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Mahamad Rodzi Abdul Ghani




Mahamad Rodzi Abdul Ghani





Indian oilseeds processors call for development fu
8/12/2002 (Financial Express) - The oilseeds processing industry,represented by the Solvent Extractors' Association (SEA), has demandedcreation of Oilseed & Oil Development Fund on the lines of the existingSugar Development Fund for the sugar industry while also calling forlowering of import duty on oilseed imports to 15 per cent from 30 per centcurrently. The SEA has even sought plantation status for palmoil in the2003-04 budget.In its pre-budget memorandum submitted recently to the finance minister,the SEA has said that cash incentives should be paid to farmers to growoilseeds, while a moratorium be made available on edible oils import duty.Among other demands, SEA has said that the import duty on oilseeds bereduced to 15 per cent, exemption of excise duty on rice bran oilbyproducts like fatty acids, acid oil, wax and gum and on food-gradehexane. It has favoured exemption of vegetable oil and its byproducts froman uniform floor rate for sales taxes imposed by the states. The corpus ofthe proposed oilseeds and oils fund can be deployed as financial incentiveto growers of oilseeds and for grant of soft loans to the processingsector for technological upgradation of the oilseeds processors.The SEA president, Mr Bipin V Patel, while presenting his pre-Budgetmemorandum to the finance minister pointed out that the country iscompelled to import 45-50 lakh tonnes of edible oils every year at a costof Rs 10,000 crore. He suggested that the farmers should be given somefinancial incentives, apart from assured remunerative prices to growoilseeds. This can break the mono-cropping of wheat and rice and encouragecrop diversification. According to Mr Patel, this proposal needs to beimplemented in 2003-04 as the drought in 2002-03 has already affected theoilseed crops and the projected output is likely to be between 175 to 180lakh tonnes only. Mr Patel demanded a moratorium on the existing importduty structure for edible oils, as this will instill confidence in farmersand processors to increase output. He also suggested not to accept anysuggestion for duty difference between different segments of edible oilsector like vanaspati and refinery for import of crude palmoil. He saidthat different segments of vegetable oil industry have multiple linkageand differential treatment for one segment disturbs interlinked paritiesand gives room for malpractices for availing of preferential treatment andcreates unhealthy competition.Further, the SEA has sought lowering of import duty on oilseeds from 30 to15 per cent, while stringent quantitative restrictions be relaxed in linewith international practice of accepting phytosanitary certificate fromexporting countries as is done in Japan, China, Taiwan and Pakistan forimport of oilseeds. This would help the processing units to fully utilisetheir rated capacity, Mr Patel said.According to Mr Patel, the 16 per cent excise duty on byproducts ofricebran oil-like fatty acids, acid oil, wax and gum should be removed. Hesaid that there is no logic in imposing excise duty on the byproducts ofrice branoil when rice branoil itself is exempted from excise duty. Heassured that if this demand is complied with then the rice branoil outputwould go up from the present level of 175,000 tonnes to 400,000 tonnes intwo to three years. He also demanded removal of 32 per cent excise duty onfood grade hexane which is used by processors to extract vegetable oil.