EDITORIAL: The Ministry of Commerce’s plan to draft a comprehensive edible oil policy presents a pivotal opportunity for Pakistan to address its burgeoning dependence on imports, a glaring inconsistency for a country often described as agrarian.
Edible oil constitutes the largest share of Pakistan’s food import bill, a staggering USD 3 billion annually, fuelled by a demand that has more than doubled in the last two decades. In stark contrast, however, domestic production remains negligible, illustrating systemic policy failures.**
Pakistan’s reliance on imported edible oil, particularly palm oil, underscores a troubling neglect of local oilseed production.
The State Bank of Pakistan’s 2021 report on oilseeds aptly highlighted the absence of a consistently implemented oilseed policy as the root cause. This policy vacuum has led to a cascade of challenges: limited research, inadequate agricultural extension, inefficient marketing and procurement systems, and a fragmented value chain.
The lack of support prices for oilseeds further disincentivises farmers while inefficient oil extraction methods exacerbate the problem.
Competing demands for arable land and the dominance of staple crops leave little room for oilseed cultivation. Even when oilseeds are grown, their yields fall significantly short of potential due to suboptimal farming practices and limited access to specialised planting and harvesting machinery.
The situation is compounded by the lack of high-quality seeds suitable for local conditions. These systemic issues, rooted in policy neglect, must be addressed to reverse the tide.
Historically, Pakistan has struggled to establish robust institutional support for oilseed development. The dissolution of the Pakistan Edible Oil Corporation in 1979, followed by the erratic trajectory of the Pakistan Oilseed Development Board, reflects an inconsistent approach to this critical sector.
Although the board was restored in 2021 under a new rubric, its impact remains negligible, particularly after the passage of the 18th Amendment, which left provinces without oilseed-specific institutions or federal guidance.
A meaningful edible oil policy must prioritize domestic production of oilseeds such as sunflower, canola, and soybean. Unlike palm oil, which requires a minimum of 10 to 15 years to yield significant returns, these crops offer shorter-term solutions.
Punjab’s Oilseed Promotion Initiative and the federal government’s National Oilseed Enhancement Programme are commendable starts but require broader implementation across all provinces, with a focus on capacity-building for farmers. Subsidised seeds, support prices, and tax exemptions on oilseed processing could serve as immediate incentives.
Moreover, targeted R&D investments must address soil compatibility, seed quality, and climate resilience. Import and demand management measures can complement production incentives. Modest customs duties on imported edible oil and ghee could encourage local sourcing of sunflower and rapeseed.
However, such measures must be balanced carefully to avoid price shocks, particularly for low-income households. Public awareness campaigns on reducing edible oil consumption and promoting healthier alternatives should also be integrated into the policy framework.
In the long term, however, Pakistan cannot ignore the potential of oil palm and soybean cultivation. While the current outlook for domestic palm oil production is bleak, fresh technical surveys and pilot projects could lay the groundwork for future expansion. Collaboration with international experts, along with a strong institutional framework, will be essential to realising this potential.
Malaysia’s and Indonesia’s successful palm oil strategies offer valuable lessons for Pakistan, but the country must also acknowledge its unique agro-ecological challenges. Consistency and perseverance will be the linchpins of success.
The journey to self-reliance in edible oil will require sustained collaboration between federal and provincial governments, private sector stakeholders, and international partners. Short-term gains from sunflower and canola production must be paired with long-term planning for palm oil and soybean. Policymakers must resist the temptation to revert to complacency once the initial enthusiasm wanes.
While it is unrealistic to expect complete self-sufficiency in edible oil production, reducing the import bill by even a fraction would significantly ease Pakistan’s economic burden.
A comprehensive edible oil policy, if implemented with vision and resolve, could transform Pakistan’s agriculture sector, alleviate its trade deficit, and restore some measure of dignity to its status as an agrarian economy. This is a challenge that policymakers can no longer afford to ignore.
Copyright Business Recorder, 2024
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