Hyderabad, Aug 19 (IANS): The oil palm industry has welcomed the Central government's initiatives to encourage oil palm production in the country.

The Oil Palm Developers and Processors Association (OPDPA) said the slew of measures announced by the government on Wednesday will make it viable for the industry to operate and ensure the country is self-sufficient in meeting its edible oil requirements.

The Union Cabinet on Wednesday cleared the setting up the Rs 11,040 crore National Mission on Edible Oils-Oil Palm to boost palm oil production in India and reduce dependence on expensive imports from Southeast Asia.

In the project, the Central government's share will be Rs 8,844 crore, while the states will contribute Rs 2,196 crore as their share for the mission.

The measures announced by the Centre include price assurance to the oil palm farmers for the fresh fruit bunches (FFB), a mechanism to fix and regulate FFB prices (MSP), considering the annual average crude palm oil (CPO) price of last five years.

This move will protect the farmers from the fluctuations in international CPO prices and also from the price volatility.

Welcoming the Union Cabinet decision, Sanjay Goenka, President of OPDPA, said, "OPDPA as the nodal agency has been relentlessly pursuing the government to bring about reforms in the sector to help create a sustainable environment for the farmers and the industry -- be it the pricing mechanism or other subsidy measures towards increasing crop cultivation.

"The benefits of the Cabinet announcement will accrue to the farmers -- the most important stakeholder in making widespread oil palm cultivation a reality and whose welfare the association has been fighting for. Today's announcement by the government will have a tremendously positive impact on the sector, and also have a huge impact on foreign exchange savings."