Expanding land under oil palm apt, but not at the cost of environment

The Centre’s move to expand land area under oil palm on mission mode, particularly in the north-east region with price support for growers, is necessary to dent the country’s huge import bill. However, the government must rethink extending the programme to the Andamans because of the possible environmental impact.

Care will have to be taken to protect the biodiversity of the north-east region as well. Only land used for other crops should be brought under palm, sparing the forests.

“There is no question of damaging the environment,” says Ravi Mathur, Director of the Indian Institute of Oil Palm Research (IIOPR) in Andhra Pradesh’s West Godavari district. Unlike Malaysia and Indonesia where companies have captive plantations and rains forests are depleting fast, in India oil palm is a farmers’ crop with companies having no stake in it.

Mathur suggests that existing cultivable area can be diverted to oil palm. “By doing so tribal farmers of the north-eastern region can get a steady income and minimise damage to environment, caused by traditional jhum or shifting agriculture,” he added.

Mathur did not comment on the proposal to extend the crop to the Andaman region, saying the matter is “sub judice.” He, however, said the Supreme Court has spoken against monoculture in the islands. In fact, Mathur’s institute had submitted a report listing the harms of monoculture on environment.

Because of abundant rainfall, the Andaman region is best suited for oil palm. But the Rajiv Gandhi government had stopped its cultivation in 1987, says Nasim Ali, who retired as CEO (Oil Palm Plantation) of Godrej Agrovet last December. Ali was a forest service officer in the Andamans before he joined the company in 1983. He said the islands’ forest department and, later, the forest development corporation had brought 1,593 hectare land under oil palm, before the government ordered a halt.

Also read: Edible oil prices to come down after this massive move by Centre

Godrej Agrovet is the largest producer of palm oil in the country. It has farmers on contract growing oil palm on more than 75,000 hectare land, most of it in Andhra and Telangana and some in Mizoram.

Oil palm cultivation in the Andamans will have to be on forest land cleared for timber. They will likely be large corporate plantations. A network of roads and other infrastructure will have to be created to service the plantations. The economic activity will affect the fragile ecology of the region. It is best to keep the islands off-bounds for oil palm.

Even in north-east of India, civil society groups will have to be vigilant about the activities of companies with dubious ethics playing fast and loose with environmental concerns. Patricia Mukhim, editor of The Shillong Times, said illegal coal mining in Meghalaya is a matter of concern. Patricia has also been vocal in her opposition to oil palm ‘monoculture’ in the region through her Facebook posts.

Given weak local governance structures in the north-eastern states and the Union government’s patchy record of protecting the local green cover, vigilance will have to be exercised.

The edible oil industry has come out with an Indian Palm Oil Sustainability (IPOS) Framework. Will companies adhere to the protocol? If they do, will the protocol make oil palm cultivation truly sustainable? These and many more questions need to be assessed independently.

Also read: Indian market needs sustainable palm oil supply chain

Without oil palm, however, more land will have to be devoted to cultivation of oilseeds (sunflower, safflower, groundnut etc) to meet the ever-increasing cooking oil demand of the country. This is certainly not a sustainable proposition.

Oil palms yield 4,000 kg of oil per hectare, compared to mustard, which has a high oil content of 42 percent but given Indian average productivity, yields come to around 400 kg oil per hectare.

The National Mission on Edible Oils – Oil Palm, which the Union cabinet approved mid-August, is a very ambitious programme. It aims to bring an additional 6.5 lakh hectare land area under oil palm over the next five years – nearly 200 percent of the coverage – 3.5 lakh hectare – which was achieved over the past 30 years. Hopefully, it will not go the way other government schemes have gone so far, like doubling farmers’ income by March 2022 or creating a $5 trillion dollar economy.

The oil palm mission is a centrally sponsored scheme with an outlay of ₹11,040 crore, of which 80 percent will be the Centre’s contribution. Incentives and price assurance are the tools the government is relying upon. Oil palm trees have an economic life of 25-30 years. They start yielding fruit from the third or fourth year onwards. Farmers need price assurance to take the long-term risk of growing palm trees. The current formula makes their income volatile because it is linked to the international price of crude palm oil (CPO) which varies as per the price of crude oil (as palm oil is used as biofuel).

The crop is currently very profitable. CPO is trading at $1,195 a tonne in Malaysia, which along with Indonesia supplies 80 percent of the world’s palm oil. Indian farmers with mature plantations (of eight years or more) and an average FFB yield of 19 tonnes per hectare (in Andhra and Telangana) make about ₹two lakh per hectare per year. But between 2014 and 2018, CPO was trading in the range of $440 and $600 a tonne. Farmers either incurred losses or made small profits.

Under the new formula, farmers will get an assured price. It is linked to the trailing five-year annual average of wholesale prices. If the price exceeds another benchmark linked to the average of monthly wholesale prices, the Union government will compensate the processors to that extent. There is a higher incentive for growers in the north-east and the Andamans.

The subsidy on seedlings has been more than doubled from ₹12,000 per hectare to ₹ 29,000. This will enable processors to supply imported semi-clonal varieties which have higher output and higher oil yield. Since 143 seedlings can be planted per hectare, the subsidy comes to ₹203 a plant. When the subsidy was lower, farmers were given lower-yielding Tenera cross variety. Subsidy has also been provided for setting up processing units in the north-east.

Godrej Agrovet’s CEO Balram Yadav is quite kicked by the promises. If they are implemented in letter and spirit, his company will bring in an additional 1 lakh hectare land under oil palm, he says. But Yadav insists the Union government should be in the driver’s seat. He has little faith in state governments being able to deliver as they are chronically short of funds.

Yadav sees area under paddy in the southern states being diverted to oil palm, because of high labour costs. This will be good for the environment as well, he says. Paddy in Andhra needs about 300 lakh litres of water per hectare compared with 67.5 lakh litres of water needed for oil palm. Eighty percent of farms on contract with Godrej Agrovet use micro irrigation (drips and jets), which saves a lot of water.

In the north-east, where it rains for about six months a year, the irrigation requirement is less, but infrastructure will have to be strengthened. Without a network of roads to connect to villages, the oil palm industry cannot develop. The fresh fruit bunches (FFB) have to be processed within 48 hours – before rancidity sets in. Currently, 28,000 hectare land is under oil palm in Mizoram. But the oil is brought by tankers to Kolkata for processing at a cost of about ₹6,000 a tonne.

IIOPR has developed a package of practices to adapt oil palm to Indian conditions. The nine-metre gap between palms can be used to grow ginger, turmeric, bush pepper and medicinal herbs in early stage, semi-shade conditions. Half-moon terrace cultivation is recommended for the north-eastern hills. The edges of the semi-circular fields cut into hills are slightly raised for water to percolate into the ground.

India is the second largest importer of cooking oil after China. It imports around 15 million tonnes of edible oil annually. About 45 percent of this is palm oil, which is mainly used in hotels and restaurants and in the food industry.