Edible Oilseeds Supply and Demand Scenario in India

8/9/2019 Edible Oilseeds Supply and Demand Scenario in India

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Edible Oilseeds Supply and

Demand Scenario in India:

Implications for Policy

Division of Agricultural EconomicsIndian Agricultural Research Institute

New Delhi - 110 012

Girish Kumar Jha

Suresh Pal

V.C. Mathur

Geeta Bisaria

P. AnbukkaniR.R. Burman

S.K. Dubey


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ContentsForeword ............................................................................................................ (v)

Acknowledgements ............................................................................................ (vii)

Executive Summary ........................................................................................... (ix)

1. Introduction ...................................................................................... 1-6

2. Trends in Production and Productivity of Oilseeds in India.............. 7-31

3. Sources of Growth and Input use in Oilseeds ................................. 32-55

4. Structure of Oilseeds Processing Sector of India ............................ 56-63

5. Demand Projections for Edible Oils in India .................................. 64-74

6. Trade Pattern and Tariff Policies in Edible Oils.............................. 75-89

7. Conclusions and Recommendations .............................................. 90-96

8. References ..................................................................................... 97-99


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ForewordOilseeds occupy an important position in the agricultural economy of India.

The country is the largest producer of oilseeds in the world and contributes 7

per cent of the global vegetable oils production with 14 per cent share in the

area. The growth in the domestic production of oilseeds has not been able to

keep pace with the growth in the demand in the country. Low and unstable

yields of most oilseed crops, and uncertainty in returns to investment, which

result from the continuing cultivation of oilseeds in rainfed, high risk production

environments, are the factors leading to this situation of wide demand-supplygap.

The country now imports nearly half of the annual consumption of 168

million tonnes. The Technology Mission on Oilseeds (TMO) launched in 1986

was the first comprehensive intervention aiming self-sufficiency in edible oils

production through the spread of technology and provision of market support.

The Mission met with early success. However, increasing demand for edible

oils necessitated the imports in large quantities leading to a substantial drain on

foreign exchange. Edible oil imports increased from around 15 per cent of total

edible oils consumption in 1995-96 to nearly 53 per cent in 2009-10. The needfor addressing this deficit motivated a systematic study of the oilseeds economy

in order to formulate appropriate strategies to bridge the demand-supply gap.

This volume provides the current and future edible oils needs of the country

based on an in-depth analysis of current production trends and deficiencies,

yield potential, trade in oilseeds and edible oils. The performance of oilseeds

economy over the last three decades highlights the significance of policy and

technology. The report also investigates the role of technological inputs, policy

environment and pricing strategies in providing a direction for development of

the sector. The need for an efficient oilseed processing industry as well asexploitation of non-conventional vegetable oils to bridge the demand-supply

gap is also discussed.

In view of the importance of this sector for ensuring inclusive growth and

the need to achieve self-sufficiency in oilseeds production, key challenges faced

by the edible oils sector and the strategy to address them are also spelled out.

Widening the scope of research and technology diffusion and institutional

options beyond the farm gate like enhancing efficiency of the processing industry

is the way forward in improving the performance of the oilseeds sector.

Improving local capacities for tackling regional differences in oilseeds

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productivity as part of the technological and policy response will go a long way

in strengthening the oilseeds economy and raising overall productivity in the

disadvantaged regions. I am sure some of the suggestions made in the report on

the basis of diligent analysis will find practical use in research and policy

planning.

(H.S. Gupta)

Director

Indian Agricultural Research Institute

New Delhi 110 012

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Acknowledgements

The present project on the Oilseeds and Edible Oils Scenario in India was

sponsored by the Directorate of Vanaspati, Vegetable Oils and Fats, Ministry

of Consumer Affairs, Food and Public Distribution, Government of India. We

are grateful to the Ministry for providing financial support for undertaking this

research study. We are particularly grateful to Dr. Y. C. Nijhawan, Chief Director-

cum-Edible Oil Commissioner, and Mrs. Rajni Agrawal, Deputy Director, for

their constant support during the course of the project.

The project involved an extensive survey of different states where edible

oilseeds are cultivated. Many scientists, farmers, oil millers and traders were

consulted to obtain the required information on different issues; we are thankful

to all of them. We are grateful to the officials and the field staff of various

organizations, particularly of Directorate of Oilseeds Research, Hyderabad,

Directorate of Rapeseed & Mustard Research, Bharatpur and Directorate of

Groundnut Research, Junagadh, for all the help and support provided by them

in the form of data, information and suggestions.

We place on record our thanks to the Director and Joint Director (Research),IARI, New Delhi, for according permission to undertake this work. Thanks are

also due to the Indian Council of Agricultural Research, for supporting the

study.

Special thanks are due to Dr. Alka Singh, Principal Scientist and Mr. Lijo

Thomas, Ph.D. Scholar of the Division of Agricultural Economics, IARI, New

Delhi, for the help provided at different stages of this study.

Mr. Gajab Singh and Mr. Manoj Kumar Sharma, worked in this project as

Research Associates. Their sincere efforts and hard work helped us to completethis project. We thank them sincerely for their assistance.

Authors

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Executive Summary

India is the largest producer of oilseeds in the world and the oilseed sector

occupies an important position in the countrys economy. The country accounts

for 12-15 per cent of global oilseeds area, 6-7 per cent of vegetable oils

production, and 9-10 per cent of the total edible oils consumption. In terms of

acreage, production and economic value, oilseeds are second only to foodgrains.

Besides the nine major oilseeds cultivated in India, a number of minor oilseeds

of horticultural and forest origin, including coconut and oil-palm, are also grown.In addition, substantial quantities of vegetable oils are obtained from rice bran

and cotton seed along with a small quantity from tobacco seed and corn. The

area and production under the nine oilseeds was 26.11 million ha and 24.88

Mt, respectively in 2009-10, whereas the total edible oil production in the country

stood at 6.17 Mt in 2009-10. As per the fourth advance estimates for 2010-11,

the production of total nine oilseed crops is 31.10 Mt, which is a quantum

jump over previous years production. Oilseeds area and output are concentrated

in the central and southern parts of India, mainly in the states of Madhya

Pradesh, Gujarat, Rajasthan, Andhra Pradesh and Karnataka. Among different

oilseeds, groundnut, rapeseed-mustard and soybean account for about 80 per

cent of area and 87 per cent of production of oilseeds in the country (2010-11).

The domestic demand for vegetable oils and fats has been rising rapidly, at

the rate of 6 per cent per annum, but our domestic output has been increasing

at just about 2 per cent per annum. In India, the average yields of most oilseeds

are extremely low as compared to those other countries of the world. The

cultivation of oilseeds in India is in high risk regions where there are uncertain

returns on the investments. The study was formulated with the objectives of

ascertaining the present and future edible oil needs of the country, currentproduction scenario and associated constraints, yield position and trade in edible

oils and its impact on the oilseed economy.

The area, production and productivity of oilseeds grew at a compound

annual growth rate of 1.58 per cent, 3.05 per cent and 1.45 per cent, respectively,

during the period 1951-2009. Among the oilseed crops, the growth rate in area

and production was the highest for soybean (10.73 % and 12.73 %, respectively).

Castor, sunflower and rapeseed-mustard also exhibited a healthy growth rate in

production. There was a relative decline in the annual growth rate of area,

production and productivity of oilseeds during 1991-2000 as compared to 1981-


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1990. The area expansion in oilseeds during the past two decades was mainly

possible because of the replacement of non-remunerative crops like millets and

minor food crops and partly through increase in cropping intensity. Instability

in area, production and productivity of oilseeds has been estimated using

coefficients of variation. Maximum variability has been observed in theproduction (54.81 %), followed by area (27.45 %) and productivity (28.65 %) of

oilseeds during the period 1950-2009. The production of the nine oilseeds

jumped from 9 Mt in 1980-81 to more than 28 Mt in 2008-09 with an annual

growth rate of 3.53 per cent per annum. During this period, area and productivity

of these nine oilseeds registered an annual growth rate of 1.46 per cent and

2.05 per cent per annum, respectively.

Among the major oilseed-producing states, Rajasthan, Madhya Pradesh

and Maharashtra have exhibited the healthy growth rates in the area, production

and productivity during 1980-2009. Only a few states like Haryana, MadhyaPradesh, Maharashtra, Rajasthan and West Bengal have increased the oilseeds

production through both area as well as productivity improvement. The area

under soybean has rapidly increased from 0.03 M ha in 1970 to 2.6 M ha in

1990 and to 9.39 M ha in 2009-10 with a production of 10.31 Mt and productivity

of 1098 kg/ha. The rate of growth in the production was estimated to be around

12 per cent at country level and increase in the production was mainly due to

significant expansion in area (16.71 %) during 1981-1990. Major expansion

took place in Madhya Pradesh accounting for 55.80 per cent of area under

soybean cultivation.

The area, production and productivity of rapeseed-mustard grew with a

compound annual growth rate of 1.88 per cent, 4.18 per cent and 2.26 per cent,

respectively during 1980-2009. The production, area and yield

of rapeseed-mustard seed experienced a significant growth from 1984-85 to

1996-97, primarily due to the increase in irrigated land and the availability of

high-yielding seeds in the country. This trend was partly reversed due to

intermittent drought conditions in some of the major oilseed producing states.

The output growth fell from 15.11 per cent during 1981-90 to 10.79 per cent in

2001-09. The country registered a moderate growth in the production (0.54 %)as yield growth (1.21 %) was neutralized by the negative growth in area of

groundnut during 1981-09. The groundnut crop recorded a significant decline

in area and production during 1991-2000. This was mainly due to the gradual

replacement of the crop by cotton, soybean and sunflower. Gujarat was the

only state that exhibited impressive growth in the production of groundnut during

1991-2000, mainly because of yield growth.

In India, edible oil consumption has been growing steadily over the years.

From around 5 Mt in 1990-91, the aggregate consumption of edible oils has

gone up to 14 Mt in 2009-10. Groundnut, rapeseed-mustard, soybean and palm


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oil account for around 60 per cent of the edible oils consumed in the country.

At the aggregate level, total and per capita consumption of edible oils has been

increasing over time. In rural and urban India consumption of all edible oils

per month increased from 0.37 kg and 0.56 kg respectively, in 1993-94 to 0.64

kg and 0.82 kg in 2009-10. This translates into an increase of 72 per cent and 46per cent, respectively, among rural and urban households. The edible oils

requirement of the country has been projected at 16.34 Mt in 2016-17 and 20.36

Mt in 2020-21, i.e. at the end of 12thPlan and 13thPlan, respectively. Assuming

the business as usual scenario with no significant technological breakthroughs

and taking the yield level of 1026 kg/ha (triennium ending 2008-09) and a

compound annual rate of growth of 2.13 per cent in area and 2.44 per cent in

yield, which was observed during the previous decade, domestic edible oils

production is projected at 10.55 Mt in 2016-17 and 13.23 Mt in 2020-21. Given

the projected demand of 16.34 Mt, there will be a gap of 5.79 Mt in 2016-17which will have to be met through imports. Any further improvement in the

yield growth shall reduce dependence on the imports.

The proportion of imports in total availability (domestic production plus

imports) of edible oils has increased from the meagre 3 per cent in 1970-71 to

about 56 per cent in 2009-10. Significant changes are evident in the quantum of

imports of edible oils with reference to the periods that mark the implementation

of the Technology Mission on Oilseeds (TMO) and the emergence of the new

trade regime after the establishment of the WTO. From a high quantum of1944 thousand tonnes in 1987-88, imports came down to 114 thousand tonnes

in 1993-94. Imports started rising again after the establishment of the WTO

and the initiation of trade related reform measures. From around 347 thousand

tonnes in 1994-95, imports rose to 8034 thousand tonnes in 2009-10. Imports

of edible oils have serious implications for the domestic prices of edible oils as

imports are subject to international price volatility. Indias oil imports form a

big share in world trade, especially in palm oil and soybean oil. India has the

second position in import of palm oil (3.94 Mt) as well as soybean oil (10.18

Mt) contributing 13.25 per cent and 9.06 per cent, respectively, of the totalworld trade. A comparison of applied and bound tariff rates shows that except

for soybean and rapeseed/mustard, India has considerable flexibility to reduce

imports by making them costly by raising tariffs. A comparison of the minimum

support price (MSP) with the farm harvest prices shows that the farm harvest

prices have been generally higher than the MSP for the three major oilseeds.

Hence, MSP has little relevance for oilseeds. Moreover, very little procurement

of oilseeds is done, the emphasis of the countrys food management system

being on paddy and wheat in which case the MSP has been adequate over the

years.


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The current status of oilseed crops has been analyzed for the past three

decades which highlights the role of policy, technology and their interactions

in shaping it. The role of technological inputs, policy environment and price

systems in giving direction to the oilseeds economy cannot be over-emphasized.

The potential sources of growth and their related constraints throw light on thepossible future directions in oilseeds economy for sustaining its growth.

Enlarging the scope of research and technology diffusion and institutional

intervention beyond the farm gate is the way forward in re-energizing the oilseed

crop sector. Special emphasis may be given to the following:

Increase public research spending in oilseed crops for development of biotic

and abiotic stress tolerant varieties and other potential areas for yield

breakthrough.

Strengthen the oilseed crop seed chain, particularly in groundnut to match

the variety specific demand for higher yield.

Provide incentives to private sector participation in processing and value

addition in oilseed crops. Also, constraints for low capacity utilization should

be addressed.

Ensure availability of key physical (fertilizers, pesticides), financial (credit

facilities, crop insurance) and technical inputs (extension services) in major

crop ecological zones for oilseed crops.

Implement market reforms and policies, such as contract farming and public-

private partnership in production and processing, to ensure a competitivemarket for oilseeds and edible oil along with adequate protective measures

to avoid unfair competition from the international markets.

Improving local capacities and the social, economic and environmental

sustainability of agriculture through delivery of technology and services and

strengthening of institutions shall bring in the desired growth in the oilseed

crop economy. This growth will be of immense benefit to the country as oilseeds

are grown mainly in the disadvantaged regions.


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1

Introduction

Importance of oilseeds and edible oils in national economy

of India

India is the largest producer of oilseeds in the world and oilseed sector occupies

an important position in the agricultural economy of the country. Oilseeds are

among the major crops that are grown in the country apart from cereals. In

terms of acreage, production and economic value, these crops are second only

to foodgrains. India is the fifth largest vegetable oil economy in the world, next

only to USA, China, Brazil and Argentina, and has an annual turnover of about

Rs 80000 crore. India accounts for 12-15 per cent of oilseeds area, 7-8 per cent

of oilseeds production, 6-7 per cent of vegetable oils production, 9-12 per cent

of vegetable oils import and 9-10 per cent of the edible oils consumption.

With its rich agro-ecological diversity, India is ideally suited for growing all

the major annual oilseed crops. Among the nine oilseed crops grown in the

country, seven are of edible oils (soybean, groundnut, rapeseed-mustard,

sunflower, sesame, safflower and niger) and two are of non-edible oils (castor

and linseed). India ranks first in the production of most of the minor oilseeds(castor, niger, safflower and sesame). In the case of major oilseeds, India ranks

first in the production of groundnut, second in rapeseed-mustard, and fifth in

soybean. Oilseed crops contribute a significant proportion to the agricultural

GDP. In 2009-10 the area under nine oilseed crops was 26.11 M ha with

production of 24.88 Mt, and the total edible oils production in the country

stood at 6.17 Mt. Indias oilseed and edible oil sector is being increasingly

exposed to international markets and the influence of policy options like the

minimum support price and other market intervention policies have not been

able to generate the desired changes commensurating with the needs and target.

The productivity trends in annual edible oilseeds have shown considerable

variability in response to the prevailing policy environment and priority

considerations in India.

Following the constitution of Technology Mission on Oilseeds (TMO) in

1986, Indias oilseed production surpassed the target of 18 Mt, fixed for the

Seventh Five-Year Plan with an impressive annual growth rate of nearly 6 per

cent in the short-run. The subsequent achievement of near self-sufficiency in

edible oils during the early 1990s proved to be a temporary phenomenon as the

country began to depend heavily on imports from the later part of the decade to

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meet its domestic edible oil requirement. Indias import bill for edible oils was

more than Rs 26,485 crore during 2009-10 (Agricultural Statistics at a Glance,

2010).

The quantity of edible oils imported also shows an increasing trend. Edible

oil-import increased from 4.9 Mt in 2007-08 to 8.1 Mt during 2009-10. The

continued dependence on imports to meet the edible oils demand acts as a

significant drain on foreign exchange reserves of the country. The lack of

domestic availability of edible oils has got implications for nutritional security

also. The per capita consumption of edible oils at 12.7 kilogram per annum is

well below the world average of 23.46 kg/ annum. Imports of edible oils were

liberalized during 1996-97. This policy of liberalization stemmed, as much from

the lack of self-sufficiency in domestic edible oil production as from the

commitments under the new multilateral trade regime under WTO.

Consequently, cropping patterns in the country also changed after liberalizationof edible oil imports in 1996-97.

A wide range of other minor oilseeds of horticultural and forest origin,

including in particular coconut and oil-palm, are also grown in the country. In

addition, substantial quantities of vegetable oils are also obtained from rice

bran and cotton seed along with a small quantity from tobacco seed and corn.

The oilseeds area and output are concentrated in the central and southern parts

of India, mainly in the states of Madhya Pradesh, Gujarat, Rajasthan, Andhra

Pradesh and Karnataka. Among different annual oilseeds, groundnut, rapeseed-

mustard and soybean together account for about 80 per cent of oilseeds area

and 87 per cent of oilseeds production in the country (2008-09).

The demand for both edible and non-edible oils is increasing due to different

contributing factors like rising income, growing population and expanding

urbanization. As a result, there is an overall decline in the per capita availability

of edible oils. The domestic demand for vegetable oils and fats has been rising

rapidly at the rate of 6 per cent per annum, but our domestic output has been

increasing just by about 2 per cent per annum. The twin factors of rising demand

and declining per capita availability invariably lead to higher prices of edibleoils. Despite the premier position country holds in the global oilseed scenario,

the actual productivity of oilseeds is very low. The average yields of most oilseeds

in India are extremely low as compared to those prevailing in other countries

of the world. The average groundnut yield in India is 1.18 tonnes per hectare.

On the other hand in USA and China groundnut yield ranges between 3 and 4

tonnes per hectare. Similarly, in the case of rapeseed-mustard the average yields

in India are around 1 tonne per hectare, whereas in many other countries like

Germany and France, the average yields range between 3 and 4 tonnes per

hectare.


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In India, the cultivation of oilseeds is in high risk regions where there are

uncertain returns on investments. They are mostly grown in dryland areas which

are characterized with scanty and uneven rainfall, poor soil health, etc. It has

resulted in a high degree of variation in production of oilseeds annually. The

previously-evolved varieties have failed to bring the desired effect in productionof oilseeds. Such poor performance is further aggravated by the lack of any

technological breakthrough in developing high-yielding varieties (HYVs) of

oilseeds. There is lack of supply of quality seeds due to constraints in their

large-scale production. Also, farmers are hesitant to adopt improved varieties

of seeds; it requires high doses of fertilizers and pesticides, which require high

investment. Thus, there is a kind of virtual stagnation in the yield levels of most

oilseed crops.

The present scenario calls for some urgent measures to be taken to step-up

oilseeds production on a sustainable basis since the growth in oilseeds productionhas not kept pace with their increasing domestic demand. Exploiting the

emerging technologies and intensifying the use of land seem to be the feasible

options, when there are limited chances of area expansion. Introduction of

HYVs and development of genotypes will provide tailor-made vegetable oils

for the edible and industrial oils market. The post-WTO era, necessarily demands

adoption of a cohesive strategy to increase production of oilseeds in the country,

by both area expansion and productivity enhancement. To make the production

more lucrative, more value addition to oilseeds and oils is required. On-farm

demonstrations and adoption of improved technologies need to be embracedto get higher recovery of oils and higher recovery of oil through efficient

processing methods. Also, oilseeds and their various products need lucrative

and improved domestic marketing. Despite liberalized trade in the Indian oilseed

economy, continuous policy intervention heralds production, trade and

processing of oilseeds in India. In order to make these crops economically

superior and cost-effective, yield-boosting technologies need to be developed.

Policy change is likely to play key role in achieving the desired growth and

composition of Indias oilseed and product trade.

Oilseed economy of India: Concerns and issues

The oilseed economy of the country faces a host of challenges on technological,

institutional and policy fronts. The capability in designing and implementing

innovative approaches to adequately address each of these challenges will

determine the future of the oilseed economy of India. Oilseed cultivation in

India is predominantly dependent on rainfall and this leads to a higher magnitude

of instability in production of oilseeds. Often, the marginal lands are earmarked

for cultivation of oilseed crops. Such inherent disadvantages ensure that a level-

playing field is not provided to the oilseed crops even when they are being


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compared increasingly with their competing crops in terms of production,

productivity and profitability. The countrys population is accustomed to cheap

vegetable oils due to the invisible and visible subsidies in the supply side which

have been in existence for quite a long time. The unviable nature of some of

these subsidies means that they will have to be withdrawn, at least partially inthe near future. This will translate into higher retail prices of edible oils at the

consumer end of the edible oil value chain, unless and until the supply-side

constraints are addressed in a focused manner. Current per capita vegetable oil

consumption in India is much higher than that recommended by nutritionists.

This calls for a serious thinking on the implementation of programmes to

increase awareness about adequate levels of vegetable oil consumption,

especially at a time when domestic supply demand mismatch is affecting national

self-sufficiency in edible oil production.

A major concern for the policy planners involved in ensuring the domesticavailability of edible oils is the fact that domestic prices of oilseeds and vegetable

oils is too un-remunerative to enthuse farmers for intensive oilseeds cultivation.

The income terms of trade for the oilseed cultivators vis-a-vis farmers cultivating

other crops need to be balanced. The diversion of vegetable oils for the

production of biodiesel is another emerging issue, albeit of manageable

proportions as on date, but with a potential to redrawing the planning horizon

and adversely impacting predicted levels of edible oils availability.

Another concern for oilseed cultivators in particular is the lack of availability

of quality seed material of improved cultivars. Though the National Agricultural

Research System (NARS) has developed several varieties with high yield-

potential and varieties suited for specific farming situations, quality seeds of

these varieties are in short supply. The timeliness in making available quality

seeds is also of critical importance as the window for sowing the crops tend to

be of short duration. A related but derivatively different constraint associated

with oilseed cultivation is that some of the best nationally released varieties do

not find recommendations at the state level. The cause of the problem may lie

in the existing weak research-extension linkages for oilseed crops at the national

and state levels, and the mitigation of this particular constraint should be given

due importance in any programme which aims to enhance the production and

productivity of oilseed crops in the country.

Inadequate and imbalanced crop nutrition, the slow pace in bridging the

yield gap and lack of adoption of the appropriate agronomic practices and

available technologies are some of the key issues related to the production of

oilseed crops. It is unfortunate that the level of production that is achievable

with the available technology is not being realized due lack of adoption of

technologies by the oilseed cultivators.


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The processing sector is integral to the oilseed sector. A vibrant and efficient

processing sector is a pre-requisite for the optimum growth and development of

oilseed economy. Indias oilseed processing sector has been plagued by a slew

of technological and policy issues culminating in the existence of a processing

sector low in efficiency and capacity utilization. If the oilseed cultivators haveto be linked in an economically viable and sustainable manner to the oilseed

value chain, the role of oilseed processing units cannot be underestimated. The

market intervention policies of the past have not only failed to produce the

desired results and effects, but have also created an atmosphere of uncertainty.

The absence of a cohesive policy on market interventions has hurt the interest

of oilseed cultivators and traders alike. Hence, an issue which requires serious

examination is the role and nature of market interventions as a tool for achieving

the pre-determined objectives. Similar to the case of market interventions is the

issue of external trade policies vogue for oilseeds and edible oils.

The fluctuating and counter directional policies with respect to imports

and exports have left the stakeholders unsure of the long-term strategies they

should opt and this ultimately hurts the interest of the nation. The outcome of

such market interventions and trade policies was distortion and introduction of

inefficiencies in the price discovery process and ultimately affecting the relative

price structure of oilseeds and their derivatives with respect to their competing

crops and produce. The impact of oilseed and edible oil import and export

policy on consumers, farmers and industry needs to be understood in this context.

The lack of understanding of the dynamics of various economic forces in

operation due to the policy shifts is an important issue as far as the oilseed

economy of the country is concerned.

Another issue of prominence in the oilseed economy of India is the potential

and means to optimally utilize this potential for augmenting the domestic edible

oil availability from the secondary sources. This requires policy interventions

in the form of price signals and other incentives. An area which requires critical

thinking and analysis is the role of non- traditional crops in the edible oil

economy of the country. In face of several constraints that exist in the spread of

non-traditional crops, it must be remembered that they can still play a significantrole provided an enabling policy framework is in place. Thus, augmenting edible

oil availability from the secondary and non-traditional sources can reduce

pressure on the traditional oilseed crops for technological breakthroughs at a

fast pace.

Managing price, income and production risks in oilseed cultivation is an

area where little attention has been paid in the past. This scenario needs to be

changed. There is a growing realization that successful management of the risk

elements in crop production and marketing is vital for the stakeholders to

continue cultivation of the oilseed crops. Forward looking policies on mitigation


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of various kinds of risks in oilseed cultivation is a critical ingredient for a healthy

oilseed economy. All options for such risk mitigation like future markets, buffer

stock operations, other commodity price stabilization schemes, etc. need to be

explored for oilseeds.

The emerging scenario for oilseeds is fluid with fast paced changes amongst

a mosaic of technologies, policies and trade interventions and scenarios. A

systematic study of these issues will be of immense help in formulating

appropriate strategies for achieving pre-determined targets with respect to

domestic oilseed and edible oil production.

Scope and objectives of the study

The oilseed economy of India is quite complex with a multitude of stakeholders

in the form of oilseed cultivators, processors, consumers, and intermediariesacross the oilseed value-chain. The government is also a stakeholder with welfare

of the different categories of stakeholders as its prime interest. Such a complex

scenario needs to be studied in depth to arrive at valid and useful conclusions

which may enable effective policy interventions. With this background, a study

to ascertain the present and future edible oil needs of the country, current

production and its deficiencies, yield position, trade in oilseeds and edible oils

and its impact on the economy was formulated. The study aimed to assess the

demand and supply scenario of oilseeds and edible oils in the country and to

suggest measures to increase the production of oilseeds to make the country

self-reliant in edible oil production. For this, following objectives were framed:

To study the temporal and regional trends in production and productivity

of major oilseed crops, yield gaps, production constraints, and seed

availability in the country.

To examine trends in the consumption of edible oils in the country and

assess demandsupply gap.

To examine trade pattern and polices of edible oils and its impact on the

oilseed economy of the country.

To suggest suitable policy options to increase oilseed productivity and bridge

demand-supply gap.


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Trends in Production and Productivity

of Oilseds in India

Oilseeds production and productivity scenario

There have been dramatic changes in the oilseeds scenario in the country since

the implementation of Technology Mission on Oilseeds (TMO) in 1986.

In order to examine the temporal trends in area, production and productivity

of major oilseeds crops, time series secondary data was collected, depicted

(Figure 1) and analyzed.

The area, production and productivity of oilseeds grew with the compound

annual growth rates of 1.58 per cent, 3.05 per cent and 1.45 per cent, respectively

during the period 1950-2009. Instability in area, production and productivity

of oilseeds has been computed using coefficients of variation. Maximum

variability has been observed in the case of production (54.81 %), followed byproductivity (28.65 %) and area (27.45 %) of oilseeds during the period 1950-

2009.

The production of the nine oilseeds jumped from 9 Mt in 1980 to more

than 27 Mt in 2009 with an annual growth rate of 3.53 per cent per annum

(Table 1). During this period, area and productivity of the nine oilseeds registered

the annual growth rates of 1.46 per cent and 2.05 per cent per annum,

respectively. The growth rate in area expansion ranged from -5.27 per cent in

linseed to 10.73 per cent in soybean. The production growth rate ranged from

Figure 1. Trends in area, production and yield of nine oilseeds in India

Chapter 2


22/113

8

T

able1.Period-wisegrowthr

ates(%)inarea,productionandyieldofdifferentoilseedcropsatall-Indialevel:1980-

81to2009-10

Oilseedcrop

Area(Mha)

Production(Mt)

Yield(kg/ha)

1980-81

1990-91

2000-01

1980-81

1980-81

1990-91

2000-01

198

0-81

1980-81

1990-91

2000

-01

1980-81

to

to

to

to

to

to

to

to

to

to

to

to

1989-90

1999-00

2009-10

2009-10

198

9-90

1999-00

2009-10

200

9-10

1989-90

1999-002009-10

2009-10

Groundnut

0.68

-2.1

5

-1.08

-0.75**

2.22

-0.35

1.69

0.46

1.53

1.84

2.80

1.21**

Rapeseed-mustard1.77

2.18

2.84

1.87**

7.72

1.94

4.97

4.25**

5.84

-0.23

2.08

2.34**

Soybean

17.41

12.0

3

4.96

10.73**

17.80

14.81

7.12

12.73**

0.33

2.48

2.06

1.81**

Sunflower

31.42

1.38

5.67

6.63**

25.73

2.39

8.24

7.64**

-4.33

1.00

2.43

0.94**

Sesame@

-1.06

-4.9

1

1.28

-1.66**

2.90

-4.23

4.02

0.78*

4.00

0.72

2.70

2.48**

Castor@

2.25

-0.1

8

-1.81

1.48**

2.90

5.21

2.63

5.00**

4.00

0.72

2.70

2.48**

Safflower@

3.27

-3.4

9

-2.81

-3.51**

3.61

-3.96

-1.00

-3.08**

0.34

-0.49

1.85

0.45

Linseed@

-4.99

-4.1

9

-4.97

-5.27**

-1.90

-2.53

-4.62

-3.50**

3.24

1.74

0.37

1.86**

Niger@

0.75

-1.8

0

-1.71

-1.36**

3.15

-2.52

-2.28

-1.26**

2.38

-0.73

-0.58

0.10

Nineoilseeds

1.98

1.04

2.13

1.46**

4.69

3.11

4.62

3.53**

2.66

2.06

2.44

2.05**

Coconut$#

3.00

2.95

0.77

2.43

4.02

3.89

2.08

3.75

0.99

0.91

1.30

1.29

*

*Significantat1%,*significantat5%and@1980-81to2007-08,

$1980-81to2008-09

#

Productioninhundredmillionnu

tsandyieldasnuts/hectare

S

ource:BasedondataofDirectora

teofEconomicsandStatistics,G

overnmentofIndia,NewDelhi.


23/113

9

-3.50 per cent in linseed to 12.73 per cent in soybean. Castor, sunflower and

rapeseed-mustard also exhibited a healthy growth rate in respective production.

The productivity growth rate ranged from 0.10 per cent in niger to 2.48 per cent

in both sesame and castor. Table 1 clearly indicates that most of the growth

rates in area, production and productivity were statistically significant duringthe period 1980-2009. The area expansion was highest in soybean despite low

productivity, primarily due to the economic superiority of soybean over other

corps and its cultivation in fallow land. In order to understand the decadal

growth pattern in the oilseed sector, period-wise annual growth rates were

computed.

Figure 2. Trends in area expansion in various oilseeds

On overall basis, there was a decline in the annual growth rates of area,

production and productivity of oilseeds during 1991-2000 as compared to 1981-

1990. The positive trend during the 1980s could be due to government initiatives

in the form of TMO as well as price and marketing support for oilseeds growers.

The reverse trend during the 1990s may be due to opening up of imports and

exports of agricultural commodities. As a result the total oilseed production

increased from 9 Mt to 18 Mt between 1980-81 and 1990-91. During this period,

soybean demonstrated the highest growth rate in area and production, viz. 17.41per cent and 17.80 per cent, respectively. During 1990-2000, the pace of growth

in area, production and productivity of all the nine oilseeds fell to 1.04 per cent,

3.11 per cent and 2.66 per cent, respectively; this was mainly due to decrease in

oil prices relative to other crops and liberalization of edible oil imports in 1996-

97. The government price support mechanism has continuously favoured wheat

and rice crops and not the oilseeds crops, which has led to lowered oilseed

cultivation. The area, production and productivity of coconut grew with the

compound annual growth rates of 2.43 per cent, 3.75 per cent and 1.29 per

cent, respectively during the period 1980-2009 (Refer Table 1).


24/113

10

Regional variations in oilseeds production

There has been a wide regional variation in area, production and productivity

of oilseeds during the past three decades. Table 2 reveals that the country as a

whole recorded 2.36 per cent, 5.09 per cent and 2.67 per cent growth rates in

area, production and productivity respectively, during the period 1980-2009.

Among the major states Rajasthan, Madhya Pradesh and Maharashtra exhibited

the healthy growth rate in area, production and productivity during 1980-2009.

Table 2 also reflects that Rajasthan registered highest annual growth rates in

area (4.92 %), production (8.30 %) and productivity (3.22 %) among the major

oilseeds producing states during this period. Andhra Pradesh recorded a

negligible annual growth rate of 0.52 per cent in productivity, while Karnataka

showed a negative growth rate of -0.08 per cent in productivity during 1981-

2009. The percentage change in area, production and productivity of oilseeds

crops after 1986 for the major states shows that only a few states like Haryana,Madhya Pradesh, Maharashtra, Rajasthan and West Bengal increased their

oilseeds production through both area as well as productivity improvement

(Table 6). Gujarat increased its oilseeds production mainly through productivity

improvement. In some states like Punjab and Assam, oilseeds production

declined mainly due to decline in their area, while in Odisha, both area and

productivity declined sharply, leading to a large decline in oilseeds production.

The cropping pattern in many states has undergone changes which were

pertinent to oilseed crops as well. The relative importance of oilseed crops has

increased in many states during 1985-86 to 2008-09 (Table 7). Soybean whichwas fifth in terms of area during 1985-86 in Madhya Pradesh, occupied the first

place in 2008-09. During the same period, rapeseed-mustard moved from the

fourth rank to second place in terms of area in Rajasthan. In the case of Gujarat,

groundnut which had occupied the first position with respect to area was replaced

by cotton in the 2008-09. During this period, soybean in Maharashtra, and

rapeseed-mustard in Haryana occupied the place among top five crops of the

states in terms of acreage. In Karnataka, sunflower became an important crop

replacing crops like pearl millet and cotton. The area expansion in oilseeds

during the past two decades was possible mainly because of replacement of

non-remunerative crops like millets and minor food crops and partly from

increase in cropping intensity.

Trends in major oilseed crops

Soybean

India ranks fifth in production (10 Mt) of soybean in the world. It is a kharif-

crop, grown predominantly in the states of Madhya Pradesh, Maharashtra and

Rajasthan. The crop gained importance in India as a source of protein and


25/113

11

T

able2.Period-wisegrowthrates(%)inarea,production

andyieldofnineoilseedcropsformajoroilseeds-produ

cingstatesof

India:1980-81to2008-09

State

Area(Mha)

Production(Mt)

Yield(kg/ha)

1980-8119

90-91

2000-01

1980-81

198

0-81

1990-91

2000-01

1980-81

1980-81

1990-91

2000

-01

1980-81

to

to

to

to

to

to

to

to

to

to

to

to

1989-9019

99-00

2008-09

2008-09

198

9-90

1999-00

2008-09

2008-09

1989-90

1999-00

2008-09

2008-09

Rajasthan

8.30

4.63

6.25

4.92

14

.54

6.19

10.28

8.30

5.76

1.49

3.79

3.22

MadhyaPradesh

5.97

6.43

1.04

4.55

11

.74

9.66

3.89

8.05

5.44

3.04

2.8

3

3.34

Gujarat

-1.44

0.66

2.55

1.13

-2

.68

5.23

7.24

2.91

-1.26

4.54

4.58

1.77

Maharashtra

3.25

0.09

4.70

1.68

3.80

3.17

6.14

4.86

0.54

3.08

1.38

3.13

AndhraPradesh

3.76

-1.53

0.10

0.87

6.51

-2.49

2.25

1.39

2.66

-0.97

2.1

4

0.52

Karnataka

8.77

-1.30

3.51

1.70

9.63

-0.43

1.19

1.62

0.78

0.88

-2.24

-0.08

TamilNadu

1.46

-1.78

-4.51

-2.02

3.70

2.64

-3.41

0.52

2.21

4.49

1.1

5

2.59

Otherstates

-2.71

-3.19

1.09

-1.37

1.91

-3.37

8.02

0.61

4.76

-0.19

6.85

2.01

All-India

1.47

1.81

1.04

2.36

3.57

4.42

3.11

5.09

2.06

2.57

2.0

6

2.67

S





26/113

12

edible oil and was introduced for cultivation around 1980s, until then it was

grown in small amounts in the hills of northern India. The technological

breakthrough, backed by policy support led to large shifts in crop patterns. All

India Coordinated Research Project (AICRP) played a critical research &

development role in evolving suitable varieties of soybean and product utilizationas food for human and feed for cattle. As is evident from Table 3, soybean

production in the country recorded a positive growth rate during 1980-2009.

The rate of growth in production is estimated to be around 12 per cent at all-

India level, whereas at the state level, it was 25.77 per cent for Maharashtra and

21.17 per cent for Rajasthan. The increase in production was mainly due to

significant expansion in area during 1981-1990, viz.16.71 per cent. Madhya

Pradesh recorded a significant decline in the yield rates of soybean in the same

period (-0.49 %). This was because of lesser use of improved seeds and bringing

of more marginal land under soybean cultivation. However, there was a positive

growth in yield rates in subsequent decades. There was a significant decline in

the growth rates of area (3 %) and production (6.91 %) during 2001-09 in

Rajasthan. The establishment of National Research Centre for soybean at

Indore, Madhya Pradesh and AICRP on soybean as well as the political and

financial support from the central and state governments together with private

sector investment in soybean utilization and marketing led to a rapid increase

in soybean cultivation. Thus, major expansion took place in Madhya Pradesh

accounting for 55.80 per cent of area under soybean cultivation. Madhya

Pradesh along with Maharashtra and Rajasthan account for more than 95 per

cent of the area under cultivation and production of soybean in the country.

Rapeseed-mustard

India ranks second both in the production (6.82 Mt) as well as in the area under

cultivation (6.27 M ha) of rapeseed-mustard in the world. Rapeseed-mustard is

a rabi crop predominantly grown in the states of Rajasthan, Uttar Pradesh,

Madhya Pradesh and Haryana. These states together contribute 4.90 M ha of

the area and produce 5.60 Mt of rapeseed-mustard. It is mainly used as edible

oil and medicine for burning. Its use is limited for industrial purposes owing to

high cost. The area, production and productivity of rapeseed-mustard grewwith the compound annual growth rates of 1.88 per cent, 4.18 per cent and

2.26 per cent, respectively during 1980-2009 (Table 4). As is evident from Table

4, Rajasthan is the leading rapeseed-mustard producing state though its share

has declined in recent years. The production, area and yield of rapeseed-mustard

seed experienced a significant growth from 1985-1995, primarily due to the

increase in irrigated land and the availability of high-yielding seeds in the

country. This trend was partly reversed due to intermittent famine conditions

in some of the major rapeseed-mustard producing states, such as Rajasthan.

Both area and output fell from 12.98 per cent in 1981-90 to 5.79 per cent in


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13

T

able3.Period-wisegrowthr

ates(%)inarea,productionandyieldofsoybeancrop-pro

ducingstates:1980-81to200

8-09

State

Area(Mha)

Production(Mt)

Yield(kg/ha)

1980-8119

90-91

2000-01

1980-81

198

0-81

1990-91

2000-01

1980-81

1980-81

1990-91

2000

-01

1980-81

to

to

to

to

to

to

to

to

to

to

to

to

1989-9019

99-00

2008-09

2008-09

198

9-90

1999-00

2008-09

2008-09

1989-90

1999-00

2008-09

2008-09

MadhyaPradesh

18.02

1

0.54

1.02

9.75

17

.44

12.84

3.86

11.29

-0.49

2.08

2.82

1.40

Maharashtra

13.99

2

3.32

13.86

19.46

31

.10

29.72

12.12

25.77

15.01

5.19

-1.53

5.28

Rajasthan

38.77

1

7.96

3.00

18.54

46

.80

20.64

6.91

21.17

5.78

2.27

3.80

2.22

Otherstates

-5.25

-4.13

5.25

2.54

-2

.01

-3.60

9.10

3.74

3.43

0.56

3.66

1.16

India

16.71

8.06

5.93

9.72

19

.56

9.51

8.98

11.67

2.44

1.34

2.88

1.77

T

able4.Period-wisegrowth

rates(%)inarea,productionandyieldofmajorrapesee

d-mustardcrop-producingst

ates:1980-81

to2008-09

State

Area

(Mha)

Production(Mt)

Yield(kg/ha)

1980-8119

90-91

2000-01

1980-81

198

0-81

1990-91

2000-01

1980-81

1980-81

1990-91

2000

-01

1980-81

to

to

to

to

to

to

to

to

to

to

to

to

1989-901999-002008-09

2008-09

198

9-90

1999-00

2008-09

2008-09

1989-90

1999-00

2008-09

2008-09

Rajasthan

12.98

5.79

7.52

6.17

15

.11

5.14

10.79

7.96

1.88

-0.62

3.0

4

1.69

UttarPradesh

-9.97

0.32

-2.17

-2.75

-5

.12

-0.12

-0.12

0.00

5.39

-0.44

2.0

9

2.82

Haryana

5.93

4.30

4.62

3.31

10

.21

3.70

6.87

5.43

4.04

-0.57

2.1

4

2.05

MadhyaPradesh

6.35

1.22

3.73

3.98

13

.05

1.18

3.12

6.61

6.30

-0.04

-0.59

2.53

Otherstates

5.37

-2.83

1.26

0.92

9.93

-2.23

3.20

2.25

4.33

0.61

1.9

2

1.32

India

0.93

2.18

3.87

1.88

5.87

1.94

6.24

4.18

4.89

-0.23

2.2

8

2.26

S





28/113

14

1991-2000 and 15.11 per cent in 1981-90 to 5.14 per cent in 1991-2000,

respectively. The growth rate in production bounced back to 10.79 per cent in

2001-09 as growth in yields and the total area under cultivation increased to

3.04 per cent and 7.52 per cent, respectively.

Groundnut

India ranks first in acreage occupying 6.17 M ha of area under cultivation and

second in production of groundnut producing 7.29 Mt in the world, after China

(13.58 Mt). In India, groundnut is predominantly grown in the states of Gujarat,

Andhra Pradesh, Karnataka and Tamil Nadu. In terms of area, Gujarat ranked

first with 31 per cent of area under cultivation during 2009-10, followed by

Andhra Pradesh (27.09 %), Karnataka (13.94 %) and Tamil Nadu (8.52 %).

Similarly, in production, Gujarat ranks first with 34.9 per cent, followed by

Andhra Pradesh (23.08 %), Tamil Nadu (14.31 %) and Karnataka (7.60 %).These states account for around 80 per cent of area and production of groundnut

in the country. The country registered the negative annual growth rates of 0-.66

per cent in area, 0.54 per cent in production and 1.21 per cent in productivity of

groundnut during 1981-09 (Table 5). During the period 1981-90, among the

major groundnut-producing states, Gujarat was the only state which recorded a

significant decline in area, production and productivity, the respective growth

rates being -3.92 per cent, -5.62 per cent and -1.77 per cent. However, after

1990, there has been a consistent increase in area, production and productivity

of groundnut in Gujarat. Both Tamil Nadu and Karnataka have shown a

decreasing trend in area and output of groundnut. The current productivity of

groundnut is more than a tonne per hectare. In India, the on-farm demonstrations

carried out jointly by Indian Council of Agricultural Research (ICAR) and

International Crops Research Institute for Semi-Arid Tropics (ICRISAT),

comparing local cultivators and local practices with improved cultivators and

improved production technology, have contributed to the increased productivity

of groundnut. The groundnut crop recorded a significant decline in area and

production during the period 1991-2000. The growth rates in area under

cultivation (-2.15 %), production (0-.35 %) and productivity (1.84 %) are lowest

during this decade, this was mainly due to the gradual replacement of groundnutcrop by cotton, soybean and sunflower. The droughts and insufficient monsoon

rains also affected the production and productivity of groundnut. Gujarat was

the only state that exhibited a marginal positive growth in area (0.15 %) and

impressive growth in production of groundnut during 1991-2000.

International oilseeds productivityA comparison

India contributes approximately 50 per cent share to the total area under

cultivation in Asia for major oilseeds, namely groundnut, soybean and rapeseed-


29/113

15

T

able5.Period-wisegrowthrates(%)inarea,productionandyieldofmajorgroundnut

crop-producingstates:1980-

81to2008-09

State

Area(Mha)

Production(Mt)

Yield(kg/ha)

1980-8119

90-91

2000-01

1980-81

198

0-81

1990-91

2000-01

1980-81

1980-81

1990-91

2000

-01

1980-81

to

to

to

to

to

to

to

to

to

to

to

to

1989-901999-002008-09

2008-09

198

9-90

1999-00

2008-09

2008-09

1989-90

1999-00

2008-09

2008-09

Gujarat

-3.92

0.15

0.16

-0.18

-5

.62

6.10

9.71

2.15

-1.77

5.94

9.5

4

2.34

AndhraPradesh

4.55

-

2.52

-1.11

0.27

6.01

-3.26

-0.33

0.11

1.40

-0.76

0.7

8

-0.17

TamilNadu

1.64

-

1.74

-4.45

-2.02

3.17

2.52

-3.97

0.50

1.51

4.34

0.5

0

2.58

Karnatak

4.08

-1.04

-2.29

0.24

6.78

-0.30

-5.64

0.02

2.59

0.76

-3.44

-0.23

Otherstates

-0.07

-5.33

0.01

-2.21

2.98

-5.54

2.55

-1.24

3.05

-0.22

2.5

3

0.99

India

0.95

-2.15

-1.06

-0.66

2.82

-0.35

1.67

0.54

1.85

1.84

2.7

5

1.21

S



overnmentofIndia.


30/113

16

mustard, while its respective shares in world area are 27 per cent, 20 per cent

and 10 per cent (Table 8). Though India occupies a premier position in the

global oilseeds scenario, its average yield for major oilseeds is 40-60 per cent

below the world average and has been growing at a slow pace (Table 9). Most

oilseeds are grown by small-scale, limited-resource farmers in areas that are

dependent on erratic monsoon rainfall, with only about 26-28 per cent of oilseed

area irrigated. Faced with considerable weather-related risks, oilseed producers

invest little on improved seeds, fertilizers, and pesticides. Oilseed farmers also

face considerable price risk because the minimum support prices set for oilseeds

are typically either too low to influence the market prices or are not adequately

defended by government purchases. The productivity difference with the world

average is marked for all the major oilseed crops of the country (Table 9).

Yield Gap Analysis of Major Oilseeds

Meaning of yield gap

It is always a matter of concern for the research managers and development

administrators to ensure that the real potential of any crop variety is harvested

Table 6. Percentage change in area, production and yield of oilseed crops in selected

states of India: TE 1985-86 and 2008-09

State Area Production Yield

Andhra Pradesh 16.89 51.90 28.61

Assam -20.41 -13.64 7.82

Bihar -41.67 4.88 79.77

Gujarat 14.32 119.01 94.22

Haryana 111.24 206.67 47.25

Karnataka 46.29 28.28 -13.66

Madhya Pradesh 131.62 350.38 94.42

Maharashtra 69.51 213.09 84.74

Odisha -66.55 -75.32 -26.19

Punjab -63.16 -51.92 33.26Rajasthan 156.90 402.62 93.43

Tamil Nadu -40.24 2.11 71.25

Uttar Pradesh -42.95 -1.22 72.35

West Bengal 83.04 194.03 60.76

Others -73.04 -76.94 -14.88

All India 43.14 124.92 57.05

Source: Based on data of Directorate of Economics and Statistics, Government of India,

New Delhi.


31/113

17

Table 7. Shift in cropping pattern in selected states of five most important crops

during TE 1985-86 to TE 2008-09

State Year Five most important crops in terms of area

(TE) I II III IV V

Andhra Pradesh 1985-86 Rice Jowar Groundnut Cotton Bajra

2008-09 Rice Groundnut Cotton Maize Gram

Gujarat 1985-86 Groundnut Cotton Bajra Jowar Wheat

2008-09 Cotton Groundnut Wheat Bajra Rice

Haryana 1985-86 Wheat Bajra Gram Rice Cotton

2008-09 Wheat Rice Bajra Mustard Cotton

Karnataka 1985-86 Jowar Rice Groundnut Cotton Bajra

2008-09 Rice Jowar Sunflower Maize Groundnut

Madhya Pradesh 1985-86 Rice Wheat Gram Jowar Soybean2008-09 Soybean Wheat Gram Rice Maize

Maharashtra 1985-86 Jowar Cotton Bajra Rice Wheat

2008-09 Jowar Cotton Soybean Rice Gram

Rajasthan 1985-86 Bajra Wheat Gram Mustard Jowar

2008-09 Bajra Mustard Wheat Gram Maize

Uttar Pradesh 1985-86 Wheat Rice Gram Mustard Maize

2008-09 Wheat Rice Bajra Maize Mustard

West Bengal 1985-86 Rice Jute Wheat Mustard Sesame

2008-09 Rice Jute Mustard Wheat Sesame

Source: Based on data of Directorate of Economics and Statistics, Government of India, New Delhi.

Note:Oilseed crops are set in bold.

at the farmers field. In reality, however, a gap always prevails between what is

projected as the potential yield of any variety at research station and what is

obtained on organized farm trials and further what is harvested by the farmers

themselves. Technically, this is referred as yield gaps of different types. The

yield gap is defined as the difference between the maximum-attainable yield

and the farm-level yield. This may be further defined in the following ways.Maximum attainable yield is the yield of a crop variety on the research farm

plot with no physical, biological or economic constraints and with the best known

management practices at a given time and in a given ecology. Attainable yield

is the maximum yield that a sample farmer can achieve by following most of

the technologies that are possible and known to the farmer and with the

maximum efforts. Attainable yield is obtained by the farmer with his experience

and knowledge. Farm-level yield is the average farmers yield in a given target

area at a given time and in a given ecology. Anticipated yield is the yield

anticipated by the farmers based on the actual efforts and technology followed


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18

Table 8. Percentage share of India in area and production of oilseeds in Asia and

World: 2008-09

Oilseed crops % Share to Asia % Share to World

Area Production Area Production

Soybean 47 38 10 5

Rapeseed-mustard 45 34 20 12

Groundnuts (with shell) 51 30 27 20

Sunflower seed 37 24 8 4

Sesame seed 41 30 24 19

Castor seed 78 84 58 73

Linseed 44 23 21 8

Safflower seed 71 65 46 35

Coconut 21 21 17 18

Source: FAOSTAT

Table 9. Productivity of oilseeds: A comparison of India and world average (tonnes/

hectare): 2008-09

Oilseed crop India World Indian share in Highest productivity

average world (%)

Volume Country

Soybean 1.01 2.35 43.0 2.74 U.S.A.

Sunflower 0.62 1.25 49.6 1.75 China, PR

Linseed 0.34 0.84 40.5 1.17 EU-27

Cottonseed 0.94 1.24 75.8 2.52 Australia

Rapeseed 0.96 1.71 56.1 3.00 EU-27

Castor seed 1.08 0.95 113.7 1.08 India

Groundnut 0.68 1.05 64.8 2.53 U.S.A.

Sesame seed 0.38 0.45 84.4 1.00 China, PR

Source

: FAOSTAT

by the farmers best known to them. Observed/actual yield is the actual yield

realized by the farmer.

Typology of yield gap

The methodology developed by International Rice Research Institute (IRRI)

has been followed to estimate the magnitude of yield gaps, wherein potential

yield, farm yield and farmers yield are defined as yield obtained on research

stations, demonstration plots and farmers fields, respectively. The yield gap is


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the difference between potential yield and actual yield. It can be decomposed

into two parts, viz. Yield Gap I and Yield Gap II. Yield gap I is the difference

between experimental stations average attainable maximum yield (at least two

different locations and varieties under cultivation) and on-farm experiments

average maximum yield. This yield gap arises from differences in environmentthat cannot be managed in the farmers fields. Yield gap II, which is of primary

concern for the present study is the difference between yield attained in on-

farm experiments and the average actual farm yield. This gap reflects the effects

of biological, soil and water, physiological, genetic and socio-economic

constraints. This gap exists because farmers use suboptimal doses of inputs and

cultural practices. It is manageable and narrowed by increasing efforts in research

and extension services, as well as by appropriate government intervention,

particularly in institutional issues. In practice, yield gaps are also classified

according to constraints, such as.

1. Agronomic gap:mainly due to biological and partly due to physical

constraints

2. Socio-economic gap:mainly due to socio-economic constraints

3. Institutional gap:mainly due to institutional constraints

4. Mixed gap:due to the above constraints. In this case, the socio-economic

and institutional constraints should be solved before the agronomic gaps

can be narrowed using improved technological packages.

Factors of yield gap

The factors causing yield gaps can be classified according to their nature and

the degree to which they contribute to the gaps:

1. Biophysical or Agronomic gap:mainly due to biological and partly because

of physical constraints such as climate/weather, soil, water, weeds.

2. Technical/Management gap:due to tillage, variety, seed selection, nutrients,

pests, and post-harvest management.

3. Socio-economic gap: due tosocio-economic status, farmers tradition and

knowledge, family size, household income/expenses/investment.

4. Institutional policy gap:due to government policy, credit, input supply,

land tenure, market research and development, extension.

5. Technology transfer and linkage gap: the competence and facilities of

extension staffs, integration among research, farmers resistance to new

technology; knowledge and skills, weak linkage among public, private and

non-governmental extension staff.


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Measurement of yield gap

In the present study, yield gap I is computed on the basis of potential yield of a

particular variety of specific regions for each crops. It is the gap between potential

yield (PY) of a variety and the yield of improved variety (IV) at the research

station, i.e.

Yield gap I = PY IV

Gap I (%) = 100PY

IVPY

Similarly, Yield gap II is the difference between the yield of improved variety

at the research station and at farmers field, i.e.

Yield gap II = IV FV

Gap II (%) =

where, PY=Potential yield claimed by breeders, IV=Yield at research station,

and FV= Yield at farmers field. IV and FV are taken from the Front-Line

Demonstration (FLD), a concept of field demonstration evolved by ICAR, with

the inception of Technology Mission on Oilseed (TMO) crops during mid-1980s

(1986). The major objective of FLD is to demonstrate the productivity potentials

and profitability of the latest and improved oilseed production technologies

under real farm conditions. In this study, an attempt was made to assess the

exploitable yield reservoir in case of different oilseeds using FLD data. In order

to remove the year-to-year variations, analysis was carried out by averaging the

data pertaining to the years 2007-08 and 2008-09. Besides, computation of yield

gap I and yield gap II for major and minor states, classification of states according

to their yield and yield gaps, respectively were also done. Different states are

classified into four categories:

1. High Potential, High Gap2. High Potential, Low Gap

3. Low Potential, High Gap

4. Low Potential, Low Gap

The High-Potential, High-Gap states are those states which have high

potential yields and correspondingly high yield gaps. In order to examine the

change in yield gap position over a decade, gaps were also calculated with the

FLD data pertaining to the year 1999-2000.


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Assessment of yield gap of major oilseed crops

Rapeseed-mustard

Rapeseed-mustard is the major source of income, especially for the marginal

and small farmers in the rain-fed areas. Because of its low water requirement,rapeseed-mustard crops fit well in the rainfed cropping system. Current data of

front line demonstration revealed that the yield gap II ranged from 4.68 per

cent (Madhya Pradesh) to 17.71 per cent (Uttar Pradesh) among major oilseeds

growing states, while this gap was as low as 4.22 per cent in Maharashtra and

as high as 56.57 per cent in Odisha among minor oilseeds growing states

(Table 10). Yield gap I for the same period was observed to be 30.31 per cent in

Madhya Pradesh and 56.65 per cent in Uttar Pradesh. These states account for

large acreage under rapeseed-mustard, indicating tremendous untapped

potential. The yield gap II at the national level was observed as 21.01 per cent.In view of the classification according to potential yield and gaps, Rajasthan,

Haryana, Madhya Pradesh, Gujarat, and Punjab are the states in category of

high potential and low gap. Analysis clearly indicated that yield gap I has

increased, while yield gap II has decreased at the national level over time. This

situation warrants an urgent need to effectively disseminate the improved

rapeseed-mustard technologies among the oilseed growers, so that these gaps

could be narrowed down.

Table 10. Yield gap in rapeseed-mustard growing states

States Base year Current year % Increase over

1999-00 to 2000-01 2007-08 to 2008-09 the base year

Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II

(%) (%) (%) (%) (%) (%)

Major Haryana 7.53 16.01 5.97 10.20 1.56 5.81

Madhya Pradesh 37.74 28.63 30.31 4.68 7.43 23.95

Rajasthan 11.78 10.02 15.77 12.51 -3.99 -2.49

Uttar Pradesh 17.30 22.31 56.65 17.71 -39.35 4.60

Minor Bihar 20.85 23.78 22.11 47.84 -1.26 -24.06

Chhattisgarh 45.19 22.44 54.74 44.76 -9.55 -22.32

Gujarat 26.16 14.68 23.86 14.17 2.30 0.51

Jharkhand 29.78 33.86 45.57 49.37 -15.79 -15.51

Maharashtra - - 65.05 4.22 - -

Odisha 8.35 63.33 33.58 56.57 -25.23 6.76

Punjab 18.11 19.37 20.93 7.40 -2.82 11.97

Uttarakhand 12.81 26.90 59.84 14.24 -47.03 12.66


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Table 11. Classification of states according to potential yield and yield gap in

rapeseed-mustard

Rapeseed - mustard

Gap High potential Low potential

State Potential Yield State Potential Yield

yield gap yield gap

(kg/ha) (%) (kg/ha) (%)

High gap - - - Bihar 1246 45

- - - Odisha 1096 57

- - - Jharkhandnd 979 49

- - - Chhattisgarh 1063 45

Low gap Rajasthan 1853 13 Uttar Pradesh 1170 18

Haryana 2233 10 Uttarakhand 853 14

Gujarat 1751 14 Maharashtra 664 4

Punjab 1621 7 - - -

Madhya 1881 5 - - -

Pradesh

Groundnut

It was observed from the results of FLDs data with improved production

technologies that there exists a wide yield gap in groundnut under real farm

situations across groundnut-growing regions of the country. Analysis based on

FLD data showed that the yield gap II was 19.74 per cent at the national level,ranging from 10.47 per cent in Tamil Nadu to 30.06 per cent in Gujarat. The

yield gap II was observed highest in Gujarat which accounts for the maximum

area under groundnut in the country. This may be due to the adoption of Bt-

cotton by the resource-endowed farmers of the state. At the national level, yield

Table 12. Yield gap in groundnut-growing states



Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II(%) (%) (%) (%) (%) (%)

Major Andhra Pradesh - - 50.32 19.10 - -

Gujarat 22.83 13.93 22.92 30.46 -0.09 -16.53

Karnataka 25.76 25.43 37.89 28.18 -12.13 -2.75

Tamil Nadu 3.08 25.55 22.32 10.47 -19.24 15.08

Minor Madhya Pradesh 7.64 33.08 - - 7.64 33.08

Maharashtra 7.94 25.56 48.81 17.17 -40.87 8.39

Rajasthan 4.23 19.04 14.81 14.92 -10.58 4.12


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gap II has decreased by about 5 per cent in one decade which does not seem to

be significant. Rajasthan and Tamil Nadu were identified as high-potential-

low-gap states, while Gujarat was recorded under the high-potential-high-gap-

states.

Soybean

As indicated earlier, yield gap analyses enables us to quantify the extent of

additional soybean production that could be obtained with complete adoption

of improved technology. Soybean yields vary considerably across states. The

highest yields were recorded in the state of Madhya Pradesh (2122.50 kg/ha)

and the lowest in Karnataka (1531.75 kg/ha). The yields in other states were

between 1600 kg/ha and 2100 kg/ha. There is a considerable difference in district

yields within a state. For example, in some districts of Madhya Pradesh and

Rajasthan district yields were much higher than 1000 kg/ha, whereas in some

districts the yields were between 450 kg/ha and 1000 kg/ha. In other states, the

differences across districts were smaller. By considering the yield gap II, it was

found that soybean productivity could be improved by 23.16 per cent at the

national level. Across the major soybean growing states, productivity level can

be improved from 24.56 per cent in Madhya Pradesh, 21.41 per cent in

Maharashtra and 19.12 per cent in Rajasthan. Results indicated that yield gap

II in the case of soybean is constant over time at the national level. This confirms

our results of previous section which indicated that area and not the yield was

mainly responsible for the growth in production of soybean. This calls for an

effective transfer mechanism of improved soybean production technology to

the growers so that yield reservoir could be harnessed. Table 15 indicates that

Andhra Pradesh, Maharashtra and Uttarakhand were classified under high-

potential-low-gap states, whereas Madhya Pradesh and Chhattisgarh were the

high-potential and high-gap showing states.

Table 13. Classification of states according to potential yield and yield gap in

groundnut

Groundnut



yield gap yield gap

(kg/ha) (%) (kg/ha) (%)

High gap Gujarat 2151 30 Karnataka 1677 28

Low gap Rajasthan 2377 15 Maharashtra 1712 17

Tamil Nadu 2209 10 Andhra Pradesh 1341 19


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Sunflower

Karnataka, Maharashtra and Andhra Pradesh are the major sunflower-

producing states that together occupy more than 80 per cent area as well as

production in the country. On the basis of FLD data, it was observed that there

existed a vast potential for increasing the existing level of production by adopting

improved technologies advocated for different agro-ecological situations. Yield

gap II in sunflower at the national level was observed as 25.62 per cent which

Table 15. Classification of states according to potential yield and yield gap in soybean

Soybean


State Potential Yield State Potential Yieldyield gap yield gap

(kg/ha) (%) (kg/ha) (%)

High gap Chhattisgarh 2122 33 Karnataka 1532 27

Madhya 1997 25 - - -

Pradesh

Low gap Andhra 1829 17 Rajasthan 1619 19

Pradesh

Maharastra 1850 21 - - -

Uttarakhand 1833 19 - - -

Table 14. Yield gap in soybean growing status

State Base year Current year % Increase over



(%) (%) (%) (%) (%) (%)

Major Madhya Pradesh 30.22 33.38 46.75 24.56 -16.53 8.82

Maharashtra 35.78 21.51 50.66 21.41 -14.88 0.10

Rajasthan 21.78 24.38 56.83 19.12 -35.05 5.26

Minor Andhra Pradesh 29.49 6.24 43.72 16.54 -14.23 -10.30

Chhattisgarh 30.62 36.26 22.82 33.36 7.80 2.90

Himachal Pradesh 37.75 35.81 - 37.75 35.81

Jharkhand - 29.65 - - 0.00 29.65

Karnataka 32.00 18.50 52.87 26.96 -20.87 -8.46Punjab 42.27 - - - 42.27 0.00

Tamil Nadu 41.20 17.38 - - 41.20 17.38

Uttarakhand 11.24 23.34 47.63 18.58 -36.39 4.76


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varied from 4.19 per cent in Maharashtra to 49.55 per cent in Chhattisgarh. On

the other hand, yield gap I in sunflower crop was 6.24 per cent at the national

level, ranging from 5.86 per cent in Karnataka to 46.90 per cent in Andhra

Pradesh. Karnataka and Tamil Nadu were identified in high-potential-high-

gap category, while Uttarakhand and Bihar states showed the high-potential-high-gap for the crop. With respect to decadal analysis in yield gap II, it was

noted that a significant increment was not achieved over the base year

(2000-01).

Table 17. Classification of states according to potential yield and yield gaps in

sunflower

Sunflower



yield gap yield gap

(kg/ha) (%) (kg/ha) (%)

High gap Uttarakhand 2157 26 Maharastra 1050 4

Bihar 1894 30 Andhra Pradesh 770 11

Low gap Karnataka 1506 18 Chhattishgarh 1114 562

Tamil Nadu 1459 21 West Bengal 1238 38

Table 16. Yield gap in sunflower-growing states



Gap-I Gap-II Gap-I Gap-II Gap-I Gap-II(%) (%) (%) (%) (%) (%)

Major Andhra Pradesh 16.37 46.90 11.43 -46.90 4.94

Karnataka 20.63 26.05 5.86 18.03 14.77 8.02

Maharashtra 24.87 25.70 15.87 4.19 9.00 21.51

Minor Bihar - 4.22 - 30.04 - -25.82

Chhattisgarh - 38.04 - 49.55 - -11.51

Odisha 28.86 28.82 - - 28.86 28.82

Punjab - 50.00 - - - 50.00West Bengal - - 25.78 38.37 -25.78 -38.37

Uttarakhand - - - 25.87 - -25.87

Tamil Nadu - 25.21 - 21.18 - 4.03


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Safflower

Maharashtra, Karnataka, Andhra Pradesh and Chhattisgarh are the major

safflower-producing states in the country. The productivity of safflower in the

country has witnessed three-fold increase during past three decades. However,

it is still very low compared to the yield of improved verities at research stations,as revealed by the FLD data conducted in different agro-ecological regions of

the country. The FLD data reveal that yield gap I was 36.68 per cent at the

national level which ranged from 21.29 per cent in Maharashtra to 48.74 per

cent in Madhya Pradesh. On the other hand, the yield gap II was recorded

35.01 per cent at the national level. Across the states, it was 26.74 per cent in

Karnataka to 43.72 per cent in Madhya Pradesh. In this case, Maharashtra was

classified as high-potential-low-gap state. No state was identified under high-

potential-high-gap category.

Table 18. Yield gap in safflower-growing states




(%) (%) (%) (%) (%) (%)

Major Chhattisgarh - 38.04 46.06 42.58 -46.06 -4.54

Karnataka 20.63 26.05 30.64 26.74 -10.01 -0.69

Madhya Pradesh - 48.74 43.72 -48.74 -43.72

Maharashtra 24.87 25.70 21.29 26.98 3.58 -1.28

Minor Andhra Pradesh - 16.37 - - 0.00 16.37

Bihar - 4.22 - - 0.00 4.22

Odisha 28.86 28.82 - - 28.86 28.82

Punjab - 50.00 - - 0.00 50.00

Tamil Nadu - 25.21 - - 0.00 25.21

Table 19. Classification of states according to potential yield and yield gaps in safflower

Safflower



yield gap yield gap

(kg/ha) (%) (kg/ha) (%)

High gap - - - Chhattisgarh 917 42

- - - Madhya 871 43

Pradesh

Low gap Maharashtra 1416 26 Karnataka 97 27


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Table 20. Yield gap in sesame-growing states




(%) (%) (%) (%) (%) (%)

Andhra Pradesh - 29.86 - - 0.00 29.86

Bihar 61.27 20.08 - - 61.27 20.08

Gujarat 37.97 20.61 - - 37.97 20.61

Kerala 7.36 58.28 8.59 56.80 -1.23 1.48

Madhya Pradesh 24.70 59.88 14.28 46.43 10.42 13.45

Maharashtra 39.38 33.76 24.89 43.18 14.49 -9.42

Odisha - 57.37 22.71 49.01 -22.71 8.36

Rajasthan 48.00 44.10 34.86 24.56 13.14 19.54

Tamil Nadu - 3.89 4.24 44.19 -4.24 -40.30

Uttar Pradesh 4.64 27.70 19.86 52.01 -15.22 -24.31

West Bengal 19.56 17.13 - - 19.56 17.13

Minor oilseeds

In respect of other minor oilseeds, viz. castor, sesame, niger and linseed, a similar

analysis was done. At the national level, yield gap II was recorded as 31.89 per

cent, 39.51 per cent, 52.35 per cent and 37.51 per cent for castor, sesame, niger,

and linseed, respectively (Table 28). In the case of sesame, the lowest yield gapII was observed in Rajasthan (24.56 %) and the highest was recorded in Kerala

(56.80 %). In castor, yield gap II ranging from 11.20 per cent in Andhra Pradesh

to 65.79 per cent in Chhattisgarh was observed. Across states, Niger crop showed

the yield gap II from 41.91 per cent in Uttar Pradesh to 57.14 per cent in Madhya

Pradesh. Linseed crop showed the gap II range from 19.31 per cent in Rajasthan

to 50.60 per cent in Uttar Pradesh.

Major oilseeds

In general, yield gap I has increased while yield gap II has decreased over timein major oilseed crop (Table 28). Increase in yield gap I indicates improvement

over the technology frontiers. An effort to bridge the yield gaps not only increases

the oilseed yield and production, but also improves the efficiency of land and

labour use, reduces production costs and increases sustainability. Various factors

cause exploitable yield gaps in oilseeds, such as physical, biological, socio-

economic and institutional constraints which can be effectively improved through

participatory research and government attention.


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Table 22. Yield gap in castor-growing states




(%) (%) (%) (%) (%) (%)

Andhra Pradesh 21.99 36.71 46.44 11.20 -14.72 25.5

Documents

Edible Oilseeds Supply and Demand Scenario in India