18th Amendment Turned Pakistan Into A 90 Percent Edible Oil Importer
- Pakistan now relies on imports for around 90% of its edible oil requirements, while domestic production contributes only about 10%, compared to nearly 30% before the 18th Constitutional Amendment.
- Officials attribute the decline in local oilseed production to reduced cultivation, low import duties, lack of high-yielding varieties, inadequate mechanisation, and the absence of minimum intervention prices and procurement mechanisms.
- The Senate Standing Committee on National Food Security and Research has sought a detailed review of edible oil imports while the government considers restructuring the Pakistan Oilseed Department despite plans to abolish it.
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ISLAMABAD: Pakistan’s domestic production of oilseed crops, which previously fulfilled nearly 30 percent of the country’s edible oil demand, has witnessed a significant decline since the implementation of the 18th Constitutional Amendment. At present, approximately 90 percent of the country’s edible oil requirements are met through imports, while local production supplies only around 10 percent of national demand.
Managing Director of the Pakistan Oilseed Department (POD), Dr. Basharat Hussain Shah, shared these details while briefing the Senate Standing Committee on National Food Security and Research, chaired by Senator Syed Masroor Ahsan. He informed the committee that Pakistan currently depends on imported edible oil and oilseeds to satisfy nearly 90 percent of its overall requirements.
Dr. Shah explained that sunflower cultivation covered approximately 1.1 million acres in 2011 but dropped dramatically to just 171,000 acres after responsibility for agriculture was devolved to the provinces. He added that Pakistan’s edible oil and oilseed import bill is expected to rise to USD 6 billion during the 2025-26 fiscal year, compared with USD 4.971 billion recorded last year.
He also noted that annual per capita edible oil consumption is projected to increase from 17 kilograms to 19 kilograms.
The Managing Director stated that the Pakistan Oilseed Development Board (PODB) was established through a Resolution following the Economic Coordination Committee (ECC) decision of September 26, 1994, as an attached department under the Ministry of Food, Agriculture and Livestock (MINFAL). After the 18th Constitutional Amendment, MINFAL was devolved and the PODB ceased operations on June 30, 2011.
He further explained that the institution was restored on October 9, 2012, to serve only the federal area under the Ministry of National Food Security and Research (MNFS&R). It became a subordinate office of the ministry on March 21, 2018, and was officially renamed the Pakistan Oilseed Department (POD) on October 11, 2021. However, under the federal government’s rightsizing initiative, the federal cabinet decided that the POD would be abolished with effect from January 1, 2025.
Aamir Ali Ahmed, Secretary of the Ministry of National Food Security and Research, informed the committee that the decision to abolish the department was based on agriculture becoming a provincial subject after the 18th Constitutional Amendment. Nevertheless, considering the strategic importance of oilseed production, the ministry has submitted a summary to the federal cabinet recommending that the institution be restructured.
Ahmed also stated that the Pakistan Oilseed Development Board had already been replaced by the Pakistan Oilseed Department as a subsidiary institution. Despite this transition, he acknowledged that uncertainty remains regarding the department’s future.
According to Dr. Shah, one of the primary reasons for weak domestic edible oil production is the consistently low import duties on edible oils and oilseeds, which have remained largely unchanged for the past 25 years and continue to encourage imports instead of supporting local cultivation. He noted that Pakistan has maintained a 3 percent import duty on oilseeds for the past decade, whereas India imposes a 36 percent duty.
He further highlighted that Pakistan charges Rs10,000 per tonne on imported palm oil, compared to India’s Rs106,000 per tonne. Likewise, Pakistan’s import duty on canola stands at Rs6,864 per tonne, while India imposes Rs49,442 per tonne.
Dr. Shah also identified several structural challenges affecting domestic oilseed production, including the absence of locally developed, area-specific high-yielding varieties and hybrids, along with insufficient mechanisation that continues to reduce agricultural productivity.
He added that another major obstacle is the absence of Minimum Intervention Prices (MIP) and a guaranteed procurement system for oilseed crops. He recommended that Minimum Intervention Prices should be announced before each cultivation season based on production costs and that import tariffs on edible oils and oilseeds should be rationalised.
Dr. Shah informed the committee that the Pakistan Oilseed Department is currently implementing two major projects: the National Oilseed Enhancement Programme worth Rs10.963 billion and the Promotion of Olive Cultivation on a Commercial Scale in Pakistan project valued at Rs5.014 billion.
He also stated that between 2020 and 2026, the federal government allocated Rs4 billion to support increased oilseed production, while domestic production generated estimated economic benefits of Rs364 billion over the same seven-year period.
Committee Chairman Senator Masroor Ahsan emphasized that oilseed production is strategically important and that Pakistan should adopt practical measures to reduce its reliance on imported edible oil. He observed that annual per capita consumption of ghee and edible oil remains at approximately 17 kilograms, making stronger domestic production essential for both economic stability and food security.
Senator Shahadat Awan questioned why the department continued operating despite the government’s decision nearly one and a half years earlier to abolish it. He argued that subordinate departments face financial limitations that prevent them from functioning efficiently.
Awan further stressed that all decisions should remain consistent with constitutional requirements and asked whether provincial governments had been consulted regarding the proposed restructuring. He also pointed to several controversial aspects of the ministry’s presentation and questioned continued federal spending while the government was seeking additional financial resources through the National Finance Commission.
At the conclusion of the meeting, the committee chairman instructed the Ministry of National Food Security and Research to submit complete data on edible oil imports over the previous three years so the committee could conduct a comprehensive assessment of Pakistan’s growing import dependence and evaluate future policy options.
Frequently Asked Questions (FAQs)
What is the Pakistan Oilseed Department (POD)? The Pakistan Oilseed Department is a federal institution responsible for promoting oilseed production. It evolved from the Pakistan Oilseed Development Board (PODB), which was established in 1994, dissolved in 2011 after the devolution of agriculture, restored in 2012, renamed in 2021, and is currently facing possible restructuring despite a decision to abolish it from January 1, 2025.
What is the Minimum Intervention Price (MIP) mentioned in the article? A Minimum Intervention Price (MIP) is a government-announced price intended to protect farmers by ensuring they receive a minimum return for their crops. Officials believe introducing MIP for oilseed crops before each planting season would encourage greater domestic production.
Why is India’s import duty compared with Pakistan’s? The comparison is used to demonstrate that India imposes substantially higher import duties on oilseeds, palm oil, and canola than Pakistan. According to officials, these higher duties provide greater protection for local producers, whereas Pakistan’s lower tariffs encourage imports.
What projects is the Pakistan Oilseed Department currently implementing? The department is carrying out two major initiatives: the National Oilseed Enhancement Programme worth Rs10.963 billion and the Promotion of Olive Cultivation on a Commercial Scale in Pakistan project valued at Rs5.014 billion, both aimed at increasing domestic oilseed production.
