Bleak future for coconut oil mills in Kangayam due to NAFED’s copra procurement policy

Kangeyam town in Tiruppur struggles as coconut oil mills face challenges due to NAFED's procurement policy.

The scope for Kangeyam town in Tiruppur district to regain its status as one of the biggest markets for copra and coconut oil in India is bleak, due to what the oil mills view as the “detrimental” procurement policy of National Agricultural Cooperative Marketing Federation of India (NAFED).

In fact, there are less than 10 out of 120 coconut oil mills that are in a functional status, and there is no certainty about their future sustenance, according to N.S.N. Dhanapal, president, Kangayam Coconut Oil Manufacturers Association.

The downfall of coconut oil mills in Kangayam began two years ago when they started losing their business base in Kerala, where copra processing units sprang up in large numbers owing to conducive industrial policy and ideal power tariff, Mr. Dhanapal said.

The oil mills in Kangayam are now in a piquant situation since coconut oil is cheaper than copra, which, is, in turn, cheaper than coconut.

The Central government procures milling copra under Price Support Scheme through NAFED, for a reasonable price of ₹110 per kg. But, when the NAFED resorts to selling copra for a low price of ₹80 per kg at times of high yield of coconut, the price takes a hitting.

Instead, the government can give compensation to farmers per coconut tree annually, to safeguard them from the vagaries of market price, at the time of sale of copra by NAFED, the association has said in separate representations to the Union Finance and Agriculture ministries.