GM Mustard won't solve India's edible oil import problem, says Ashok Gulati

Gulati says he is in support of GM mustard, but to say that it will solve India's problem of edible oil imports is a stretch

The Central government needs to spend much more on agriculture research and development than on farm subsidies to ensure sustainability and productivity of the food systems in the country, eminent agriculture economist and Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICRIER) Ashok Gulati tells Business Standard in an interview ahead of the Budget.

In an unrelated comment, Gulati categorically stated that GM mustard (DMH-11) won’t solve India’s edible oil import problem because mustard (even with higher yields due to GM) can never be as competitive as palm oil. Edited excerpts:

A big challenge India faced last year was food inflation. We had high inflation in cereals and also in edible oils. Do you think inflation will remain a concern next year (FY-24) as well, particularly in cereals?

RBI said a few weeks back that, hopefully, the worst of inflation is behind us because whatever we have been reading in terms of the Russia-Ukraine war it seemed the inflation in the first place was created due to the eruption in global food prices due to the war. It was not just some demand-supply issue or disruption due to climate change. It was basically the high energy costs and lack of supplies from Russia and Ukraine that pushed up food prices. Now, that type of unknown in the system we don’t know. But, to the extent that we can see the situation, at present, it is not as bad as it was before. It has not come totally under control. Even the energy prices are gradually coming down and unless there is a major flashpoint within the Russia-Ukraine war or any other geopolitical crisis or the heatwave again hits us very badly in March as it did in March (last year) we could lose something. So, in a nutshell, I feel given the business as usual, under normal circumstances, we should have inflation reasonably under control. It is still not the best but better than earlier.

Does this also call for a rethink on the numerous curbs and bans that India had imposed to control inflation in the last few months?

I would never recommend anything like stock limits or export controls but some filtration can be done. We should move gradually, in a calibrated manner, towards opening up. The good thing is the big increase in fertiliser costs has not been transmitted to the farmers. That was absorbed by the government. In that way, the government can say to farmers -- We are not hurting you on fertiliser prices but you also make some sacrifices by not getting the best possible benefit of the international price.

One big thing that struck the agriculture sector this financial year was GEAC giving ‘environmental approval’ to GM mustard (DMH-11). It's said that it is the answer to India’s problem of rising edible oil imports. Do you think the time has come to move decisively on a new technology path for agriculture?

You know as far as GM mustard is concerned as long as GEAC (Genetic Engineering Appraisal Committee) has given some clearance, I’m in support of that. But it is a political call finally because some people are opposing it which is perfectly fine as in democratic countries you have these checks and balances. As far as my position is concerned, I’m in support of new tech and GM mustard should go ahead. Will it solve India’s problem of edible oil imports? No...No way. This is because we are importing 55-60 per cent of our annual edible consumption and mustard can never be competitive with palm oil. Palm oil gives four tonnes of oil per hectare while mustard gives something around 400 kg. It will go up due to these latest technological innovations but it can never match palm oil. Palm oil is by far the cheapest edible oil available in the world.

Coming to the forthcoming Budget. What according to you should be the big concerns for the government?

In agriculture and food space, there are three big items: food and fertiliser subsidies; and PM-Kisan disbursals. The Centre should rationalise them all. We are spending much less on agriculture investment than on subsidies. Look at the Budget allocation for the Indian Council of Agriculture Research (ICAR). It is around Rs 8,000 crore per year. And we are spending lakhs of crores annually on subsidies such as free food. This does not gel well with the sustainability and productivity of the food systems, which will come through investments in agriculture R&D which have a very high rate of return, irrigation and now investment in environmental protection within agriculture and not just adaptation. We need to find out resources to do these.