Competitiveness and Efficiency in Groundnut Oil Sector of India uri icon

abstract

  • Groundnuts are a major source of edible oils in India.One of the central problems of groundnut production andprocessing sectors are huge inefficiencies due to uncertainproduction environment owing to rainfed cultivation,less resource base of smallholder farmers and processors,and low adoption rate of improved technology. Thispolicy brief addresses critical issues binding groundnutoil sector inefficiency and international competitiveness.With the widening gap between demand and supplyof edible oils in India, policy action is imperative notonly to arrest surging imports of edible oils but alsoto benefit both producers and consumers in terms ofbroader employment generation and decentralizedrural industrialization. Specific policy implications arehighlighted in this policy brief, which encompass a) theharnessing of improved varieties with attributes likedrought tolerance, high oil content, high productivityfor large scale seed multiplication/distribution by bothpublic and private agencies; b) viable village seed banksand seed networks through cycles of rabi (postrainy)season seed multiplication to meet the seed requirementsof kharif (rainy season) and vice versa; c) low-costtechnologies to increase profitability and reduce risk; d)oilseed clusters to facilitate scale economies and capacityutilization in processing units; and e) capital subsidies toaccelerate technological upgrading to shed inefficiency inthe processing sector. The expected gains in efficiency inboth production and processing of oilseeds are expectedto produce measurable producer and consumer benefits,which will justify proposed non-market distortedsubsidy for both seeds and technological upgrading in theprocessing sector

publication date

  • 2011
  • 2011