ISLAMABAD, Aug 22: The Pakistan Oilseeds Development Board has devised a national plan of action that envisages to raise the share of indigenous production in total consumption from 30 to 50 per cent over the next five years. The plan will cost around only Rs1 billion, but the return from the implementation will be worth Rs82 billion over the entire period, a reliable source told Dawn here on Friday.
Pakistan imported over 1,181,000 tons of palm oil and soyabean oil at a cost of nearly $580 million during 2002-03. This represented about 71 per cent of total consumption of edible oils in the country. Edible oils, therefore, thus emerge as the item with the second highest import bill after crude oil.
This, in spite of the fact that it had all the possibilities to fulfil most, if not all, of the requirements in terms of ecology, climate and willingness of the farmers to produce edible oilseeds. Moreover, these require far less water than other major crops.
Asked why self-sufficiency still eludes the country, the source said it was because the enabling environment “is missing”.
The government had set up in 1995-96 the PODB to reduce dependence on imports but it was a half-hearted move, he asserted. For the requisite policy support and resources were not provided to it.
Even the PODB Act, which would have instituted the Board as an autonomous body entrusted with the task of research, planning and coordination between diverse actors in the game of production, extraction and import, still awaits enactment.
It was passed by the Senate in mid-1990s but before the National Assembly could enact it, it was dissolved. The PODB has, therefore, continued to function on ad hoc basis under a resolution of the Federal Cabinet’s Coordination Commission (ECC) and used funds on the authority of the secretary, Ministry of Food, Agriculture and Livestock (MINFAL).
For want of legal cover, the PODB is also handicapped in other ways: Its personnel feel insecurity, because their service rules have not yet been enacted. Moreover, the Board is not allowed to replace the members of staff who are retired or leave their job for other reasons.
As regards its performance, the source said during the period that it had been in existence, the area under oilseeds, including canola and sunflower, had grown to 400,000 acres from only 84,000 acres in 1995. Besides, it has undertaken oilpalm project in Sindh as well as olive plantation in NWFP, Punjab and Balochistan.
Even with these handicaps, the source said, the PODB, for an expenditure of Rs409 million, delivered to the exchequer over Rs26 billion up to 2000-01.
One of the constraints to local production were the prices of palm oil in Malaysia. So long as these were low, the solvent industrialists, which have formed a powerful cartel, hedged on purchasing the oilseeds from “our own farmers on flimsy pretexts and/or offered very low prices”.
Over the past couple of years, however, the situation changed. The All Pakistan Solvent Extractors Association (APSEA) entered into contracts with big landlords for the purchase of locally produced oilseeds. What served as additional goad in this connection was the imposition of 20 per cent GST on imported edible oil.
Thus during 2002-03, the acreage under canola rose to 223,490 acres — 12 per cent more than the target. As against Rs630 and Rs650 per 40 kg for sunflower and canola, respectively, the prices actually being paid to the farmers ranged from Rs680 to Rs800 for canola.
Owing to heavy and widespread rains, ascendancy of palm oil prices and the realization of solvent industry that their future prosperity lies with locally produced oilseeds, the experts see bright prospects, particularly, for accelerated production of canola and sunflower.
With the sowing season of canola about to start in September, the PODB has decided to raise the target for area under canola to 250,000 acres for 2002-03. It may suggest that the APSEA, in its pre-sowing contracts with farmers, should agree to the minimum support price at Rs700 per 40 kg in the ensuing year.
Some snags are, however, expected to arise in this connection. For the association has proposed that as the government has subjected them to heavy taxation, the support price should also be determined by the government. There are no indications that the governments would be forthcoming on the matter, a market observer remarked.