RECORD OF DISCUSSION IN THE SESSION ON OILPALM HELD ON 04.10.

2010

A half day Session on Oilpalm was held on 04.10.2010 in Committee Room No.142, Krishi
Bhavan, New Delhi under the Chairpersonship of Shri P.K.Basu, Secretary, Department of
Agriculture & Cooperation. The list of participants is at Annexure-A. The agenda of the Session is
at Annexure-B.
Oilpalm is covered under the existing scheme of ISOPOM which is being implemented since
01.04.2004. DAC is currently reviewing programmes for increasing production and productivity of
important crops. It is also considering launch of a Mission on Oilseeds and Oilpalm in the XIIth Plan
Period. The Session was organized with the objectives of understanding the importance; current
status, problems, issues, potential and future strategies in respect of Oilpalm. The presentations
of the Session were both technical and State specific. The discussions/suggestions of the meeting
are recorded below.
I. IMPORTANCE OF OILPALM
i. 26.19% of vegetable oil requirement in the world is provided by Oilpalm (2008-09). It has
40% share of the world’s trade in edible oil.
ii. The worldwide area planted under Oilpalm has increased by more than 150% in the past
few decades. Most of this increase has taken place in South-East Asia, particularly in
Malaysia and Indonesia.
iii. Economic Models (AP and TNAU) establish that cultivation of Oilpalm in one hectare is
financially viable on major financial indicators of NPV and IPR. Annual return exceeds
annual expenditure from first harvest in Year 4 and total return is more than total
investment in Year 6.
iv. Oilpalm can be the primary source for achieving vegetable oil security. It is the highest oil
yielding plant in the world with 5 times higher oil yield per hectare compared to other
vegetable oil yielding crops.
v. It has the capacity to provide year long income and employment. It has been successfully
adapted to suit the need of small holders; it has, thus, proved a powerful tool for poverty
alleviation in developing countries.
vi. It is considered as a ‘Miracle Oil’ as it is found to be rich in Vitamin A & Vitamin E with
diversity of uses for both food and non-food products.
vii. It is more competitive on resource use efficiency and wider energy balance expressed as
ratio of energy output to input than other oil crops.
viii. About 25% of the harvested bio-mass may be returned to the field as nutrient rich mulch.
ix. It is used to produce oleo-chemicals which are more environment friendly than
petrochemicals.
x. It is increasingly being used as bio-fuel.

II. IMPORTANCE OF OILPALM FOR INDIA

i. India is the 4th largest edible oil economy in the world. Half of the total edible oil
requirement of 16.35 million tons was met through imports at a cost of Rs. 27,000 crores in
2008-09.
ii. Palm Oil and Soybean are major components of these imports. Since domestic production
of palm oil can meet just 1% of the requirement, India has become the world’s largest
importer of Palm Oil followed by China and EU.
iii. The primary reasons for acute shortage in domestic vegetable oil production are:
a. increase in per capita consumption of vegetable oils (highly income elastic) from
6.20 kg. in 1986-87 to 14 kg. in 2009-10
b. population increase.
Per capita consumption in India is still at a very low level compared to other countries. It
can, therefore, safety be assumed that the total vegetable oil requirement is bound to
increase in the coming years.
iv. The ability of meeting the requirement of edible oil through imports may be short-lived.
Global demand for Palm Oil is projected to grow from 2005 level of 20 million tons per
annum to 40 million tons in 2020. The situation could get aggravated if oil exporting
countries divert considerable quantities for bio-fuel production.

III. STATUS OF OIL PALM CULTIVATION IN INDIA

Large scale planting was launched from 1971 to 1984 in Kerala and Andaman and Nicobar Islands.
8585 hectares were covered till 1991-92. TMOP was launched in 1991-92 and was replaced by
ISOPOM in April, 2004. 173143 hectares were covered under Oil Palm up to 2009-10. However,
nearly 17900 hectares were uprooted due to several reasons. The net area under Oil Palm up to
2009-10 is 155203 hectares.
IV. OIL PALM UNDER ISOPOM
The Oil Palm Development Programme under ISOPOM has been approved for 12 States. However,
it is being implemented in 72 districts of only 8 States viz. Andhra Pradesh, Karnataka, Tamil Nadu,
Orissa, Gujarat, Goa, Mizoram, Kerala. Four identified States i.e. West Bengal, Maharashtra,
Assam and Tripura are not implementing the Programme. The implementation is insignificant in
Goa.

V. RECOMMENDATIONS OF THE CHADHA COMMITTEE

The Chadha Committee has, in its 2006 Report, identified potential area of 10,36,500 hectares in 9
States viz. Andhra Pradesh, Chattisgarh, Gujarat, Goa, Mizoram, Karnataka, Kerala, Orissa and
Tamil Nadu. The Committee did not recommend any area for Assam, West Bengal and Tripura due
to non-interest of the concerned States. About 76% of the total potential area in India is in the
States of Andhra Pradesh, Karnataka and Tamil Nadu. The actual achievement against total area
projection of Chadha Committee is only 15%; the achievement against area projection up to the
year 2010-11 is 60%.
The Session was of the view that the Oil Palm Development Programme in the country is
progressing at a slow pace and area coverage is not taking place as per envisaged targets.

VI. CONSTRAINTS IN OIL PALM DEVELOPMENT

i. Slow pace of area expansion: only 1.78 lakh hectares covered against assessed potential of
10.36 lakh hac.
ii. Planting oil palm in less suitable regions. Targets based on macro level projections of
potential area.
iii. Uncertainty regarding area expansion programme/ targets.
iv. Improper and inadequate guidance for new plantations.
v. Oil Palm is a water loving crop with requirement of 120 to 150 mm per month. Poor water
availability throughout the area is leading to instability in production.
vi. Low yield realization in general.
vii. Competition: Sharp spurt in the prices of traditional crops like Arecanut in Karnataka,
rubber in Kerala, sugarcane in Gujarat.
viii. Availability of quality planting material of correct age is inadequate and uncertain.
ix. Non availability of quality hybrid seed.
x. Crop nutrition is inadequate and imbalanced.
 xi. Processing problems: lack of processing plants in States like Mizoram and Gujarat; non
optimal utilization of existing Mills and other inefficiencies in processing.
xii. Low oil extraction ratio.
xiii. Import Policy: Import of edible oil was brought under OGL in 1995. Present import duty is
10% on CPO and 7.5% on refined oil. Domestic prices of oil palm are significantly affected
by cheaper imports from Malayasia and Indonesia hence fluctuate considerably. FFB price
is unrumenerative to enthuse farmers for intensive palm cultivation.
xiv. The present cost of cultivation is approximately Rs. 8750/- MT of FFB produced (source:
National Oil Palm Farmers’ Association). The prices of oil palm/ FFB increased steadily
from Rs. 2000/- MT in 1993 to Rs. 5434/- in 2008. But there was a sudden fall in FFB during
2009-10 to Rs. 4075/- per MT. Thus farmers are incurring loss to the tune of Rs. 4750/- MT
of FFB.
xv. The FFB price fixing formula (12% of CPO plus 1/3rd of Kernel value) is adhoc and un-
remunerative.
xvi. Returns from oil palm are not being maximized through diversification. There is lack of
utilization of bio products by processing industries.
xvii. Inadequate financial support by Government: The total expenditure for the last 6 years
has been Rs. 170 crores at an average of Rs. 28 crores p.a. reaching Rs. 40 crores p.a. in the
last 2 years only. A minimum amount of Rs. 645 crores is required as share of GOI for
assistance for new plantations to achieve the Chadha Committee target of 2.20 lakh hac.
by the end of XIth Plan (i.e. 1.29 lakh hac. in 2010-11 and 2011-12).
xviii. Resource and security related issues viz. credit from commercial Banks and NABARD,
implementation of crop insurance schemes, enactment of legislation etc.
xix. The Market Intervention Scheme (MIS) has been applied to oil palm but it has not been
facilitative or encouraging; operated only once in Andhra Pradesh and Karnataka in 2008.

VII SUGGESTIONS MADE IN THE SESSION BY PARTICIPANTS FOR OIL PALM DEVELOPMENT

1. Area Expansion
i. Expand area as per assessed potential and recommendations of Chadha Committee.
ii. Non implementing States such as Assam, West Bengal, Tripura and Maharashtra to
implement OPDP.
iii. Assess potential in other suitable States like Arunachal Pradesh, Bihar, Jharkhand,
Pondicherry, Manipur, Meghalaya and Eastern U.P.
iv. Micro level survey for area expansion in different States to ensure spread of suitable area
with assurance of irrigation.
v. Cover suitable area in Wastelands.
vi. Follow hub and spoke model with a processing unit as the hub for area expansion: ensure
simultaneous allotment of area to a Company.
vii. Convey area expansion targets atleast 2 years in advance.
viii. Enhance subsidy limit for area expansion from 15 hectare to 25 hectare.
ix. Relaxation of land ceiling norms: treat oil palm as a plantation crop.
x. Simplify procedures of area allocation.
2. Planting Material
i. Ensure adequate and timely supply of quality planting material.
ii. Bridge anticipated gap in seed production. Indigenous production is estimated as 5.94
million: the requirement of sprouts to achieve Chadha Committee target upto 2011-12 is
18.64 million.
iii. Expand and strengthen existing 6 seed gardens. Assessed potential is 48.50 lakh sprouts.
Scope exists for enhancing capacity by 20.3 lakhs.
iv. New seed gardens need to be established on war footing; seed production will commence
only after 10 years. Private entrepreneurs should be encouraged to establish seed
gardens.
v. Expanding of germplasm base, particularly in respect of dwarf and stress tolerant varieties/
hybrids.
vi. Procure good quality material through import: Joint venture with reputed foreign
companies; diversification of import sources (need to import other than material Costa
Rican; consider Malaysian material).
vii. Expedite tissue culture and micro propagation to produce oil palm sprouts on commercial
scale. Conventional breeding is extremely slow and breeding cycle can take up to 10 years.
Country should negotiate for supply of parental lines while importing sprouts.
viii. Fix uniform price for Oilpalm seedlings.
3. Improve Oil Palm Yield
i. Aim for average productivity of 5 MT oil per hectare or 20 tonnes/ hectare of FFB.
ii. Integrated approach to crop production viz. planting material, fertilizers, inter crop; drip
irrigation etc.
iii. Provide production based incentive to farmers. Also consider special incentive on yield of
more than 25 MT hectare of FFB after year 8.
4. Improved return from oil palm
i. Promote value addition through diversification and effective utilization of field and factory
wastes:
a. palm trunk for furniture,
b. shredded fronds for vermi composting and mulching.
c. empty fruit bunches for making coir fibre.
d. palm kernel shells and palm press fibre as boiler fuel.
e. POME as a substitute for fertilizer.
ii. Adopt integrated and remunerative farming system on account of long gestation period
and perennial nature of growth. Government schemes should support inter-cropping
particularly during gestation period.
5. Processing
i. Ensure capacity utilization of existing processing units, priority should be given to expand
area under existing mills to achieve capacity utilization and reduce production costs.
ii. Establish small scale palm oil mill in Mizoram and operationalise the existing mill in Gujarat
to restore confidence of farmers and boost oil palm production.
iii. Improve oil extraction by harvesting at right maturity, minimum stalk length, improving
pollination, avoiding long harvesting intervals and avoiding exposure to rain.
iv. Improve efficiency of processing.
v. Assess Malaysian techniques for direct extraction of refined oil instead of producing CPO at
the inter-mediate stage.
6. Insulate and secure oil palm cultivation from fluctuations.
i. Review current import duty regime of CPO and RPO. Announcement of import policy on
long term basis taking into consideration its effect on local seed oil production, marketing
and pricing.
ii. Implement MIS as an effective interventionist instrument.
iii. Review of FFB price fixing formula by NRCOP: National Oil Palm Farmers Association has
suggested revision of FFB from existing 12% of the CPO plus 1/3 of kernel value to 16% of
CPO plus ½ of value of oil by-products.
iv. Maintain uniform price fixing formula in entire country by carrying out cost of cultivation
analysis in respective States.
 v. Creation of price stabilization fund for oil palm growers; suggestions include collecting
certain percentage of money from FFB sale.
vi. Implementation of crop insurance scheme. Sensitize commercial banks and NABARD for
promotion of oil palm cultivation.
vii. Enactment of Oil Palm Act on mandatory basis in all States. Only 4 States i.e. Andhra
Pradesh, Tamil Nadu, Goa and Mizoram have introduced legislation. Law should provide
for provisions to recover govt. assistance if oil palm is up-rooted/diverted without
justification.
7. Mechanization
i. Improved harvesting machinery: at present crop height is a serious problem for harvesting
in adult plantations of more than 10 years age. Harvesting is done either by climbing the
tree or through an aluminum pole attached to a sickle.
ii. Subsidy should cover aluminum pole and chaff cutters at higher rates.
iii. Import of superior gadgets for harvesting from Malaysia/other countries.
8. General Points
i. Enhance cultivation subsidy of Rs. 15,500 per hectare to Rs.40,000 per hectare. Cultivation
cost of Rs. 15500 per ha for 4 years is admissible up to 15 ha for individual farmer
ii. Increase in subsidy on drip irrigation from 2 hectare per farmer upto 5 hectare per farmer
due to revision of NMMI
iii. Develop a mechanism to enable farmer to obtain & sell carbon credits (at fixed price) as
carbon can be sequestered and credited for oil palm.
iv. Establish Oil Palm Board to consider planting, expansion and development of oil palm
production, processing etc.
v. Establish soil and leaf testing labs.
vi. Strengthen contractual system of oil palm cultivation.
9. RESEARCH STRATEGIES (IMMEDIATE): IDENTIFIED BY ICAR
i. Evolve hybrids with high FFB yields.
ii. Evolve dwarf hybrids.
iii. Development of tissue culture protocol for micro propagation of elite palms.
iv. Development of improved tools and machinery for harvesting to be taken up on
priority basis.
v. Improvement in processing technology for obtaining better OER with low FFA.
vi. Streamlining methodology for fixing FFB price on scientific basis.
10. PROPOSED STRATEGY
Oil seeds and Oil palm have been identified by the Department for launch of a Mission in the
Twelfth Plan period. Work has already been initiated on developing a Mission. A session to review
the existing ISOPOM Scheme was held under the Chairpersonship of AS (AB) on 5th October 2010.
Future work includes the following two stage process:
a. Identification of other potential States for oilseeds and oil palm by concerned ICAR
directorates within a month.
b. Four regional workshops with States (including potential states) to finalize
interventions under the Mission.
Therefore, most of the suggestions/recommendations will be considered and accommodated
under the proposed Mission for the next plan period (because 2011-2012 being the last year of
the current Plan period, there is remote possibility of consideration of new interventions under
EFC process at this stage).

SHORT TERM ACTION POINTS

However, certain actions are proposed in the short-term i.e. within the XIth Plan period and under
the existing Scheme:
i. Identified but non-implementing States of Assam, West Bengal, Tripura and Maharashtra
to implement OPDP from 2011-12 if not from current financial year itself.
ii. Seek approval of competent authority to implement following with immediate effect:
a. extend program to States recommended by Chadha Committee but not covered
under ISOPOM viz Chattisgarh
b. carry out revision in following components on an urgent basis as recommended by
Chadha Committee:
 enhance assistance on planting material from existing 75% of the cost limited
to Rs.7500/ha to 85% of the cost limited to Rs10000/ha
 enhancement of cultivation cost during gestation period of 4 years from existing
Rs.15500/ha to Rs.20000/ha
 provide assistance for inter-cropping. Norms to be finalized in consultation with
NRCOP
 encourage establishment of seed gardens by private sector by providing
assistance as grant of Rs.30.00 lakh for 15 ha as recommended by Chaddha
committee
 iii. DAC to set up a technical committee to assess potential in other States outside purview of
Chadha Committee recommendations such as Arunachal Pradesh, Bihar, Jharkhand, Patna,
Pondicherry, Manipur, Meghalaya, Eastern U.P. etc. Committee to give report by March
2011
iv. States (already covered and potential) to undertake micro level survey for area expansion
to ensure spread on hub and spoke model and assured irrigation. States to complete
survey by March 2011.
v. States covered under ISOPOM to communicate Oil palm development program for 2011-12
to DAC by November 2010. DAC in turn will approve the Action Plan for 2011-2012 by
December 2010. Funds to be assured by DAC for higher investment in Oil Palm in that year.
vi. Initiate action to strengthen existing seed gardens and set up new gardens. An Expert
Committee should re-assess requirement of sprouts as area expansion has not taken place
in accordance with the recommendations of Chadha Committee and propose future
strategy of expansion/establishment of seed gardens by March 2011. Private sector to be
actively involved in this.
vii. Depute a team to Malaysia to consider possibility of import of germplasm from that
country and study the technique for direct extraction of refined oil.
viii. NRCOP to suggest time line for development of tissue culture.
ix. States should utilize available funds under micro irrigation/RKVY/NREGA to bring irrigation
to existing plantations.
x. Govt. of India to find ways and means to support palm oil mills in Mizoram and Gujarat.
xi. DAC to consider and recommend review of import duty/policy to Ministry of Commerce.
xii. NRCOP to review FFB price fixing formula by March 2011. It should also make
recommendations on possibility of maintaining uniform price.
xiii. Enactment of Oil Palm Act by implementing States on the basis of existing legislation in
Andhra Pradesh/Tamil Nadu, Goa and Mizoram.
xiv. M&T Division of DAC/ICAR to review harvesting machinery available for oil palm in other
countries. Consider import where feasible and develop suitable machinery for indigenous
production.
xv. ICAR to consider and suggest time line on the immediately identified research strategies.

March 2011 is proposed as a timeline for most activities so that the recommendations of
Committees/Expert groups can feed straight into the Mission.
 Annexure-A
Session on Oil Palm held on 4.10.2010
List of Participants

S.No. Name & Designation Official Address

Government of India
1. Shri.P.K.Basu, Secretary (A&C) In Chair
2. Shri Ashish Bahuguna , AS (TMOP) DAC, New Delhi
3. Mrs. Upma Chawdhry, Joint Secretary DAC, New Delhi
(TMOP),
4. Dr. M.S. Punia, Executive Director, NOVOD Board, Gurgaon
5. Smt. Anita Patheja, DAC, New Delhi
Director(TMOP)
6. Dr.A.P.Singh,Dy.Comm. DAC, New Delhi
(TMOP)
7. Sh. D. R. Gurumukhi, Director Dte. of Oilseeds Dev,
Hyderabad
8. Shri. S.K. Jaswal, Dy. Director(TMOP) DAC, New Delhi
9. Shri Satya Babu, Under Secretary (TMOP) DAC, New Delhi
10. Shri Kamal Jeet Singh, Under Secretary(Project) DAC, New Delhi
11. Shri Sudhindhra Kumar, Programmer DAC, New Delhi
12. Sh. T.P. Singh, Asstt. Director (Pulses) DAC, New Delhi
12. Sh. D.P. Singh, Asstt. Director (Oilseeds) DAC, New Delhi
13. Sh. R.S. Chauhan, Seed Officer (Pulses) DAC, New Delhi
14 Shri Ranvir Singh, Scheme Officer (Oilpalm & Janpath Bhawan, New Delhi
Maize)
State Govt. & Others
15. Shri K.N. Ravindran, Managing Director KOTTAYAM, Kerala
16. Shri Alok Katiyar, Director (Horticulture) Chhattisgarh
17. Shri P. Bhattacharjee, Director of Agri.) /Retd. Mizoram
18. Shri R. Vaukunta Rao, Addl. Director (Hort.) Andhra Pradesh
19. Dr. D.L. Maheshwari, Addl. Director (Hort.) Bangalore
20. Shri C. Lal jiLiana, Jt. Director (Agri.) Mizoram
21. Shri M.M. Patel, Jt. Director of Horticulture, Gujarat
22. Shri M.D. Lohakare, Dy. Director Agri./Hort. Maharashtra
23 Shri A. Manoharan, Dy. Director of Agri. Tamil Nadu
Indian Council of Agricultural Research & others
24. Sh. K.L. Chadha, Ex- DDG (Hort.) ICAR, Retired
25. Dr. S. Arvlraj, Director DOPR, Hyderabad
26. Dr. R.K. Mathur, Pr. Scientist DOPR, Hyderabad
27. Shri Sanjay Goenka, Chairman Food, Fate & Fert. Ltd.,
Hyd.
28 Shri Govindan, Vice-President (PGV), Godrej Agro Godrej Agrovet, Mumbai
 Annexure-B

Agenda of the Session on Oil Palm to be held on 4th October, 2010

in Committee Room No.142, Krishi Bhavan, New Delhi

S.N. Topic Time Presenter

1 Opening Remarks 2.30 PM Secretary, DAC and AS(AB)
2 Status of Oil Palm 2.35 – 2.45 PM JS(TMOP)
Development Programme
under ISOPOM

3 An overview of Oil Palm 2.45 – 3.00 PM Dr. S. Arulraj, Director, Directorate of

cultivation in India Oil Palm Research, Pedavegi

4 Industry perspective of Oil 3.00 – 3.15 PM Mr. R.R. Govindan, Vice President,
Palm Sector; its potential; Godrej Oil Palm Ltd.
issues etc.
OR
Mr. Sanjay Goenka, Vice President,
M/s. Foods Fats & Fertilizers Ltd., 3-5-
874/7&8, 2nd Floor, Hyderguda,
Hyderabad
5 Strategy for Oil Palm 3.15 – 3.30 PM Dr. K. L. Chadha
6 Successful implementation 3.30 – 3.45 PM Andhra Pradesh
of Oil Palm Programme in
the State
7 Non-Implementation of 3.45 – 3.55 PM Maharashtra
ISOPOM
8 Potential areas for 3.55 – 4.05 PM Chhattisgarh
extending Oil Palm
cultivation
9 Small but significant and 4.05. – 4.20 PM Mizoram
active

10. Summing Up 4.20 – 4.30 PM DDG(Horticulture)