Despite several incentives and subsidies being given by the State and Central governments, oil palm farmers are unhappy with fluctuations in the market price of processed oil and are demanding an MSP of Rs. 6,000 per tonne.
Last year, the price was Rs. 7,758 per tonne. The current price is Rs. 5,880. The farmers are also demanding imposition of additional cess on imports and additional incentives for indigenous farmers.
Oil palm is cultivated in close to 70,000 hectares in the North coastal districts of Srikakulam, Vizianagaram, Visakhapatnam, and East and West Godavari.
In the current financial year, another 8,000 acres are in the process of being added in the five districts. Some 200,000 tonnes of palm oil worth Rs.120 crore is being produced.
The governments are keen on promoting oil palm cultivation, as 8.84 lakh tonnes of palm oil is being imported from countries such as Indonesia and Malaysia every year.
At present, it is being cultivated in 1,500 ha in Srikakulam, 8,000 ha in Vizianagaram, 4,000 ha in Visakhapatnam, 20,000 ha in East Godavari and 40,000 ha in West Godavari.
The government gives a subsidy of Rs. 60,000, covering a period of 4 years per hectare up to 15 hectares. It also arranges buy-back agreement between farmers and fruit processing companies, who collect the produce at the farm.
Unlike other crops, there is no labour problem.
On an average, each hectare produces 25 tonnes to 30 tonnes of oil palm fruit, which results in 5 tonne palm oil per hectare. In comparison, gingelly and groundnut require four times the land for the same output, Additional Director of Horticulture G.Prabhakar Rao told The Hindu.
The average life of the plant is 30 years and from the 5th year onwards the plant starts producing matured fruit and generating profits for the farmers.
During the gestation period, the farmers can go for intercropping with vegetables for which they get an incentive of Rs. 7,000 per ha from the government. For the next 25 years, the plants ensure hassle-free earnings for the farmers.