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THE OILSEEDS AND VEGETABLE OIL PROJECT
■KjSHB
I
AN OVERVIEW
-
J
>■
National Dairy Development Board, Anand
III Illi I
«
CONTENTS
Page Nos.
INTRODUCTION
1
BACKGROUND
1
STATUS OF THE PROJECT
3
ACHIEVEMENTS OF THE PROJECT
9
CONSTRAINTS IN THE IMPLEMENTATION
OF THE PROJECT
20
t
PROJECT PROGRESS -
JUNE 79 TO FEBRUARY 84
/DONATED \
'OIL RECEIVED
TAMILNADU
FEDN- 1
.
(MT)
(RS BO 1.149S2|
VrSO 32,30^
J SEED
^SUPPLIED,
(MT) 7
MEMBER!
OIL SEED
i AREA
/NO 0F>
l.
I FARMER
Mz*'—'■4 MEMBERS
9.50
'FUNDS
5
GENERATED.
■ RsINMILLIONj
MADHYA
\.
PRADESH
FEDN.
\
>
V'
a
/IMPROVED
*°86
ORISSA
'no of'<
J
FEDN.
SOCIETIES I
forme: /
\
'
flMPROVEt
SEED
lSDPPUED
'member^ (MT) ,
OIL SEED
, AREA /
\
f NO- OF N (HA)/
4/____ (farmer
f
^.MEMBERS.
(NO. OF
SOCIETIES 1
'
k FORMED/
GENI
PROCURE
MENT.
]
(MT)
7
<NC CF
FARMED
k' EMBER!
f NO CF\
SOCIETIES1
FORMED J
GUJARAT
FEDN J
PROCURE
WENT
[MT)
>
/improved
----------- J SEED
f-------- ySUPPLlED.
Member s^iilL
OILSEED j
1
z
k AREA /
/
/NO OF XjHAl/
/
JE- I FARMER j-" \
Uz
X” 'amembea/
\. Y
I
ANDHRA
PRADESH
TEDN.
fno of'
PROCURE
MENT
[MT )
SOCIETIE
FORME!
l
IMPROVED
SEED
^SUPPLIED,
MEMBERS'.
OIL SEED
AREA i
I
/ncofX
y , I FARMER
S
\MEL6ERS.
(NO. OF V ^/
SOCIETIES j
k ________ —
TOTAL
PROCURE
MENT
k (MT) A
PROCURE
WENT
(M-T)
^/procure
I MENT
\( MT )
LEGEND
FUNDS GENERATED THROUGH
SALE OF DONATED OIL(Rs in
Million)
—- FUND DISBURSED (Rs m Million)
----- PHYSICAL ACHIEVEMENT
- 1 INTRODUCTION :
The oilseed and vegetable oil sub-sector is of national concern. Oilseed
production in India is mainly concentrated in a few states, while vegetable oil
is the major cooking medium used by all sections of society, as well as the chief
source of fats and oils in the national diet.
At present, the per capita consumption
of fats and oils in the country is on an average approximately 17 gms daily, about
half the nutritional requirement.
One-third of the
country's inadequate supply of
fats and oils comes from milk - but it is recognised that milk-fat is relatively
expensive.
The remaining 11.5 gms per capita is from vegetable oils (1975
estimates).
Therefore, increase in consumption of fats and oils among the broad
majority must come from an increased availability of economically produced
vegetable oils.
To make this possible, not only must per capita supplies be increased, but also the
economy and efficiency of the oilseed and vegetable oil sub-sector must be
improved.
The improvements required, relate not only to the costs of production,
processing and marketing as such, but also to the stability whichi can be achieved,
by balancing supply and demand.
Speculation and hoarding, as well as the extreme
susceptibility of oilseed production to climatic variation all contribute to the
counter-productive instability.
Before the project was evolved, the bulk of the country's vegetable oil
production was derived from five major oilseeds, from which 2.5-2.8
million tonnes of oil were extracted annually. Groundnuts are by fqr
the most important of these oilseeds.
Some 1 .4 - 1 .6 million tonnes of
groundnut oil were produced annually.
Background for the evolution of the Project
The area cultivated under groundnut has increased slowly and steadily over the last
decade
while yields have shown an increasing trend also, but with sharp year-to-
year fluctuations.
The national average yields of groundnuts, for example, vary
from 724 kgs. per hectare in 1974-75 to950 kgs. per hectare in 1975-76.
These
national averages, moreover, concealed even sharper fluctuations experienced in
major production areas.
In Gujarat State, for example, the average groundnut
yield was 311 kgs. per hectare in 1974-75, compared with 1240 kgs. per hectare
inl975-76.
Such sharpfluctuations in yield reflect the vulnerability of groundnut production to
climatic variations - 90% of the nation's groundnuts are produced under rain-fed
conditions with no protective irrigation. Poor and/or late monsoon rains cause
widespread failure of the crop.
Most groundnut is grown on medium-to-poor quality
land without access to irrigation by canal or pump (sub-soil water being found only
at depths of around 100 mtrs. - and, even then being found to be brackish). In
such areas, total operated landholdings are believed to be higher on average than
in more fertile areas : operated holdings of 10-20 hectares are believed to be common
- 2 -
(even when land records show such holdings as being shared between several
individuals in a joint family). Periodic crop failure has left most oilseed
growers with almost no assets on which they can obtain credit. Yet, for example,
groundnut production calls for an investment of upto Rs. 2, 000 per hectare,
at least half of which has to be paid for in cash. This leaves the growers dependent
on local money-lenders, to whom they, in effect,mortgage their crop in order to
be able to obtain credit for seed, fertilizer, etc. Many money lenders also
engage in speculative purchase of crop and some own local crushing facilities.
Producers with large holdings also combine their oilseed production with money
lending, speculative purchase etc. This dominant group controls the marketing of
groundnut, so that the producer who depends on the traditional structure for credit
also has to accept whatever price he is offered for his crop, usually immediately
V
after harvest.
As this dominant group controls the market, it is able to ensure that prices fall
sharply during the harvest period. Any stocks remaining from the previous year's
harvest are crushed at that time, to ensure a drop in the price of oil which is
such as to convince the ordinary, small producer that he must accept a low price
for this year's crop. Having purchased the bulk of the crop, the dominant group
forces up the oil prices in order to recoup its investment; hence the extreme
instability of prices and supplies in the vegetable oil markets. Official controls
often tend to further exaggerate these pr’ce changes: the retail price of groundnut
oil, for example, sometimes rises in deficit areas to 2-3 times the price prevailing
in production areas.
The depressed and exploited state of the ordinary grower - and the hardship caused
to ordinary consumers who are largely dependent on vegetable oil as their cooking
medium - caused great concern to the Government of India when shortages
(believed to beartificial) forced up the price of groundnut oil by 49% in Bombay
over a period of twelve months during 1977. The Government of Gujarat
also became concerned when local prices of groundnut oil rose sharply , despite the
fact that the harvest was believed to have been good. The Government of India
and the Government of Gujarat consequently approached the Project Authority
responsible for Operation Flood (the country's largest dairy-development project)
with the suggestion that the techniques of co-operative organisation and marketing,
employed in Operation Flood, should be applied to the vegetable oil business as well.
The National Dairy Development Board, Anand, has since its inception, been
concerned at the effects on dairy development of the malfunctioning of the oilseed
and vegetable oil sub-sector.
Since the structure of the oilseeds and vegetable oil sub-sector has ramifications
which affect the entire population, a need was felt to restructure and modernise
it for implementation on a national basis.
- 3 -
STATUS :
At the instance of the Government of India, the National Dairy Development Board
prepared a project proposal in consultation with the, then. Member (Agriculture)
Planning Commission.
The proposal so prepared by NDDB and forwarded to the,
then. Member (Agriculture)
Planning Commission, was discussed at a meeting
held on 8-2-1978, and attended among others by the Members of the Ministry
of Agriculture, Ministry of Finance, Department of Cooperation and Planning
Commission and forwarded to the Government of India for approval.
The
Government of India conveyed its approval to the project inSeptember, 1978.
The project "Restructuring Edible Oils and Oilseed Productibn and
Marketing" is designed to integrate production, procurement, processing
and marketing of oilseeds and vegetable oil through a two-tier coopera
tive structure, consisting of oilseed producers' cooperative societies at the
ivillage level and an oilseed growers' cooperative federation at the State
level.
1 .
»
The major objectives of the project are:
To coordinate the modernisation of oilseeds production, oilseed processing and
the marketing of vegetable oils and oilseed by-products in areas covered by
the project.
2.
To this end -
To procure and market imported and indigenously produced vegetable oils,
in such a way as will contribute to the stabilisation of supplies and prices
at levels wh ich will be fair to consumers and growers.
3.
To increase the opportunities for productive and remunerative employment in
the selected major oilseed growing areas;
4.
To generate the funds required for the establishment of a modernised oilseed
and vegetable oil industry, baSed on oilseed growers' cooperatives, which
will put the functions of oilseeds processing and marketing into the producers'
own hands - and
5.
To devise and implement a programme of investment and development which
will enable growers to increase theironsew production and their returns from
oilseed production, while also increasing the efficiency of the processing and
marketing functions, through the growers’ own cooperatives.
The funds required for project investment are generated from the sale of
'edible oils donated by the
Cooperative League of the USA (CLUSA) and the
Cooperative Union of Canada (CUC). NDDB has entered into agreements with
CLUSA, as approved by the Government of India, under which it will receive
1,60,000 MT of refined soybean oil as donation from CLUSA. NDDB has already
received 1,14,952 MT of refined soybean oil from CLUSA against the agreement
signed with CLUSA in December, 1978. A memorandum of Understanding has
also been signed between the Government of Canada and the Government
-4 -
of India under which the Canadian International Development Agency (CIDA)
through the CUC will supply crude rapeseed oil worth Canadian $ 75 million
over the next four-year period, inclusive of the crude rapeseed oil worth
C$10 million already received. NDDB has, so far, received 32,909 MT of
crude rapeseed oil worth C $ 22 million against agreements signed with CUC,
each shipment consisting of C $ 3, 9 and lO million worth crude rapeseed oil
in March 1981, May 1982 and May 1983 respectively.
In the project document ’’Restructuring Edible Oil and Oilseed Production and
Marketing", it was indicated that 1978-79 would be the commencement of the
project, after a pre-project year of 1977-78. However, the actual implementation
could start only in July 1979 with the arrival of the first shipment of refined
soybean oil from CLUSA. The actual start-up year of the project, therefore, is
1979-80 (July to June).
The project implementation schedule was provided in table IV-1 of the project
document and was expected to begin in three districts in 1978-79 and in five
districts in 1979-80. The following table provides a brief comparison of the
actual coverage of the project from 1979-80 to 1983-84 as against the schedule
given in the project document.
State
Date of
Registration
Project
District*
Gujarat
June 1979
5
Madhya
Pradesh
October
1979
1
Revenue
District
BhaVnagar
Jamnagar
Junagadh
Amre I i
Mehsana
Banaskantha
Kheda
Indore
Ujjain
Dhar
De was
Shajapur
Crop
Covered
Groundnut
Groundnut
Mustard
Groundnut
Soybean
Ratlam
Tamil Nadu
v
Andhra
Pradesh
January
1981
1
September
1980
1
North Arcot
South Arcot
Chingleput
Prakasam
Guntur
Krishna
Khammam
Nalgonda
Mahboobnagar
Groundnut
Groundnut
-5 -
t State
Date of
Registration
Project
District*
Revenue
District
Crop
Covered
Orissa
May 1982
1
Puri
Ganjam
Cuttack
Groundnut
Rapeseed
Mustardl
Maharashtra
August ***
1983
1
Dhulia
Jalgaoni
Nasik
Aurangabad
1
Karnataka @
Bel lary
Bijapur
Dharwad
Gulbargai
Raichur
Groundnut
Groundnut
*
Project district is a contiguous area having 2z50,000 hectares under
oilseeds cultivation which need not necessarily confine to one
revenue district.
**
The Andhra Pradesh Cooperative Oilseeds Growers' Federation Limited
was registered in September 1980 but project implementation started
only in mid 1983.
***
Project implementation
@
The Karnataka Federation is expected to be registered soon.
to
start
As per the original project document, the NDDB Vegetable Oil Project was to
be extended only to the major groundnut growing states - viz, Gujarat,
Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka. Half of the
project investment was to be made in Gujarat and the remaining in other
participating states. Madhya Pradesh has since emerged as the major soybean
growing state in the country and when it expressed a keen interest in
implementing the project in the state, the Government of India approved the
inclusion of Madhya Pradesh under the project in August, 1979. The State
Government of Karnataka was initially not keen on implementing the project on
cooperative lines and did not accept the NDDB proposal. Therefore, with the
- 6 -
approval of theGovernment of India, it was decided in December, 1980 to include
Orissa instead of Karnataka as a participating state in the NDDB project. The
Government of Karnataka reconsidered its position and as approved by the Ministry
of Agriculture, it was decided in December 1982 to reinclude Karnataka in the
project.
The project, therefore, is now being implemented in the selected oilseed growing
areas of seven states instead of five as originally proposed. The implementation has
already begun in the states of Gujarat, Madhya Pradesh, Tamil Nadu, Andhra
Pradesh and Orissa. The implementation in Maharashtra is yet to begin as the State
Cooperative Oilseeds Growers' Federation has been registered only in August, 1983
The Karnataka Cooperative Oilseeds Growers' Federation is yet to be registered.
Of the eleven project districts to be covered under the project, five are in the
State of Gujarat, and one each in the states of Madhya Pradesh. Andhra Pradesh,
Tamil Nadu, Orissa, Maharashtra and Karnataka. The State level oilseed growers'
cooperative federation is the implementing agency of the project in each participating
state and is responsible for achieving the physical and financial targets set by them in
consultation with the State Government and reflected in their project documents.
NDDB/OVOW is responsible for providing funds for project implementation and also
generation offunds by sale of donated commodities and monitoring of the project.
The states of Maharashtra, Orissa and North Gujarat areas of the project are to be
funded from the sale of donated crude rapeseed oil received fromCUC. The project
implementation in the Saurashtra region of Gujarat, Madhya Pradesh, Tamil Nadu,
Andhra Pradesh and Karnataka are to be funded out of the sale proceeds of refined
soybean oil received from CLUSA.
I
The project envisages acquisition and renovation of the existing as well as the
establishment of new oilseed processing facilities to be owned and operated by the
oilseeds growers cooperative federations. A total oilseed crushing capacity of
15.46 lakh MT and solvent extraction capacity of 6.96 lakh MT is to be established
under the project. It was estimated that a build up of such oilseed processing
facilities will be adequate to enable handling of the volume of the oilseeds procured
by the oilseed growers cooperative societies created under the project by the end of
the project period.
The Government of India, while conveying its approval to the project called
NDDB to devise and implement a programme of investment and development which
will enable the growers to increase oilseed production and their returns from oilseed
production, while also increasing the efficiency of the processing and marketing
functions through the growers’own cooperatives. In the original project document,
the production enhancement strategy called for the setting up of a District Farm 6f
about 300-400 hectares in each district covered under the project and three Area
Agronomic Centres of about 500 hectares each. Land for the Area Agronomic Centre
and District Farm is to be provided free of cost by the participating state governments.
Multiplication of breeder seeds into foundation seeds and localised research is to be
carried out at the Area Agronomic Centres. At the District Farms, multiplication
-7 -
of foundation seeds produced at the Area Agronomic Centres into certified truthfully
labelled seeds and extension and training of farmers and federation personnel are
to be undertaken. However, the required land for setting up the Area Agronomic
Centre has not been made available by most of the participating state governments.
With regard to the land for the setting up of district farms in Gujarat, the state
government has handed over to the Gujarat Cooperative Oilseeds Growers’
Federation (GROFED) a part of the Talaja Farm of about 18 hectares in Bhavnagar
district. In Madhya Pradesh also, the state government has made available to the
Madhya Pradesh State Cooperative Oilseeds Growers' Federation (OILFED), the
Amlaha Farm of about 68.69 hectares in Sehore district. The land area of these
farms is far less than the actual requirement and therefore, inadequate to carry out
the proposed activities. The federation also undertakes the activities of
distribution of technical inputs and agricultural implements and procures oilseeds
through village level oilseeds growers' cooperatives. The mobile teams organise
village level societies and coordinate and arrange for procurement and movement
of oilseeds from village societies.
The project is managed by the Oilseeds and Vegetable Oil Wing (OVOW) of the NDDB
which is responsible for promoting and monitoring the project in various participating
states. OVOW managed by a Management Committee which has the powers of the
Executive Committee of the NDDB, takes policy decisions regarding project managemer
implementation and related matters.
The funds required for project investment are generated from the sale of edible oils
donated by the Cooperative League of the USA (CLUSA) and the Cooperative Union
of Canada (CUC). As mentioned earlier, out of the total 1,60,000 MT of refined
soybean oil donated by CLUSA, to date, 1,1^,952 MT of refined soybean oil has been
received. NDDB/OVOW has also received 32/909MT of crude rapeseed oil worth
C $22 millions against the various agreements signed with CUC. By the sale of
donated vegetable oils it was originally estimated that a sum of Rs. 1500 millions will
be generated and be invested over the seven year project period on the various
activities of the project.
The Government of India while conveying their approval to the project formed a
committee under the Chairmanship of Secretary (Agriculture) with Secretary
(Civil Supplies and Co-operation), Government of India and Chairman, NDDB,
as its members to sort out any operational problems arising in the context of the
implementation of the project. The committee has so far met four times and
various issues and problems encountered in the way of the smooth implementation
of the project have been discussed.
Targets, both physical and financial, for each state are not specified in the original
project document. After the State Government agrees for the extension of the
project in selected oilseed growing areas in the state and creates a cooperative
federation of oilseeds growers, project implementation plans are prepared.
- 8 -
The implementation plans for Gujarat, Madhya Pradesh, Tamil Nadu, Orissa, Andhra
Pradesh, Maharashtra and Karnataka have been prepared-
The project has so far been evaluated twice, once in March-April, 1981 and then
in May-June, 1983. The first evaluation was carried out by a CLUSA/USAID
Project Assessment Team. In their report the team appreciated the efforts, undertaken
by NDDB and recommended the continued support from donor agencies to the project.
The report of the first evaluation mission was reviewed by the Government of India
both in the Ministry of Agrtculture and the Planning Commission. The second
evaluation as provided in the originally approved project document was a mid-term
evaluation of the project conducted by a joint evaluation team consisting of
representatives from the USAID, CLUSA, GOI and NDDB. The report provides
a review of the progress achieved under the project and suggests improvements for
effective implementation of the project.
f
- 9 -
ACHIEVEMENTS :
In a short period of time, the project has demonstrated that it is possible to procure
the farmers' produce from their doorstep while also making available to them technical
inputs for oilseeds production enhancement. The infrastructure created under the
project , which no doubt needs to be developed and strengthened further, has proved
effective. The processing and marketing activities have helped create an impact
where prices of oilseeds paid to the farmers are by and large governed by the prices
decided by the Federations. It has certainly happened in the case of Gujarat and
Madhya Pradesh and in other States as well to a certain extent. In recognition of
this fact, the centrally sponsored oilseed production enhancement programmes in the
States of Gujarat and Madhya Pradesh are being implemented in close coordination
with the State level oilseeds growers' federations.
COVERAGE OF THE PROJECT - SOCIETIES
UP TO FEB -1511
1500-
1333
1250 1110
ACHIEVEMENT
1000 in
w
w
o
o
m
u.
o
b
z
750-
539
500-
250-
76
0
1979-80
T
1981-82
1980-81
1982-83
1983-84
YEAR (July-June)
Targets not specified in the project
document
f
In terms of accomplishments attained under the project till February 29, 1984, 1511
village level oilseed growers cooperative societies have been organised in 4956 villages
with a total membership of 1,22,260 grower members bringing about 377,000
hectares of oilseed cultivation area under the project. The project has made considerable
- 10 -
progress towards the acquisition/creation of oilseed processing facilities, supply of
technical inputs and production enhancement and marketing activities in the
project areas.
COVERAGE OF THE PROJECT - VILLAGES
TARGET
5600
5 550
UP TO
FEBA956
ACHIEVEMENT
<n
Id
o
4000-
3800
<
3747
—I
O
o
z
2438
2400-
2200
1042
850
800 -
150
0
236
{\W\1
1979-80
1962^3
1980-81
1981-8:
YEAR(July-June)
COVERAGE OF THE PROJECT - FARMER MEMBERS
180000 -
177000
TARGET
150000-
ACHIEVEMENT
UPTO
FEB 122260
a
Ld
CO
1,0000
S
Id
Z
100245
100000-
£
cr
<
76^85
O
d
57000
50000-
20000.
0
r
4000
1979-80
20140
2717
1980 - 81
1981-82
YEAR (July-June)
1982-83
1983-84
-11 -
The crushing facilities under the processing capacities have generally been in excess
of the targets set upto 1981-82. The targets set for the solvent extraction capacity
has also been largely met. The project document did not specify the targets for
oilseed storage capacity, packaging, vanaspati manufacturing and oil refining
facilities.
While comparing tne targets set for oilseed procurement,as given in the original project
document with the actual achievements, it is observed that oilseed procurement has
generally been less than the targets set. This is mainly due to the late start-up of
the project in the various participating states and adverse climatic factors affecting
oilseed production in the areas covered under the project. In view of the fluctuating
nature of oilseed production in rain-fed conditions, major emphasis is being given on
stabilising oilseed production by adopting a bold procurement strategy, providing price
support and by making efforts for the marketing of summer groundnuts.
COVERAGE OF THE PROJECT- OILSEEDS PROCURED
750-
730 0
] TARGET
ACHIEVEMENT
o
o
500-
436 0
z
Ijj
2
Ld
a.
o
o
cr
300-
Q.
216 0
93 14
10073 0
14 0
O'
1979-80
54 8
UP TO
FEB 58 24
25 72
3 80
1980-81
1981-82
1982-83
1983-84
YEAR (July-June)
t
The funds required for project investment are to be generated from the sale of edible
oils donated by the Cooperative League of the USA and the Cooperative Union of Canada.
- 12 -
Out of the total, 1,60,000 MT of refined soybean oil to be donated by CLUSA,
to date, 1,14,952 MT have been received.
NDDB has also received crude
rapeseed oil worth C $ 22 millions.
COMMODITY
RECEIPTS AND SALES-CRUDE RAPESEED OIL
90
90-
90
90
90
TARGET
RECEIPT
ACTUAL
RECEIPT
SALES
60
2
o
o
50-
z
o
jiST^UP TO
32 91
/FEBRUARY
rtjrt
25-
g
15 54
0
Illi Nil
Nil
Nil
1979-81
1979-80
I
1-50
1979-82
o1
«
1979-84
1979-83
YEAR (July-June)
COMMODITY RECEIPTS AND SALES - REFINED SOYBEAN
140 -
■
TARGET RECEIPT
OIL
130
130
ACTUAL RECEIPT
120-
SALES
107 50
100-
2
o
o
83 06
82 67
II
77 50
80-
65 85
2
<
Z)
O
60-
40-
55 88
40
I
20-
0
1979-80
1979-81
1979-82
YEAR (July-June)
1979-83
1979-84
- 13 -
The generation of funds from the sale of donated vegetable oils was calculated on
the basis of Rs. 6000/- per MT which included Rs. 5500/- per MT as the landed
value plus Rs. 500/- per MT as the Indian Contribution to the project.
GENERATION OF FUNDS THROUGH SALE OF
DONATED
OIL
1200*1168 65 UP TO FEB
*000 00
z
o
1050-
Tijjrniijjri
BO
*TOTAL GENERATION
900-
TTII|llll[|
000-00
III IlliII
FUNDS THROUGH RSO
750-
n
*868 86
FUNDS THROUGH CRO
-J
J
Z
600-
*563 48
in
LU
LU
CL
Z)
(X
•10-66
*485 67
450-
300-
150-
0
925 57
0
741 37
*269 07
552 82
0
485 67
269 07
1979-80
1979-81
1979-82
1979-83
1979-84
YEAR (July-June)
As the funds generated have been in excess of Rs. 6000/- per MT it is expected that fund
generation and investment will be about Rs. 250 crores as against Rs. 150 crores as
stated in the project document.
In case of Gujarat and Madhya Pradesh, the project has been operational since mid
1979 and large areas under oilseeds cultivation have been brought under the
cooperative ambit. The project is well under progress in the remaining states also.
The federations have been undertaking extensive production enhancement activities
by supplying technical inputs and agricultural implements to the farmers-
- 14 -
The main objective of the NDDB Vegetable Oil Project is to provide
remunerative prices to the oilseed growers as prices play a key role
in acreage allocation decisions of the farmerso
The farm prices of
groundnut have almost doubled in the project period as compared to the
Though the commercial procurement operations of
rapeseed-mustard by GCOGF have started only this year, the prices have
pre-project period.
not come down despite the fact that rapeseed-mustard production is
expected to increase to about 3.5 lakh MT this year, compared to
2.1 lakh MT last year. Only a few years ago it was hardly 50,000 MTW
The impact of remunerative prices can also be seen from the fact that groundnut
acreages in Gujarat which had remained around 16.7 lakh hectares from 1974-75
to 1976-77 on an average, increased to about 21 lakh hectares in the period
1979-80 to 1982-83o And this year also they are on the same level or higher.
In the States of Andhra Pradesh, Tamil Nadu, Karnataka etc. seasonwise and
districtwise groundnut acreages have been found to fluctuate between 20 to 40
per cent as compared to which such variations in Gujarat are hardly 12 per
cent in recent years. It is hoped that these fluctuations will reduce with the
implementation of the project in these States.
In Gujarat especially^ the remunerative prices have not only helped in acreage
stabilisation but also encouraged the farmers to invest more in modern inputs and
services which have ultimately raised and stabilised yields of groundnut in Gujarato
This can be seen from the fact that groundnut yield which used to fall as low as
200 to 300 kg/hectare in the past has never gone below 450 kgs in the past 5 years.
<
- 15 This can be seen from the fact that groundnut yield which used to fall as low as
200 to 300 kg/hectare in the past has never gone below 450 kgs in the past 5 years.
These acreages and yield stabilisation have raised the annual production level upto
17-18 lakh MT as compared to 15 lakh MT previously. Rapeseed-mustard yield in
Gujarat is expected to be around 1500 kg/hectare this yearas compared to the
al I-India average of about 600 kg/hectare.
Between 1974-75 and 1981-82 the proportionate share of project States namely
Gujarat, Andhra Pradesh, Tamil Nadu and Orissa in the al I—India production of
groundnut increased from 60% to 70%,
while the contribution of the non-project
states declined from 40% to 30%.
In case of Madhya Pradesh where attempts to encourage soybean cultivation had
failed in the early 1970's,
soybean acreages and production have tended to rise
significantly since the commencement of the NDDB project in Madhya Pradesh.
A large number of econometric models estimated to explain temporal/spatial price
variations lend considerable empirical support to the statement that it is the NDDB
project which has helped to avert the price depressing situation at the beginning of
the harvest season, thus helping the farmers to realise remunerative prices for their
crop. The higher prices at the beginning of the season have thus helped to control the
explosive off-season price rises.
The coefficient of variations of monthly groundnut
oil prices which generally used to remain often between 10% to 19% in the past and
sometimes to os high as 38% has remained below 10% in the last four years except
in 1981-82 when it was 14%.
The achievement of the objective of price stabilisation is remarkable since the technoeconomic feasibility of the NDDB project envisaged a control over 15% of the available
supplies to keep edible oil price movements within reasonable limits. It was also
envisaged that under the project, edible oil would be imported on commercial basis
in the initial period but would become
considerably low when the edible oil imports
were removed from the OGL list, subsequently.
The success of the project depends not only on the achievements in the direction of
extension or production of oilseed but also on how much procurement is made and at
what price. From this angle, the APC recommended prices would not be meaningful
as they are always lower than the market prices.
In order to solve this critical problem
attempts are being made to forecast prices through econometric models in such a manner
that on the one hand they help procure sufficient quantities and on the other hand help
avoid the situation which could jeopardise the existence of the project itself.
<
The statewise achievements of the project are highlighted below :
Gujarat :
The GujarafCooperative Oilseeds Growers' Federation Limited (GROFED) was set up
- 16 -
in June 1979 as the project implementing agency in Gujarat,
NDDB has so far
supplied 51,470 MT of refined soybean oil to GROFED for marketing in the State.
The organisation of village level societies is being done through mobile teams who
motivate farmers through village level meetings, film shows, visits to Anand, where
they have an opportunity to see a good cooperative working and also undertake
extension activities, following the "training and visit system" using demonstration
plots in the villages. At the year end, 35 mobile teams deployed by Area offices
were working in the project areas of Bhavnagar, Jamnagar, Jun<agadh, Amreli, Kheda
and Mehsana districts and had organised 1017 village societies in 1338 villages with a
total membership of 77,036 farmers.
As many as 6640 village meetings and 225 film shows were organised during the year
to educate farmers on cooperatives and improved methods of groundnut cultivation.
527 farmers were trained under the Farmers InductionProgramme at Anand apart from
8797 who were trained locally by the Federation.
An 18 hectare farm at Talaja for multiplying foundation seeds for distribution to farmers
was made available to the federation by the Government of Gujarati Grower members
also have equal access to technical inputs required to improve groundnut production.
During the current agricultural year (1983-84), 2921.756 MT of improved seeds,
1373.201 kgs. of seed treatment chemicals, 26,673.58 litres of insecticides along with
5994.57 MT fertilizers were distributed to grower members. In the current procurement
season starting from October 1983, 28,606.06 MT groundnut were procured at an
average price of Rs. 4921 per MT.
The project envisages acquisition and renovation of the existing as well as the
establishment of new oilseed processing facilities to be owned and operated by the
oilseed growers' cooperative federations.
In Gujarat, the project has been operating the Bhavnagar Vegetable Products Unit,
Bhavnagar, which has facilities for groundnut crushing, solvent extraction, refining,
cottonseed crushing and vanaspati unit, besides facilities for tin manufacturing, HPS
sorting etc.
This unit will be eventually owned and operated by the Gujarat
Cooperative Oilseeds Growers' Federation.
The Federation has also purchased an oilseed processing unit at Jamnagar and a 50 MT/day
capacity groundnut crushing mill at Dhasa in Bhavnagar district. The current phase of
the renovation of Jamnagar plant continues. The federation has also obtained letters
of intent for setting up a 400 MT/day groundnut processing complex at Junagadh and a
200 MT /day mustard/rapeseed processing complex at Jagudan in Mehsana district and a
100 MT/day vanaspati plant.
Sites for the proposed plant/ at Junagadh and Jagudan
have been acquired,orders for key equipment placed and the construction work has
<
a*so commenced.
NDDB/CVOW is also financing through GCOGF the setting up of 100 MT/day cottonseed
processing complex at Rajkot (commissioned) and Idar (to be commissioned) and the expansion
to 150 MT/day of the existing cottonseed complex at Anand (commissioned).
- 17 -
A soybean preparatory section has also been financed at the ATCO, Anand plant.
These three organisations are owned by local cooperatives.
Madhya Pradesh :
The Madhya Pradesh Cooperative Oilseeds Growers' Federation Ltd.(Oil Fed) was formed in
October 1979 to implement the NDDB oilseeds project in Madhya Pradesh.
Subsequently,
the Government of Madhya Pradesh decided to make this federation the implementing
agency for all oilseed development activities in the cooperative sector. The federation
is also implementing the NCDC financed project in Madhya Pradesh, involving the
setting up of four soybean processing plants in various parts of the state. It has been
decided that for the NDDB assisted part of the project, a Regional Union would be
formed and all assistance would be routed through the union which in turn will be a'
member of the federation.
The regional union was recently registered and its area of
operation would spread over the Malwa region of Madhya Pradesh. NDDB has so far
supplied about 23,812 MT of refined soybean oil to the federation for marketing in the
state.
244 societies with a total membership of 26,901 growers have been formed in 2345
villages. Members have a total cultivable land area of 1,72,448 hectares of which
78,942 hectares are under oilseeds.
Five mobile teams are operating in the project
area. During the 1983-84 current kharif season, 927 demonstration plots were set up
and 961 MT improved seeds, 1536 kgs of seed treatment chemicals, 496 MT fertilizers,
about 3197 kgs of various insecticides, 59 kgs of various fungicides and 23,044 packets
of rhizobium culture have been distributed to members through the federations' technical
inputs programme.
614 farmers were trained under the Farmers Induction Programme
at Anand and 5512 locally by the federation. To date, 1416 village meetings and 9
film shows were organised as a part of the extension education activities. The 69
hectares Amlaha farm was used for training purposes and to multiply foundation seeds
for distribution to members.
In the current procurement season from October 1983 , 27,809 MT soybean was produced
at an average price of Rs. 3234 per MT.
These oilseeds were processed at the plants of M/s Anand Taluka Cooperative Cotton
Sale Ginning and Pressing Society Limited, Anand (ATCO) on a custom hiring basis. The
federation is setting up a soybean processing plant of 400 MT/day in Ujjain for which
90 acres of land have been acquired.
This plant is being constructed by NDDB with the
assistance of the federation's technical staff. Orders for key equipment have been placed
and construction work has commenced. For the solvent extraction plant, a global tender
has been issued and the order is expected to be placed in the near future.
The plant
is expected to be one of the largest soybean complexes in the country.
An area of about 66.8 hectares has been made available to the Madhya Pradesh Oil
Federation by the Government of Madhya Pradesh for setting up an Area Agronomic
Centre and a feasibility study and hydrological survey are being conducted.
- 18 -
Tamil Nadu :
The Tamil Nadu Cooperative Oilseeds Growers* Federation Ltd.(TANCOF) formed in Januc
1981 to implement the project in the State, is currently being implemented in the
groundnut growing belt of North Arcot, South Arcot and Chingleput districts, having
some 2,50,000 hectares under oilseed cultivation, NDDB has so far supplied 4523 MT
of refined soybean oil to TANCOF for marketing in the State. A sum of Rs. 12 crores
will be made available to TANCOF over the seven year project period (1981-88)
To date, the federation has organised 146 cooperative societies in 542 villages with
11,109 members in 2 districts and 382 demonstrations were conducted in the current
season. Under the technical inputs programme, 1 i3.6 MT seeds, 24.5 kgs seed
treatment chemicals, 318 MT gypsum and 7300.35 litres of insecticides were distributed
to members. The 1 ’, 109 members of this federation have a total cultivated land area
of 35,483 hectares of which 27,597 hectares are used for oilseed cultivation. A total
of 645 village meetings and 18 film shows were held by the four mobile teams and
field staff, 269 farmers were trained under the FIP at Anand and another 529 locally
by the Federation. In the current procurement season, starting from October 1983,
the federation procured 1200.423 MT groundnut from members at an average price
of Rs. 4682 per MT.
The federation is considering the acquisition of processing plant(s) from the Tamil Nadu
Cooperative Marketing Federation in the project areas and is also studying the
possibility of setting up new facilities.
Orissa :
The Orissa State Cooperative Oilseeds Growers* Federation Ltd (OIL ORISSA) was
registered in May 1982 and the project is currently operational in the districts of
Cuttack, Puri and Ganjam. To date, 44 societies have been formed covering 267
villages with 2267 members with a total cultivable area of 5171 ha of which 3126 ha
are under oilseeds. Four mobile teams are operational in the three districts where
work is under progress. To date, .196 village meetings were conducted in the
project areaT 186 farmers were sent to Anand under the Farmers Induction Programme
and 246 demonstrations were organised during the current kharif season. Under the
technical inputs, 248.202 MT improved seeds, 163.6 kgs seed treatment chemicals,
930.312 MT of various fertilizers were distributed to the members.
Following disastrous floods in September 1982, the efforts of the Federation were
mostly geared towards the initial procurement of seeds from the GCOGF for
distribution to farmers in the project area. Out of the 900 MT purchased
from GCOGF,.829 MT were distributed to farmers of which, members received
some 26 MT seeds to plant in their own fields. In the present procurement season
starting from October 1983, the federation has procured 139.45 MT of groundnut at
an average price of Rs. 3945 per MT. Marketing of refined soybean oil was
initiated in the state in October 1982 and so far 2333 MT have been sold.
As a part of their activities. Oil Orissa conducted a training programme at Bhubaneswar
for the Secretaries of Oilseed Growers' Cooperative Societies.
- 19 -
The federation has selected a site at Khurda for its proposed central 50 MT/day
groundnut processing plant, expandable to 200 MT/day in a phased manner.
Orders for key plant equipment are being placed and civil work has started.
Since the commissioning of this central processing plant is expected to be
delayed, the federation has now proposed to set up a 30 TPD capacity plant at
Mancheswar at an estimated cost of Rs. 9 lakhs. An oil packaging station at
Bhubaneswar has been commissioned. A coconut project estimated at a cost of
Rs. 1 crore has been approved and its project report is under preparation.
An area of about 80 hectares has been made available to Oil Orissa by the Government
of Orissa for setting up an Area Agronomic Centre.
Andhra Pradesh :
In September 1980, the Andhra Pradesh Cooperative Oilseeds Growers' Federation
Ltd.(APCOGF) was registered.
However, project implementation in the state was not
initiated as the project area proposed by the State Government was not a contiguous
oilseed growing area and was much in excess of the 2.5 lakh hectares. Moreover,
the bye-laws of the society and the federation were not in line with the model
bye-laws recommended by NDDB. Actual project implementation started only
in mid-1983. The area of operation of APCOGF will consist of oilseed growing
areas in the districts of Prakasam, Guntur, Krishna, Khammam, Nalgonda, and
Mahboobnagar.
To date, 1990 MT refined soybean oil have been supplied by NDDB for marketing
in the State. At present, the Federation is concentrating its activities in
Mahboobnagar, Khammam and Nalgonda. Seven mobile teams are operational as
on date.
63 village societies have been formed covering 464 villages with
4947 members with a total cultivable area of 30,294 hectares.
237 village meetings
and 6 film shows were organised as a part of the extension education activities.
96 farmers were trained under the farmers' induction programme at Anand.
During the current year(1983-84) so far 30.96 MT improved seed and 505 MT of
gypsum were distributed to members.
486.456 MT of groundnut were procured to
date at an average price of Rs. 4348/MT.
Maharashtra :
The Maharashtra State Cooperative Oilseeds Growers' Federation Limited was formed in
August 1983 as the project implementing agency in the State of Maharashtra
The contiguous area selected by the federation for the project implementation,
comprises the districts of Jalgaon, Dhulia, Nasik and Aurangabad. The cooperative
organisation and other activities are expected to be initiated by the Federation.
Karnataka :
The Government of Karnataka has agreed in principle to implement the NDDB's
Vegetable Oil Project in the State. The spade work regarding the planning and
associated formalities are underway.
Constraints in the iwipiemeniot'O
-Tihe *
The Oilseeds and Vegetable Oil Project of the NDDB has completed just about four
and o half years since its inception. The project as originally conceived was for
a duration of seven years after a pre-project year of 1977-78. However, the
actual project implementation could start only in 1979-80.
The project envisages
a duration of a minimum of seven years for each participating state to realise the
impact of the project.
It was originally envisaged to extend the coverage of the project to five states of
Gujarat, Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka.
In August
1979, at the instance of the Government of Madhya Pradesh, the Government of
India approved the inclusion of a selected area in the Western part of Madhya
Pradesh bringing Madhya Pradesh also into the ambit of the project.
The reluctance on the part of the Government of Karnataka to accept the NDDB
proposal for implementing the project on cooperative lines, favoured the inclusion
of Orissa instead of Karnataka, as a participating state of the project, at the
instance of the Government of India. Subsequently, the Government of
Karnataka reconsidered its position and as approved by the Ministry of Agriculture,
it was decided in December 1982 to reinclude Karnataka in the project.
Implementation in the states of Gujarat, Madhya Pradesh, Tamil Nadu and Orissa startec
soon after the respective state federations were registered. Though, the Andhra Pradesh
Cooperative Oilseeds Growers' Federation was registered in September 1980, the actual
implementation began only in mid 1983, while the implementation in Maharashtra is
under initiation and the Cooperative Oilseeds Growers' Federation in Karnataka is yet
to be registered.
Due to the late commencement of the project in some of the participating States,
unless the duration of the project is not extended, each participating State may
not have a minimum of seven years of project operation as originally planned.
Moreover, in any agricultural development programme, it takes a long time before
the impact can be measured.
say
It would, therefore, be pre-mature at this stage to
whether the objectives of the project have been fully met.
Nevertheless, the project faces a number of threats and challenges from vested
interests who are opposed to farmers commanding a share of oilseed production,
procurement, processing and marketing business.
The project has, so far, made
good progress despite obstacles such as fires in plants etc.
Some of the major constraints faced during the implementation of the project are
highlighted below
1 .
:
Some ofthe provisions of the state c<:ooperative acts also come in conflict with
the
the model
model bye-laws
bye-laws prepared
prepared to
to ensure formation of cooperative societies
owned and commanded by oilseed growers' themselves and insulating them
from outside elements. The concerned State Governments have now generally
accepted the recommendations of the NDDB. This is also true in the case of the
bye-laws of the federations.
- 21 -
2.
The project has also faced difficulties in obtaining licenses for setting up
processing facilities.
NDDB has pleaded with both the Central and the
participating State Governments not to allow the setting up of new or
expansion of the existing oilseed processing facilities in the areas covered
under the project. A policy decision is required to be taken in this regard.
In case
of licensing of new vanaspati plants, a policy decision to allow creation of
further capacities only with the grower cooperatives and public sector units
has already been taken.
3.
The oilseed procurement has generally been less than the targets set, mainly
due to the late implementation of the project in participating states and
adverse climatic factors affecting oilseed production in the areas covered
under the project.
Due to the fluctuating nature of oilseed production in
rainfed conditions, major emphasis has been given to the stabilisation of
oilseed production by adopting a bold procurement strategy, providing price
support and by making efforts for the marketing of summer groundnuts.
4.
Disbursement/utilisation of funds as compared to the targets has been on the
lower side for the seven action items except the sinking fund.
The main
reason for this has been the USAID insistence of their rights to audit project
expenditure and performance.
sorted out.
5.
The audit and related issues have since been
With regard to allocation of quota for HPS groindnut exports, till date, export
quota has not been alloted to the federations.
channelised through NAFED.
HPS groundnut export has been
Only in 1982 agencies other than NAFED have
been allowed to export HPS groundnuts.
Unfortunately, the groundnut crop
suffered both in quantity and quality, due to bad weather.
Therefore, HPS groundr,-
activity could not be organised.
6.
The production enhancement strategy of the project calls for the setting up of
a District Farm of about 300-400 hectares in each district covered under the
project and three Area Agronomic Centres of about 500 hectares each.
Land
for the Area Agronomic Centres and District Farms is to be provided free of
cost by the participating State Governments for undertaking multiplication of
breeder seeds into foundation seeds, localised research at the Area Agronomic
Centre, extension and training of farmers and federation personnel. However,
the required land has not been made available by most of the participating
State Governments. The State Governments of Gujarat and Madhya Pradesh
have handed over to GROFED and Madhya Pradesh Oil Federation a part of the
Talaja Farm of about 18 hectares in Bhavnagar district and the Amlaha Farm
of about 68.69 hectares in Sehore district. The land area of these farms is far
less than the actual requirement and therefore, inadequate to carry out the
proposed activities. The delay on the part of the State Governments to provide
the required land has posed a constraint to the seed multiplication activity in
particular , and other inputs and extension activities in general.
'pei/ is'o
- 22 As desired by Secretary (Agriculture andCooperationja letter has been drafted
requesting participating State Governments to issue suitable instructions to the
Concerned Departments/Universities to make available land by transfer or on a
A suitable action is required to be taken by the Ministry of
long lease basis.
Agriculture in this regard.
7.
There is no parity at present between the groundnut prices and prices of groundnut
oil. This has weakened the position of the growers1 cooperatives as the traditional
trade is able to market groundnut oil at prices below the parity prices, because it
has resorted to large scale adulteration of groundnut oil with imported oil, rapeseed
oil and even castor oil.
It is common knowledge that the groundnut oil marketed
by the trade is a blend of groundnut oil, rapeseed oil, palmolien, castor oil,
soybean oil, etc. in varying proportions.
found mixed with the above oils.
In some cases, even tobacco oil has been
Such large scale blending of oil would go against
the oilseed ccoperatives and would be detrimental to the increased production of
oilseeds in India.
Blending of oil would be advantageous in India because high
priced preferred oils could be blended with lower priced oils to provide a product
which is both lower priced and not significantly different in taste than the highly
priced preferred oils. The blended oil would also result in a better composition of
essential fatty acids.
The proportion of various oils should be declared on the container. It is, therefore,
better to have known a declared blend of oil marketed rather than turning a blind
eye to the illegal blending of oils as is currently being practised..
NDDB had put up a proposal to the Government of India in September 1979, to
allow blending of oil and has.raised this issue in various meetings between the
Government of India and NDDBZ as also in various correspondence exchanged
between them.
In a meeting convened at New Delhi on October 12, 1982 to
review the progress of the project and chaired by the Additional
Secretary to the Ministry of Agriculture, the representative of the Ministry of
Civil Supplies informed that a draft notification calling for public opinion on
blending of various vegetable oils had already been issued by the Ministry of
Health.
The final notification was to be issued after initiating objections from the
concerned parties after which it would be sent for approval to the Cabinet.
However, a final decision is still awaited.
8.
The bye-laws of the federations provide that any change in the post of the Managing
Directors of federations may be effected with the concurrence of NDDB/OVCW.
Frequent transfers of Managing Directors of the federations slacken the progress
of the project and lead to further delay in the implementation of the project in the
V
State. This has happened more frequently in the case of Tamil Nadu where
Managing Directors have changed in the last three years and deprived the
federation of its development in the formative stages.
Secretary (Agriculture and Cooperation) had addressed letters to the Chief
Secretaries of the states participating in the NDDB’s Vegetable Ci I Project
requesting them to disallow frequent transfers of Managing Directors of the
- 23 -
federations.
Inspite of such a letter from Secretary (Agriculture and Cooperation),
the experience of NDDB has been that the Managing Directors are not allowed to
have a continuous term of 3-4 years.
Such setbacks have caused delays making it impossible to achieve the end of the
project goals by 1985-86.
Nevertheless, the performance of the project has been
impressive.
However, details on the constraints in the implementation of the project in the
participating states have been highlighted below :
Gujarat :
It was initially proposed toimplement the NDDB's Oilseeds an d Vegetable Oil Project
in the State of Gujarat only.
However, when the project was being
considered for
approval by the Government of India, it was decided to make it an al I—India Project
and extend its coverage to the major oilseed growing states, besides Gujarat.
However, as approved by the Government of India, some 50% of the project
investment is to be made in Gujarat.
The, then. Chief Secretary, Government of
Gujarat participated in all the important meetings held at the level of the Government
of India.
At the timewhen the project was being evolved it was felt that with the commencement
of the action and procurement of the Vegetable Oil Project in the State, there
would be a need for oilseed processing units in the cooperative sector. The Bhavnagar
Vegetabl e Products Unit (BVP) at Bhavnagar was the biggest oil processing unit in
the State but this unit was under liquidation. At a meeting held in Anand on 22-8-1977
during the visit of the Member, Planning Commission, wherein, the Chief Secretary
to the Government of Gujarat was also present, it was felt that the Oil Wing of
NDDB may take over the management of the BVP Unit.
Chairman, NDDB, wrote to the, then. Secretary, Agriculture, Government of
Gujarat vide his letter dated March 27, 1978, giving the details of the production
enhancement activities to be undertaken in Gujarat under the project.
Government assured its assistance to the project.
The
It was also decided that he would
request the District Development Officers to make available land for district farms.
At a meetihg held on 14-4-1978 which was attended among others, by the, then.
Secretary and Deputy Secretary, Agriculture, the problems relating to the
availability of land for district farms and area agronomic centres were discussed in
addition to the problems such as land acquisition etc. A list of various small farms
owned by the State Government in Saurashtra region was also provided at the meeting.
►
It was suggested that NDDB could consider taking over 7 to 8 of these farms.
Regarding Area Agronomic Centres, it was decided to establish two centres, each at
Junagadh and Jamnagar.
This meeting was followed by a letter from Chairman, NDDB
to the, then. Secretary, Agriculture with a proposal to constitute a research and
development committee and a management committee consisting of officials from the
State Government, Gujarat Agricultural University and the NDDB for the
implementation of the NDDB Vegetable Oil Project in Gujarat.
- 24 -
A meeting was held on 9-4-1979 at Anand wherein leading cooperative leaders
and representatives of the Government of Gujarat including Secretary, Agriculture
and Commissioner and Registrar, Cooperative Societies, were present to discuss
and evolve a freamework to enable the smooth functioning of the proposed GCOGF
as the project implementing agency in Gujarat.
The Gujarat Cooperative Oilseeds Growers’ Federation Limited (GCOGF) was
finally registered on June 26,
1979.
Secretary, Agriculture, vide his letter dated 22-11-1979 to Chairman, NDDB,
conveyed the State Government’s consent to set up a cell for planning and
monitoring the oilseeds development in the State for a period of 5 years which
could be funded by NDDB.
He gave the details of the posts to be filled in this cell
and requested Chairman, NDDB, to send a confirmation so that the procedure to
fill up these posts could be started.
Chairman, NDDB, vide letter dated 5-12-1979
informed that NDDB would release Rs. 1 lakh as grant in aid. He requested that the
cell be created initially for a period of one year and necessary actions for filling
up the posts may be initiated. Moreover, Chairman, NDDB also mentioned that as
GCOGF had been set up as the implementing agency of the Vegetable Oil Project
in Gujarat, the District Farm/Area Agronomic Centre could be handed over to GCOGF.
A meeting was taken on 7-4-1980 by the, then. Advisor to the Governor, wherein,
among others. Chief Secretary to the Government of Gujarat and Secretary,
Agriculture were present to discuss the various measures required to speed up the
implementation of the NDDB's Vegetable Oil Project in Gujarat. The handing over of
the seed farms to GCOGF on lease was discussed.
Regarding the setting up of a
Planning and Monitoring Cell, the Advisor mentioned that the cell would be a part
of the Government and the Government would not like to receive any assistance from
NDDB for the establishment and running of the cell.
The cell will continue to liaise
with NDDB in matters to be resolved by mutual consultation.
In case of difference
of opinion, a Consultative Committee consisting of Chief Secretary as Chairman;
Chairman, NDDB; Chairman, GCOGF and Secretary, Agriculture may be
constituted.
Subsequently, a Committee was formed for Monitoring and Planning the
processing of oilseeds in the State of Gujarat.
The State Government in modification of the previous three resolutions regarding the
reservation of the edible oil industry to the cooperative sector, issued an order,
vide Resolution No. INC-1078 294(80)-P-PD dated 27-2-1980 stating that groundnut
oil, cottonseed oil and castor oil are reserved under the cooperative sector by
the Government.
At the request of Chairman, Gujarat State Cooperative Bank Limited, Chairman, NDDB
agreed to meet a group of the leading cooperative leaders from Gujarat to discuss
problems being faced at the village level in terms of loans advanced by the District
Cooperative Banks as well as the problems GCOGF was facing in obtaining
inter-branch facility from Cooperative Banks for operations. This meeting was held
at Anand on December 4, 1981 . Issues relating to the provision of inputs and
finance for groundnut crop by GCOGF were discussed.
-25 -
GCOGF set up in June 1979 achieved significant progress in project implementation.
The Board of Directors of GCOGF was nominated by the Government of Gujarat in
consultation with NDDB vide Government Order No. SPN/316/D-4043 of July 2,
1979. It was further reconstituted by the Government of Gujarat vide Resolution
No. SPN/316/D-463 (i) dated 26-9-1980, following the resignation of the first
Chairman of GCOGF and some of the members of the Board.
Secretaries from the
Department of Agriculture and Food and Civil Supplies, Government of Gujarat
were nominated on the Board together with three representatives of NDDB. The'
Managing Director, Indian Dairy Corporation, was appointed as Chairman, GCOGF.
The remaining four positions on the Board of GCOGF were filled by non-officials
nominated by the Government of Gujarat.
The Chief Minister of Gujarat, vide his letter dated April 23, 1982 appraised the
Prime Minister of the progress achieved in Gujarat with regard to the NDDB's
Vegetable Oil Project.
He also mentioned that the groundnut growers have
received Rs. 100 crores more for their produce than before the implementation of
the project and the price of edible oils has remained stable. He further added
that the Federation should ensure that the remunerative prices paid to the farmers
are maintained.
The Chief Minister thanked the Prime Minister for the assistance
provided to Gujarat through the NDDB and ensured that the objectives of the
project would be met within the time period stipulated.
On 3rd June, 1982, at a function organised at Bhavnagar during the visit of
the Union Finance Minister to the Bhavnagar Vegetable Products Unit, managed
by the NDDB, the Chief Minister and the Minister for Agriculture, reiterated
full support of the Government of Gujarat to GCOGF.
While the Government has given
moral support publicly there has been no practical
support to GCOGF. In fact^GCOGF was expected to financially support the Civil
Supplies Corporation for the public distribution system of the Government by
supplying groundnut oil at a very low rate.
The GCOGF supplied groundnut oil at a
price which was much below the market price or even the cost price.
The total loss
so incurred was Rs. 5.57 <crores . The above financial support of more than Rs. 5.57
crores given by GCOGF to the State Government has practically disrupted the very
foundation of this infant organisation and has put its clock of progress back by two and a
half years.
GCOGF has not been given any important role to play in the implementation of the
special groundnut project involving Rs. 36 crores sanctioned for the State of Gujarat
by the Government of India.
GCOGF is now required to knock on the doors of the
TalukgZli 11 a Panchayats and various Government agencies for subsidies.
the subsidy is paid after an abnormal delay of one year or so.
In many cases
Even now, a large amount
of more than ninety lakhs is outstanding for Junagadh district. Though the Government
has already placed the required funds at the disposal of the District Panchayat, the
District Development Officer has shown his
inability to pay the dues for want of funds.
- 26 NDDB's project very clearly envisages free of cost allotment of lard by the State
Government in various Districts for agro-economic centres and various plants to be
set up by GCOGF.
The problem of not giving land for this purpose has been
intimated to the State Government from time to time.
As the State Government is
unable to provide enough land for this purpose and the programme has to continue
with whatever land obtained, subsequent changes were made.
The area has been
reduced to 80 hectares for the Area Agronomic Centre and so far no land has been
alloted by the State Government. In case of District Farms, six numbers each with
an area of 35 hectares are required and the Government has so far alloted 18
hectares of land at Talaja and has been insisting for its return for the use of Gujarat
Agricultural University.
For the land allotment in setting up the Junagadh
processirg unit, full market price has been realised.
No uniform policy is being followed with regard to the implementation of the
programme of subsidiesjdistribution of insecticides, fungicides, plant protection
equipments etc. in spite of insistence by farmers to obtain insecticides from GCOGF.
GCOGF gets its funds for investment in various projects as well as for procurement
operations against Government Guarantee. Project funds are available by NDDB
on 70% loan and 30% grant basis. There are abnormal delays in the issue of
Government Guarantee with the result that GCOGF is neither able to take up
procurement in time nor are projects being completed as per schedule.
A meeting was called by Shri Madhavsinh Solanki, Chief Minister of Gujarat on
January 11, 1984 to discuss and resolve the problems faced by GCOGF.
This
meeting was attended by Secretary Government of Gujarat - Finance Department,
Civil Supplies Department^ Cooperative Department, Registrar of Cooperative
Societies, Chairman, NDDB and Chairman, GCOGF.
A High Powered Committee is formed consisting of representatives of the Government
of Gujarat, Chairman, NDDB and Chairman, GCOGF and the committee will have
full powers to decide on the problems hampering the speedy implementation of the
project. Several points have been discussed in the subsequent High Powered
Committee meeting held on 5—2—198-4 and it was agreed by the representatives of the
Government of Gujarat that immediate actions will be taken to resolve these issues.
Madhya Pradesh :
In
in the
the original
original project
project document
document of
of the
the NDDB
NDDB ’ss Vegetable
Vegetable Oil
Oil Project
Project as approved
by the Government of India, the State of Madhya Pradesh was not included as one
of the project areas.
Shri S.B0 Lal, Member, State Planning Board, Agriculture
Production Commissioner, Government of Madhya Pradesh wrote to Chairman, NDDB
vide D.O. letter No. 70/SA/79 dated March 20, 1979 requesting to consider
favourably the inclusion of Madhya Pradesh as one of the project areas
under
NDDB’s Vegetable Oil Project. Further, the, then. Registrar, Cooperative Societies,
Government of Madhya Pradesh wrote to Secretary, NDDB giving information for the
preparation of project report and requested NDDB
*o include Madhya Pradfesh under
-27 -
the project vide his letter D.O. MKG/R/5174 dated 20th July, 1979.
Secretary,
NDDB by his letter to the Registrar,Cooperative Societies, informed that the
Madhya Pradesh Government may work out the broad outlines and send the
proposals to NDDB for consideration.
Subsequently, a meeting was held on 22nd
August, 1979 under the Chairmanship of Secretary (Agriculture) wherein the states of
Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra and Gujarat were included.
Chairman, NDDB wrote to the Joint Commissioner, Ministry of Agriculture and Irrigatior
Government of India, vide letter dated September 19, 1979
clarifying that Madhya Pradesh was not included.
The Joint Commissioner, Ministry of
Agriculture and Irrigation, Government of India vide his D.O. letter No. CIS/28011 (1)
CU(1) dated 28fh September, 1979 indicated that Madhya Pradesh has since been
included in the NDDB's Vegetable Oil Project.
In ainticipation of the formation of Cooperative Oilseed Growers' Federation in
Madhya Pradesh, Secretary, NDDB wrote to the Registi
Jrar of Cooperatives to
take up necessary steps with the Government of Madhya Pradesh for issuance of
exemption from sales tax and other levies on the sale of donated oil .A copy of the
model bye-laws was also sent to the Government of Madhya Pradesh and the approval
of bye-laws by the State Government was intimated to NDDB. A Chief Executive
for the newly proposed Oil Federation was posted in September, 1979. The
Madhya Pradesh State Cooperative Oilseeds Growers’ Federation Limited
(OILFED) was registered on October 3, 1979 with its head quarters at
Bhopal and by October 15, 1979, the Board of Directors were nominated by the
Government of Madhya Pradesh.
At the request of the Madhya Pradesh Oil
Federation a two-member spear-head team was sent by NDDB during June 1980.
To facilitate the smooth working in this region,
NDDB opened it’s
Western Regional Office at Bhopal.
In September 1980, the
Amlaha farm was.taken over by Madhya Pradesh Oil Federation for Production
Enhancement activities.
In a meeting held on 22nd May, 1980 at NDDB, Anand
with the officials of the Government of Madhya Pradesh and Madhya Pradesh Oil
Federation, important points were discussed and decisions were taken regarding
sale of donated oil, marketing in project area itself,etc. M/s Tata Economic
Consultancy Services were requested to conduct a study in the project area.
NDDB
made.available a sum of Rs. 1 .00 lakh towards the expenses of this study. A further
contribution of Rs. 10.00 lakhs in September, 1980 and Rs. 50.00 lakhs in October
1980 was made towards the share capital of Madhya Pradesh Oil Federation.
thus has a total pai d-up share capital of Rs. 70.00 lakhs.
NDDB
The Madhya Pradesh Oil Federation was also made the implementing agency for
NCDC financed projects in Madhya Pradesh by the State Government.
As per the
decision of the Madhya Pradesh Government, NCDC desired that three representatives
of NCDC may also be provided on the Board of Madhya Pradesh Oil Federation and
finance from NCDC will be routed through the State Government. The State
Government will also be enrolled as a member of the Oil Federation. As indicated
jn the original project document, the NDDB Vegetable Oil Project is to be
implemented through a two-tier cooperative structure.
Due to inclusion of NCDC,
- 28 -
a three tier system was adopted in Madhya Pradesh which included the Regional
Unibn
operating between the Federation and the Societies.
under the assistance of NDDB and NCDC will be utimately
The plant set up
handled by the
Regional Union which will be affiliated to the Oil Federation for the purpose of
marketing, research and development, training and extension.
In a meeting held on March 6, 1982 in the Chamber of the Additional Chief Secretary
of Madhya Pradesh,
wherein the Registrar,Cooperatives, the, then. Managing
Director of Madhya Pradesh Oil Federation and Chairman, NDDB were also present,
issues regarding project implementation were discussed.
NDDB would consider providing assistance for setting up the Oilseeds Growers’
Cooperative Societies in the NCDC project area as NCDC made it a pre-condition
to sanction the loan to OILFED for setting up four soybean processing complexes.
The surplus available with the Federation may be used for organising OGCS
activities outside NDDB project area in the initial stages.
OILFED was also to
undertake production of vanaspati in their processing plants.
A request was
made to the Government of Madhya Pradesh to transfer the Agricultural Farms to
OILFED.
The progress regarding Amlaha farm was also discussed.
It was decided
that training may be considered as a central activity and NDDB would finance such
activities directly. The issue of channelisation of export of soy meal through the
Soybean Processors Association was also discussed. It was decided that NDDB will
provide funds to the tune of Rs. 16.00 crores as against 8 to 10 crores earlier
allocated, provided that the Government of Madhya Pradesh ensures that no further
licences are issued for setting up new plants in the project area.
The then, . Managing Director of Madhya Pradesh Oil Federation was transferred
during September 1932 and the new Managing Director took charge only
during November, 1982..
In October, 1982 the Madhya Pradesh Oil Federation submitted a composite project
proposal for the NDDB Vegetable Oil Project at an estimated cost of Rs. 300
million of which allocation was made to the tune of Rs. 232 million for creation of
processing,
facilities and the remaining Rs. 77 million for Cooperative Organisation
and Production Enhancement Programmes. The proposal envisages the establishment
of 450 village level OilseedCooperativeSocieties with a total membership of
1,25,000 having 2,50,000 hectares oilseed area.
The Chief Minister of Madhya
Madhya Pradesh, along with the Minister for Cooperation
visited Anand during March 1983. In a meeting with the Chief Minister, the
Minister for Cooperation and other officials. Chairman, NDDB appreciated the
efforts of the Madhya Pradesh Oil Federation and assured continuous support from
NDDB to this project. He also indicated that it would be possible for NDDB to
finance upto Rs. 50.00 erodes in Madhya Pradesh and for this the Madhya Pradesh
Oil Federation has to prepare a detailed project report together
techno-economic feasibility report and submit to NDDB.
with the
The structural changes
- 29 -
necessary to enable OILFED to cope with the project in Madhya Pradesh were also
discussed. The Regional Union to be formed in each area of operation of processing
plants will have village level oilseeds growers' societies as its members, which in
turn would be a member of the oil federation.
These Unions would be responsible
for procurement, processing and marketing of oil in the areas covered by them as
also the implementation of technical inputs programme. However, all financial
assistance would be routed through the Federation.
The Chairman, NDDB also
requested the Chief Minister to ensure that no further licences are given to the
private sector for setting up new soybean processing plants and also ensure that no
licenses are given for expansion of capacity of the existing units in the private sector.
Several other issues were also discussed and the following decisions taken.
- The Government of Madhya Pradesh would initiate action to amend the State
Cooperative Act to enable operation of larger cooperative enterprises on
professional lines.
Staff on deputation would not be taken in the federation of the regional unions.
Government would provide assistance as short and long term loans to finance
procurement operations.
-
Sale of imported oil would be exempted from sales tax and octroi.
Government would provide land for setting up District Farms, Area Agronomic
Centres and processing units including water and electricity connections.
-
Subsidies for oilseed development would be channelised through OILFED.
The Government of Madhya Pradesh again transferred the Managing Director of OILFED
and appointed another Managing Director in June 1983.
In March 1983, the Federation acquired 90 acres of land in Ujjain for setting up the
proposed 400 TPD soybean processing plant.
The execution of this project on turn key
basis is given to NDDB and the work on this plant is under way.
It will be one of the
largest soybean processing plants in the country.
Some of the major constraints in the implementation of the project in Madhya Pradesh
are :
-
frequent modifications of the project proposal, especially with regard to the
parameters of the project, fund requirement and areas of operation
-
delay in site acquisition and decision- on the capacity of the Ujjain Processing Plant
-
involvement of NCDC in financing the federation for setting up a processing unit
in Madhya Pradesh and their subsequent insistence for organising Cooperative
Societies in the NCDC area of operation in Madhya Pradesh and the formation
of regional unions.
-
Continued discussion regarding its bye-laws and share capital contribution.
- 30 -
Andhra Pradesh :
Chairman, NDDB vide his letter dated 8-1-1979 to the, then. Chief Minister
of Andhra Pradesh invited the participation of the Government of Andhra Pradesh
in the NDDB's Vegetable Oil Project.
The acceptance of the Government of Andhra Pradesh, in principle, to implement
the NDDB’s Vegetable Oil Project in the State came in August 1979. After completion ol
the overall discussions on the project area, preparation of project report,mode of financi
etc. it was informed in November 1980, that the Andhra Pradesh Cooperative
Oilseeds Growers’ Federation Limited had been formed in September 1980.
However, the bye-laws of the State level oilseeds
Growers' Federation and the
village level oilseeds growers' cooperative societies did not conform to the model
bye-laws recommended by NDDB.
Areas proposed for the implementation of the
project were large and non-contiguous.
The Government of Andhra Pradesh vide their resolution Noo 57991/80 Ml (a)
dated November 4, 1980 nominated the first Board of Directors of the Andhra
Pradesh Oil Federation and it was informed that an oilseeds expert and nominees of
the National Dairy Development Board will be added later..
The first Board of
Directors of the Andhra Pradesh Oilseeds Growers' Federation as nominated by the
Government of Andhra Pradesh was considered weak to implement the project.
This was informed to the Government of Andhra Pradesh.
Nevertheless,at the request of the Andhra Pradesh Government, Rs. 50,000/were released in July 1980 to the Foundation to Aid Industrial Recovery (FAIR)
(a consultancy organisation based at New Delhi) to prepare a project report for
the implementation.
In April 1981, discussions were held at Anand with the, then. Managing Director
of the Andhra Pradesh State Cooperative Oilseeds Growers' Federation Limited
and in June 1981, a further sum of Rs. 50,000/- and a jeep were released for
initiating action on project planning, organisation of cooperative societies etc.
The Andhra Pradesh Cooperative Oilseeds Growers' Federation Limited (APCOGF)
was required to prepare and submit a project report, justifying the area to be
included and details of the investments required.
Since the APCOGF during the two and a half years of its registration did not make
much of a headway in planning and implementing the Vegetable Oil Project,
Secretary, Food and Agriculture, Government of Andhra Pradesh was invited to
visit Anand to discuss the unresolved issues. However, the visit did not materialise.
In January 1982, Chairman, NDDB vide his letter dated January 11/12, 1982
wrote to the, then. Chief Minister of Andhra Pradesh, to convey NDDB’s
concern over the progress of the project and requested him to look into the matter
to resolve certain pending issues.
The change in the Ministry prevented this.
- 31 -
Chairman, NDDB, could, however, meet the present Chief Minister of Andhra
Pradesh, in March 1983 to discuss the project.
In the meeting, the Government of Andhra Pradesh agreed in principle to appoint
a Senior Officer as the Managing Director of the Andhra Pradesh Oil Federation,
finalise the model bye-laws, identify the project area as per the norms of NDDB,
and reconstitute the Board of Directors, etc. The Chief Minister also agreed to
expedite the implementation of the project in the State to recoup the time already
lost.
Accordingly, a Managing Director was appointed during the first week
of April, 1983 and a meeting was held to sort out various issues.
An amount of Rs. 15.00 lakhs was released to enable the Federation to initiate its
activities and establish the production enhancement programme. The federation
recruited its field staff and commenced its field activities only in the month of
September 1983.
The federation is now making rapid progress.
However, almost four years were lost in :
- Finalising the project area
-
Finalising the bye-laws for the primary societies and the state federation
-
Constituting
-
Appointing the Managing Director for the federation
-
Preparing and finalising the project report
the first Board of Directors of the State Federation
The original Project Plan envisaged 500 hectares for Area Agronomic Centre and
300-400 hectares for two District Farms. The problem of not providing land for this
purpose has been intimated to the State Government from time to time.
Since the
State Government is unable to provide enough land for this purpose and since the
programme has to make do with whatever land that con be obtained, subsequent
changes have been made wherein the area has been reduced to 80 hectares and 40
hectares for Area Agronomic Centre and District Farm respectively.
Tamil Nadu :
In response to the letter from Chairman, NDDB to the Chief Minister of Tamil Nadu
inviting the participation of Tamil Nadu in the NDDB Vegetable Oil Project, the
Minister for Agriculture and Irrigation, Government of Tamil Nadu, visited Anand
on May 19, 1979 and it was decided to extend the project to Tamil Nadu. A Vegetable
Oil Cell (VOC) was formed by the Government of Tamil Nadu under the Secretary,
Department of Agriculture, Government of Tamil Nadu vide Government Resolution
No. G.O. MS No. 1830, Agriculture Department, dated September 24, 1979. The
VOC requested for an advance of Rs. 1 lakh from NDDB for its operation.
pt u I ro
03^7
It was
- 32 -
also decided that the State Cooperative Oilseeds Growers' Federation be formed,
the function of its first nominated board be initiated and a proposal from the
Government of Tamil Nadu be submitted to NDDB for financing .The Vegetable Oil
Cell was subsequently headed by an Additional Director of Agriculture with necessary
supporting staff.
Rs. 1 lakh was released by NDDB in May 1979 for operational
expenses of the Vegetable Oil Cell.
NDDB requested the Vegetable Oil Cell vide its letter dated October.
6, 1979 to send its project proposal which was, however, submitted only in April
1982.
The Project Report had identified the district of North Arcot for implementing
the project which was later reviewed and the Vegetable Oil Cell was invited for
discussions.
In the meantime, the Government of Tamil Nadu created a post for a
Project Director of the Vegetable Oil Cell to assume charge in the first week of
June 1980.
Chairman, NDDB discussed the project further with the, then. Chief Minister of
Tamil Nadu on July 9, 1980 and with the, then. Minister for Agriculture on July
10, 1980.
During this meeting, discussions revolved round inclusion of one more
contiguous district in addition to North Arcot, installation of a processing plant,
formation of a State Oilseeds Growers' Federation and need for an independent
Managing Director, bye-laws of the Oilseed Growers' Cooperative Society, need
for a two-tier system instead of a three tier (as given in the project report) and the
outlay of the project. Subsequently the Project Director of VOC visited NDDB,
Anand between 20th and 26th July 1980 to discuss the project.
The Chief Secretary to the Government of Tamil Nadu informed NDDB vide letter
G.O.MSJSS2! dated 12th September, 1980 that the Government of Tamil Nadu had
carefully examined the proposal of the Vegetable Oil Cell and issued orders to
the effect that the Project Area will include South Arcot, North Arcot and Ching leput
districts.
Further, it added, that a new Directorate of Oilseeds would be formed
and that the Director of Oilseeds would also have the powers of the Registrar of
Oilseeds Growers' Cooperatives.
In September, 1980 the Project Director, Vegetable Oil Cell, informed the State
Government's decision on the acceptance of the project report and enquired about
the agreement, if any, to be executed with NDDB for financing the project. The
Project Director was informed that NDDB can be directly approached for finance
on the formation of the federation.
The Government of Tamil Nadu issued an exemption to register the Federation without
being promoted by the Primary Oilseeds Growers' Cooperatives vide G.O.MS:No
2420 dated December 24, 1980. The Tamil Nadu Cooperative Oilseeds Growers'
Federation was registered on January 1, 1981 . The model bye-laws of the Oilseeds
Growers'Cooperative Society as suggested by NDDB and the Federation were agreed
by the Government of Tamil Nadu except for a few minor changes. These also were
later finalised.
However, it required many discussions.
- 33 -
The Project Director of the Tamil Nadu Oilseeds Project was appointed as Managing
Director of the Tamil Nadu Cooperative Oilseeds Growers' Federation. Although
the implementation of the project started in January 1981 with the registration of
the Federation, the project has not made the desired progress. This is mainly
because of the following :
The first Managing Director of
the federation appointed during January, 1981 was replaced, by another
Managing Director in July, 1981, who was further replaced in June, 1983.
A new Managing Director has recently taken over the charge of the
federation in March, 1984. These Managing Directors were (and are).
carrying out additional responsibilities and thus could not devote full time for the
Frequent transfers of the Managing Directors :
implementation of the project.
Non-availability of processing facilities under the project : The Federation
started the procurement of oilseeds from their grower members through the cooperative
societies. The Federation proposed to acquire the processing plant(s) from the Tamil
Nadu Cooperative Marketing Federation (TANFED) in the Project Area, till such
time that the new processing facilities are set up by the Federation. Inspite of
the Government orders, the plant(s) has not been transferred to the Tamil Nadu
Cooperative Oilseeds Growers’ Federation (TANCOF) . Since the matter of
transfer of the plant(s) was under consideration of the Government, the Federation
did not initiate action to set up new processing facilities also. This affected the
oilseeds procurement and other operations in the implementation of the project.
Non-availability of land for Area Agronomic Centre and District Farm* : The Area
Agronomic Centre and District Farms are required for the production and
multiplication of good quality seeds for the grower members. Inspite of many
discussions with the officials of the State Government and Central Government at
various levels and letters written by NDDB, the Federation has not been provided with
the required land by the State Government. This has adversely affected the technical
inputs and production enhancement programme.
Finalisation of the project report :
The project report prepared by the Vegdab I e
Oil Cel I, Government of Tamil Nadu was reviewed and revised. However, at the
request of TANCOF, NDDB has taken up the preparation of a revised project report
in December 1983. The NDDB team visited the Project Area to discuss the report
under preparation which has since been submitted to the Federation.
Lack of adequate manpower with the Federation : Whatever staff the federation
had in the beginning were on deputation from the Department of Agriculture and
Cooperation, Government of Tamil Nadu. Although the Federation subsequently
made efforts to recruit new staff, the present strength is not adequate for the
implementation of the project.
-34 -
Orissa :
Chairman, NDDB vide letter dated November 26, 1980, proposed to, the,
then. Additional Commissioner (Oilseeds), Government of India
to replace Karnataka by including Orissa under the Vegetable Oil Project as it
could also prove a potential oilseed growing state. In December, 1980 the
Additional Commissioner (Oilseeds), Government of India accepted the proposal
of Chairman, NDDB. Subseauen* to this. Chairman, NDDB addressed a letter No.
a letter dated January 21, 1981 to the then Chief Minister ,
of Orissa inviting the participation of the State of Orissa in the Vegetable Oil
Project.
In February 1981, Chairman, NDDB received a request from the Deputy
Secretary, Department of Forest, Fisheries and Animal Husbandry, Government of
Orissa to send a Project proposal and a techno-economic feasibility report and the
same was sent in March 1981.
In March 1981 Chairman, NDDB again wrote to the,
then. Chief Minister of Orissa vide letter dated March 3, 1981 elaborating the
need for such a project and enclosing the basic data requirement for further
action.
In the subsequent
subsequent correspondence exchanged between the Government of Orissa
and NDDB, NDDB requested that a liaison officer be entrusted with the initial
pre-project activities in the state.
In May, 1981 Government of Orissa appointed
an Officer of the Agriculture Department on deputation for liaison work.
In
August, 1981 NDDB officers visited Orissa and emphasised the immediate
formation of an apex body for the speedy implementation of the project.
NDDB also requested the official of the Government of Orissa to visit Anand for
further discussions, which however, took place only in November 1981 . In a
communication to the Agriculture Production Commissioner, Government of Orissa
NDDB expressed its concern over the slow progress of the project and once again
highlighted the need for greater attention to the project.
It was informed that according to the provisions of the State Cooperative Act,
formation of the Federation needs a minimum of 5 to 7 members of the primary
societies. In view of this, the immediate initiation of the organisation of societies
was emphasised. During this period, the Managing Director of the Orissa Milk
Producers' Cooperative Federation was deputed as a liaison officer for the
Vegetable Oil Project.
Looking to the urgent need for society organisation and preliminary federation
activities, NDDB/OVOW released Rs. 1.0 lakh, vide letter dated December
29, 1981 for expenditure towards the above mentioned purposes.
"To speed up the activities,a planning team from NDDB visited the project area on
January 27, 1982. The Managing Director, Orissa Milk Producers' Cooperative
Federation and Agricultural Production Commissioner, Government of Orissa,
visited Anand during the end of March 1982 and discussed the parameters and
implementation plans with the NDDB officers.
- 35 -
The Orissa State Cooperative Oilseeds Growers' Federation was registered in
May, 1982 and the first Board meeting took place only on July 21, 1982.
Subsequently Rs. 13 lakhs were sanctioned by NDDB in September, 1982 for
setting up an
oil packaging station at Bhubaneswar.
Later NDDB informed the Oil Federation about the various formalities and procedures
required to be undertaken by the federation for
financing the various project components.
However, the project implementation did not come upto the mark. At various stages,
NDDB sanctioned/released funds for the purchases of sheds, satellite plant, execution
and setting up of phase-1 of the Central Oil Mill Complex, purchase of vehicles
and production enhancement programmes, equipment subsidies, training expenses,
mobile team expenses, procurement loans etc.
Some of the major constraints faced during the implementation of the project are
highlighted below :
formation of the federation after almost 18 months from the date of initiation
of discussions with the State Government
-
receipt of the duly approved bye-laws by NDDB as late as February 1982
-
initiation of recruitment of junior and middle level staff as late as August 1982.
Till such time, officers on deputation from the Government looked after the
Federation activities
non-availability of processing facilities of medium and large capacity for hire
by the federation for processing the oilseeds.
Creation of new facilities with
modern set up required considerable time.
no provision of land by the State Government for establishing the Area Agronomic
Centre and District Farm.
Since the State Government was unable to provide enough
land for this purpose, the project had to make do with whatever land available.'
Hence the area for Area Agronomic Centre and District Farm has been reduced.
However, recently, the federation has identified the land in Puri District for the
Area Agronomic Centre and the site has been inspected.
The acquisition of land and other related activities are delayed over a long period
of time.
Maharashtra :
Chairman,NDDB addressed a letter to the, then. Chief Minister of Maharashtra during
January, 1979 informing about the approval of the Government of India to the NDDB
VegetableOiI Project and inclusion of the State of Maharashtra in the project.
December, 1979, the, then. Deputy Secretary (Agriculture and Cooperation)
In
Government of Maharashtra, visited NDDB, Anand for preliminary discussions.
In
March 1980, the Government of Maharashtra informed that steps were being taken to
•■o set up a Cooperative Federation along with the line suggested by NDDB, but even
in October 1980,the proposal was still under consideration of the Cooperative
Department.
- 36 -
In anticipation of the setting up of the Cooperative Federation, Chairman, NDDB
vide his letter dated February 3, 1980 to the Minister for Finance and Planning,
Government of Maharashtra, requested
for exemption from payment of sales tax,
octroi etc. on the sale of imported vegetable oil in Maharashtra. A similar
letter was written by Secretary, NDDB to the Secretary (Agriculture & Cooperation),
Government of Maharashtra in March 1980 to help the Federation start marketing
the imported oil. It was only in April 1983 that Deputy Secretary, Department of
Cooperation, Government of Maharashtra informed that the Cabinet of Maharashtra
nas agreed to exempt levy of tax on the sale of donated oil.
In January, 1981 Chairman, NDDB met the Chief Minister in his chamber and
requested the Government of Maharashtra to expedite the implementation of the
project through a cell to begin with. On a query from the Minister for Cooperation,
Government of Maharashtra about the availability of cottonseed through the cotton
monopoly scheme. Chairman, NDDB agreed to integrate the NDDB Vegetable Oil
Project with the Cottonseed crushing project.
In June, 1981, Joint Director (Agriculture and Cooperation) informed NDDB that
Jalgaon andDhulia districts were proposed for the Vegetable Oil Project. Discussions
continued regarding the project area and in December,!981 Secretary (Agriculture),
Government of Maharashtra convened a meeting wherein officers of NDDB and
various officers of the Departments of Agriculture, Cooperation, Finance and Civil
Supplies were also present.
It was suggested that besides Jalgaon and Dhiil'e districts,
parts of Buldana and Nasik districts would also be included so as to form a continuous
groundnut growing belt of 2,5-0,000 hectares. However, no decision was taken in
this matter.
Further, on January 5, 1982 in a meeting convened by the Minister for
Agriculture, Government of Maharashtra, a decision on the project area, its head
quarters and various other points concerning the implementation of the Vegetable Oil
Project were discussed.
However, no decision could be arrived at.
In order to get the project moving in Maharashtra, Chairman, NDDB met the,
the, then. Chief Minister of Maharashtra on August 4, 1982 and also wrote
to him vide letter dated August 9/10, 1982 informing that the Oilseed
Project is a time-bound programme and three years have been already lost but could
be made good in the remaining four years if the Government of Maharashtra took the1
project seriously and vigorously.
Vegetable Oil
By June 1982 the nodal department of the NDDB
Projectwaschanged from the Department of Agriculture to the
Department of Cooperation.
It was only in a meeting on April 22, 1983 between
the officials of the Government of Maharashtra and NDDB, that the following
decisions were taken :
-
Secretary (Cooperation) Government of Maharashtra would send a formal request
to NDDB for preparation of the project proposal
-
Deputy Registrar of Coperatives would be attached to the Federation for the
registration of primary cooperatives
-
The Board of Directors of the federation would be nominated by the Government
for the initial five years.
- 37 -
-
Bye-laws of the Primary Oilseeds Growers' Cooperative Societies and the
federation would be reviewed after discussions with Chairman, NDDB
A formal request for deployment of NDDB's spear head team would also be made.
-
In this meeting the officials of the Government of Maharashtra also informed that the
Government has agreed to exempt the levy of sales tax and hoped that exemption
from octroi may not be difficult. The Government subsequently issued a Government
Resolution No.VOP-1083/CR-6/21-C on September 21,1983 which also included
organisational set up, project area, nomination of Board of Directors, financial
assistance, project implementation, land per farmer and ban on setting up or expansion
of the existing Vegetable Oil Mills in the project area.
*
It was only after this meeting that the actual progress of the project in Maharashtra
got moving and the Maharashtra State Cooperative Oilseeds Growers1 Federation was
registered on August 16, 1983. In May 1983, on request from Secretary, Agriculture
and Cooperation, Government of Mahrashtra to depute a team for the preparation!
of the project report, a three-member NDDB team was sent in June 1983. A PERT
chart for the action plan of the federation was prepared and sent on October 6, 1983
to the Federation.
The first Board Meeting of the Federation was held on October 19, 1983 which was
followed by the Second Board Meeting on February 14, 1984. From November 1983
to February 1984 very little progress could be made due to the frequent transfers of
the federation officials.
The Secretary (Cooperation), Government of Maharashtra
who was also the Chairman of the Maharashtra State Cooperative Oilseeds Growers'
Federation was moved from his position in November, 1983. The next Chairman
took over in December, 1983. The Managing Director of the Federation has been
But he is also holding the charge of Managing
Director, Maharashtra State Seeds Corporation. He has not been relieved as yet
appointed only in February, 1984.
and NDDB has written to the Chief Minister in this regard.
The following major constraints have affected the implementation of the project in
Maharashtra
:
delay in forming and registering the Maharashtra State Cooperative Oilseeds
-
Growers' Federation.
-
delay in identifying the project area .
-
delay in Finalising the bye-laws of the State Federation and the primary
cooperative societies.
-
frequent transfer of the top executives of the federation by the State Government.
-
delay in appointing the Managing Director of the Federation.
- 38 -
Karnataka :
Chairman, NDDB, addressed a letter dated 8/9-1-1979 to the, then. Chief Minister
of Karnataka inviting the participation of the State of Karnataka in the NDDB
Vegetable Oil Project.
Chairman, NDDB again wrote to the Chief Minister vide letter dated 23/27-2-1979,
requesting his decision on Karnataka's participation in NDDB's Vegetable Oil Project.
As a great deal of spade work is required to be undertaken before the project can be
launched. Chairman, NDDB informed that he would be happy to discuss the issues
related to the project implementation with the State Government officials.
These letters were not acknowledged until July, 1979. The Development Commissioner,
Government of Karnataka informed vide his letter No. DO:AAH:219 AMS 79 dated
4/6-7-1979 the possibility of including one District on pilot basis and expressed his
desire to discuss the modalities of implementing this project. A team of officers from
Karnataka visited NDDB, in October 1979. The Karnataka team preferred a government
corporation rather than a cooperative federation to implement the project.
The Government of Karnataka did not communicate its views regarding the implementation
of the scheme until May, 1980 when Chairman, NDDB met the, then. Chief Secretary
to the Government of Karnataka. The matter was then further followed up with the
State Government.
It was observed that the Government of Karnataka was unwilling to implement the
project on cooperative lines. In view of the time-bound nature of the NDDB Vegetable
Oil Project and reluctance on the part of the Government of Karnataka, NDDB, in
consultation with the Government of India in December 1980 (Chairman, NDDB's
letter dated 26-11-1980 to the, then. Additional Commissioner (Oilseeds), Government
of India and the Ministry's reply dated 17th December, 1980) finally decided to drop
Karnataka from the project, and include Orissa instead. This decision was conveyed
to the Government of Karnataka by NDDB, vide letter dated December 31, 1980.
In May 1981, the, then. Chief Secretary, Government of Karnataka, wrote to Chairman,
NDDB, conveying the government's own proposal to set up a Vegetable Oil and Oilseed
Project. Chairman, NDDB, informed that in the event of the formation of an apex
cooperative body and subject to the availability of funds, NDDB would extend all possible
help.
The request for re-inclusion of Karnataka in NDDB's Vegetable Oil Project came up
again, when the, then. Development Commissioner, Government of Karnataka,
visited NDDB in September, 1981.
On November 3, 1982, the, then. Chief Minister of Karnataka wrote to the Minister
for Agriculture, Government of India to reconsider the inclusion of Karnataka under
the NDDB's Vegetable Oil Project. This letter was forwarded to NDDB by the
Agriculture Commissioner, Government of India, vide his D.O. letter No. CPS.
- 39 -
2801 l(10)/80-CUI, dated 16th November, 1982, for NDDB's views/comments.
Chairman, NDDB informed that NDDB would have no objection to the reinclusion
of Karnataka, should the Government of India so desire, in which case, either
the project in Andhra Pradesh and/or Maharashtra will need to be dropped or
the expenditure reduced.
In response to Chairman, NDDB's letter the Union Minister for Agriculture wrote
(letter No. 28011 (10)/80-CUI dated 16-1 2-1982)to the, then. Chief Minister of
Karnataka, conveying the Government of India's approval on the reinclusion of
Karnataka in the NDDB’s Vegetable Oil Project, and instructed the concerned
departments to get in touch with NDDB for completion of facilities and an
expeditious initiation of the project implementation. A copy of this letter was also
forwarded to NDDB by the Agriculture Commissioner, Government of India vide his*
D.O. letter No. 28011 (10)80-CUI dated 20-12-1982 for information and necessary
action.
On March 14,1983 the Additional Chief Secretary, Government of Karnataka, met
Chairman, NDDB in Anand and discussed various actions required to be taken by
by the Government of Karnataka to implement the project.
Subsequently, detailed
letters were sent to Secretary (Agriculture), Government of Karnataka, intimating
the actions to be taken by the State Government in this regard.
This was further
fol lowed by a meeting taken by the Development Commissioner, Government of
Karnataka on Sth July, 1983, wherein it was decided that the model bye-laws of the'
Oilseeds Growers' Federation and the Primary Societies would be approved by the
first week of August 1983.
The Government of Karnataka had requested NDDB for the preparation of the project
report to be finalised by 31st December, 1983.
In the meeting it was reported that a Project Cell has been set up in the Agriculture
Department of Karnataka, to initiate actionson NDDB's Vegetable Oil Project.
It was also proposed that a Project Officer be appointed to head this cell, who
could act as the contact person. NDDB would deploy one or two of its officers to
assist the Project Cell in organising by the end of August 1983 a minimum number
primary societies required for the registration of the Federation and the
Cooperative Department, Government of Karnataka, would register these societies
of eleven
by the end of September, 1983 to enable initiation of actions on registering the
federation by October 1, 1983.
The project was earlier handled by the Cooperation Deparment where the progress was
not as desired. After constant persuasion, the Government of Karnataka transferred
it to the Agriculture Department in September, 1983 when the various steps to be taken
4
to implement the project were further discussed.
Nevertheless, the State Government was advised to go ahead with the registration of
primary oilseed societies and two jeeps were provided for the purpose. A NDDB team
deputed to the state helped to organise some 29 primary oilseed growers' cooperative
societies with the help of the State Agriculture Department officials.
-40 -
The State Government wanted to finalise the project report before the registration
of the State Cooperative Oilseeds Growers' Federation and this team from NDDB
visited Karnataka in September, 1983 to collect the necessary data. In January,
1984, NDDB sent the broad outlines of the Karnatako Project Report for discussion.
This report has since been discussed by the State Government officers and accepted
in principle. The detailed project report will be shortly sent by NDDB.
The project implementation in Karnataka, thus, got delayed because of the Initial
unwillingness of the Karnataka Government and was consequently dropped and even
on its re-inclusion in the Project in December, 1982, and continued discussions and
meetings with the officials of the Government of Karnataka, the State level
cooperative oilseeds growers' federation has not been registered so far and so is the
finalisation of bye-laws for the primary oilseeds growers' cooperative society level.
*
*
4
PROJECT PROGRESS JUNE'79 TO FEBRUARY '84
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PHYSICAL ACHIEVEMENTS
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