to Malaysia and Indonesia from Africa by British colonialists.

Compared to other oilseed crops, palm oil palm cultivation is more profitable because it can produce up to 10 to 46 times more oil per hectare, while the rest have a yield of around 4 tonnes oil per hectares.

Given its affordability, palm oil has become a big source of cooking oil in developing countries like India, but it's also present in pretty much everything else.

In fact, it is practically a ubiquitous ingredient as it is found in a wide range of daily-use products, like soaps, detergents, cosmetics, snacks, ice-cream, candies — you name it.

But the high demand for palm oil is directly connected to large-scale deforestation and ecological destructions.

Oil plantations in Malaysia and Indonesia, which now account for 85 percent of the world's palm oil production, have depleted entire chunks of rainforest covers, which in turn has critically endangered wildlife.

With most of their natural habitats now lost to palm oil expansion, orangutang, Sumatran elephants, Bornean Pygmy elephants, Sumatran rhinos and Sumatran tigers are only some of the species which have been pushed to the brink of extinction.

Although the world of consumers remain largely unbothered by the ecological cost of this all-pervasive ingredient, environmental experts are trying to push the conversation towards looking for sustainable methods of cultivating palm oil.

Can Palm Oil Production Be Sustainable?

The world's largest association for ethical palm oil production, Roundtable on Sustainable Palm Oil (RSPO), has come up with a set of environmental and social criteria that companies must comply with in order to produced certified sustainable palm oil.

A few of the criteria include that no primary forests or areas which are rich in biodiversity, or fragile ecosystems, or areas which are fundamental to meeting basic or traditional cultural needs of local communities (high conservation value areas), can be cleared.

However, many experts and activists have found the RSPO's requirements to be grossly insufficient.

It was only in 2018, that the RSPO introduced a ban on cutting down forests or converting peatlands for oil palm plantations.

But with India being the biggest importer of palm oil, many believe that India should be leading the conversation on sustainable palm oil production.