Oil palm farming could meet domestic demand if key issues are fixed
Newspaper: Business Standard
Date: 6th November 2012
Edition: New Delhi
A practical way to narrow the wide gap between the indigenous supply and demand of edible oils is to promote the cultivation of oil palm — a perennial plantation crop that yields several times more oil per hectare than the currently cultivated field crops. The growth in oilseed production has failed to keep pace with demand, despite interventions by the Technology Mission on Oilseeds over the past 25 years. Worse still, the supply crunch is growing steadily, necessitating huge annual imports estimated at over Rs 40,000 crore.
Past efforts to promote oil palm farming have not yielded expected results, despite the involvement of some corporate houses to raise these plantations on forest lands in selected states. A key reason, it is now realised, was the mistaken belief that this oil-bearing palm did not need much water to thrive on marginal forest lands. The other causes included inimical forest laws, long gestation period of three years before bearing oil-containing fresh fruit bunches (FFBs), lack of agronomic and managerial expertise, unfavourable policies concerning pricing and import of vegetable oils, and slow expansion of palm oil extraction and processing industry. Unsurprisingly, many plantations had to be uprooted, chiefly in Andhra Pradesh, Karnataka and Tamil Nadu, owing to meagre productivity and poor returns.
Fortunately, the lessons seem to have been learnt from these errors. Fresh initiatives now underway to push oil palm farming are, consequently, focused chiefly on areas that have requisite agro-climatic conditions and adequate water. A committee set up under the chairmanship of R Rethinam, former director of the National Research Centre for Oil Palm, Pedavegi (West Godavari district of Andhra Pradesh) has identified 1.93 million hectares of land in 18 states that can potentially be brought under oil palm plantations. Most of these tracts are in the southern and eastern states.
Micro analysis of agro-climatic conditions may help locate more areas suitable for growing oil palm, especially in the northeastern states, the expert panel has said in its recently released report. At present, the bulk of the oil palm plantations, estimated at slightly over 200,000 hectares, are located in Andhra Pradesh, Karnataka and Tamil Nadu — with Andhra Pradesh alone accounting for nearly half of this acreage.
Significantly, these states are now omitting drought-prone areas in their drive to spur oil palm farming. The committee has also suggested a road map to achieve the target of expanding oil palm acreage by about 60,000 hectares a year during the 12th Plan, under Krishi Bhawan’s flagship agricultural development project, Rashtriya Krishi Vikas Yojana. The panel, in fact, seems optimistic about the target being revised upwards as the availability of funds improves. To meet the planting material requirement for the new plantations, six more seed gardens of at least 20 hectares each would need to be set up, preferably through public-private partnership route.
Though limited quantities of the palm sprouts (seedlings) can be supplied by the Directorate of Oil Palm Research of the Indian Council of Agricultural Research, the bulk of the planting material requirement would need to be met through imports in the initial period. The proposed new seed gardens would take at least eight years before they begin to churn out seedlings.
On the policy front, the biggest need is to ensure remunerative prices for the indigenously produced FFBs to incentivise the farmers and others to venture into this field. This is essential also for wooing investments in oil extraction and processing units, which need to be in place to crush FFBs soon after these are harvested, in view of their perishable nature.
Besides, vegetable oil import policies, especially import duties, would need to be revisited to encourage domestic production vis-à-vis imports. Oil palm, moreover, would need to be declared as a plantation crop like coffee, tea and rubber to exempt its orchards from the land ceiling laws. Unless these critical issues are suitably addressed, the oil palm cultivation may not acquire the necessary foothold in the country to curtail the dicey dependence on imports for meeting the domestic cooking oil demand.