Numbers don’t lie
As at Aug 26, Kharif oilseed planting for the 2016-17 season was 17.8 million ha, higher compared to 17.4 million ha last year and the previous year’s acreage of 17.2 million ha. Are growers losing interest in oilseeds? Far from true; the numbers do not lie.
Look at another set of numbers. Vegetable oil stocks at port and in pipeline are currently estimated to total over 1.6 million tonnes. According to the SEA, India’s monthly requirement of edible oil is 1.6 million tonnes which translates to total annual consumption demand of 19.2 million tonnes.
How the demand estimate is derived is anybody’s guess. The apex body, the Central Organisation for Oil Industry and Trade, has estimated domestic production in 2015-16 at 7.2 million tonnes, unchanged from the previous year.
In the light of the data, I find the representations for a steep hike in duty or for creating wider duty differential between unrefined and refined oils as somewhat amusing and a joke on consumers.
It is unclear what constitutes ‘excessive’ imports. One is not sure if the trade bodies have any benchmark for ‘normal’ and ‘excessive’ imports. Is there a cut-off point to decide if the import volume is normal? As public bodies, the associations owe us an explanation.
Again, there is nothing new in the demand of the trade bodies that seeks a hike in Customs duty on imports. They have been routinely complaining about excessive imports for many years; but who cares?
The associations want the government to raise import duty; and policy makers have, by and large, remained unmoved. It is possible that the government’s priorities are not in sync with trade demands; alternatively it may be that the trade has not been able to convince or make out a strong-enough justifiable case for a duty hike.
Absence of self-regulation
But I want to come from another angle. Why do these large national-level bodies (some proclaim themselves as premier associations) that claim to enjoy clout in the corridors of power (the claim is highly suspect, though) want the government to do everything or solve every problem of the trade and industry, including the so-called excessive imports? What have these bodies done to put their own house in order or ‘discipline’ their members?
Come to think of it, all vegetable oil importers – certainly the big boys and everyone knows who they are – are members of these associations. What has prevented the associations and their enlightened leadership from talking to these big boys and directing them to reduce imports ‘in order to save the Indian oilseed farmer’? One is not sure if the leadership of these trade bodies has thought of this step or even has the courage to propose such a move.
Indeed, I have reason to believe, senior officials in New Delhi pose the same question to the delegations of these associations seeking a duty hike. ‘What have you done as a trade association to reduce/regulate import or discipline your members?’
Clearly, in the concerned ministries in New Delhi, no important functionary is ready to take representations for a duty hike seriously. Sure, the officials will be polite to delegations that visit; but the outcome is something all of us know well.
