The COOIT president Mansukhbai Patel suggests that the government should adopt a variable duty structure depending on the demand-supply position of edible oils in the country. A committee of representatives from the trade and union ministries of finance, commerce and agriculture should take stock of the situation every month-end and suggest a duty structure for the following month. The immediate goal of such a system is to protect the interest of the farmers on the one hand and consumers on the other, he said.

According to Mr Patel,``after dismantling of quota restrictions, tariff adjustment is the only instrument available to the government to regulate imports of edible oils. We have been pleading with the government that in the face of spreading sickness in the sector, and adverse impact on farmers in the form of low prices of oilseeds, import duty on edible oils should be raised. The latest duty hike in June 2000 was too late and too little and had hardly any impact on imports and prices. A further revision in tariff is overdue if we are to arrest the worsening situation.''

The suggested duty structure by the oil industry and trade is: on crude edible oil 35 per cent, refined soyabean oil 45 per cent and other refined oil 75 per cent.

The import duty should be able to ensure remunerative return to the farmers. A sustained agriculture policy and constant effort for edible oil as during 1987-93, is the only answer to the problem of the edible oil security in the country, he said.

Edible oil self sufficeny which was 97 per cent in 1992-93 with just two lakh tonnes of import has declined to 58 per cent in 1999-2000 with almost 45 lakh tonnes of import. It is likely to decline to 40 per cent next year.

Domestic production, which was 112.7 lakh tonnes in 1986-87, increased to 201 lakh tonnes in 1992-93, as a result of the technology mission. It touched a peak of 252.1 lakh tonnes in 1998-99 and declined to 216.2 lakh tonnes in 1999-2000. The per capita consumption is also growing. It may touch 14 kg year from the current 8-9 kg in a few years.

If this trend of declining production and increasing demand is allowed to continue India may fall into the danger of total dependence on imports, Mr Patel said.

Mr Sandeep Bajoria, President of the Solvent Extractor's Association of India (SEA) suggested that the government should set up an `Oilseeds development fund' for oilseed production and industry. He said the two recent duty hikes of 11 per cent each in December 1999 and June 2000 yielded a revenue of Rs 1000 crore. A further hike in duty would yield similar revenue and the money should be used to set up the fund for the long term development of edible oils in India. COOIT officials recommend large-scale planting of hybrid and genetically modified oilseeds in the country to increase productivity from the current 900 kg to the global levels of 3000-3500 kg a hectare to ensure attractive returns to the farmers.

Mr OP Goenka, director of Foods, Fats & Fertilisers Ltd and advisor to COOIT said steps should be taken to revive the palm oil cultivation initiative in identified states. Over 8 lakh hectares have been identified in states like Andhra Pradesh, Tamil Nadu, Kerala and the Union Territory of Andaman and Nicobar Islands. However, Mr M Rajaiah, President of the AP Rice Bran Solvent Extractors' Association said over 40,000 hectares in AP were brought under oil palm with very good yield. Oil palm in 35,000 hectares have started yielding. But owing to unremunerative prices, farmers are cutting down palms and ensuring remunerative prices to the farmers. Mr Patel said,``the cheaper imports of palm oil have put the entire programme of oil palm cultivation at great risk and the growers are having a hard time pressing government to continue market intervention operations for purchasing fresh fruit bunches. The future of palm oil in the country, with which our edible oil security in India is linked, calls for correctivesteps to be taken to make it remunerative. He said large-scale import of vanaspati from Nepal under the Indo-Nepal Treaty is hitting the domestic manufacturers hard with under utilisation of their capacity.

COOIT is supportive of oilseeds import at duty rates above 20 per cent of the minimum support price in India.