OBJECTIVES OF NMEO – OIL PALM

 Reduce dependency on Oil Palm Imports, estimated at ₹ 75000

Cr

Highest Oil yield per unit area (1-2 tons/acre) which is 8-10
times more than the other Oil seed crops

Liberalised Grants from Central & State government

MOU among Farmers, State Government & Corporates

Oil palm helps in development of green cover thereby helps in carbon sequestration.
One hectare of oil palm absorbs 20 tons of CO2 per annum and releases 22 tons of O2

National Mission on Edible Oil – Oil Palm

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 SCOPE FOR FINANCING: BACKWARD & FORWARD LINKAGES
Processing / Blending
Financing transportation, sorting and
grading centers, palm oil processing and
blending units.
Oil Palm growers
Long term loan for individual oil palm growers.
Finance may include cost of land development,
plantation, maintenance, irrigation, harvesting etc.

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06 02
Farm equipments Intercropping
Scope for financing Custom Hiring Short term loan for intercropping of
Centre/Farm Machinery Bank in Oil Palm Banana, Pineapple, Cocoa etc. as the Oil
clusters. palm starts yielding after 3-4 years.
05 03
04

Vermi-Compost Units Seed garden / Nursery

Financing vermi-compost units at Extending loan for establishing Oil palm Seed
oil palm fields to Oil palm growers gardens to individual farmers/SHGs/FPO etc.

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THE FINANCING METRICS

Cost of Cultivation Farmer Contribution/ha

Rs. 3,01,040/- Rs. 2,16,600/-
.

CULTIVATION GOVERNMENT BANK FINANCE

AREA AVERAGE SUPPORT FARMER
COST CONTRIB:

Proposed Area: 5 Years Government Support/ha Bank Finance

North East : 3,28,000 ha Rs. 84,440/- Oil Palm Loan : Rs. 2,16,600 per
Rest of India : 3,22,000 ha ha

Total : 6,50,000 ha

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POTENTIAL INCOME AND EMPLOYMENT GENERATION
* in ₹ crore
Bank loan over 5 yrs, Potential Potential income Approx. Intt. Subv.
No of Units* Total Financial
State under NMEO-OP employment generation after by State Govt. p.a
(1 Unit = 1 ha.) outlay
after grants generation (Nos) production starts (Avg for 5 yr.)

Andhra Pradesh 1,12,000 3,376 2,426 2,24,000 2,240 132

Chhattisgarh 16,400 494 494 32,800 328 16

Gujarat 12,700 383 383 25,400 254 12

Karnataka 19,300 582 582 38,600 386 22

Odisha 10,500 316 316 21,000 210 13
Tamil Nadu 18,500 558 558 37,000 370 20
Telangana 1,25,300 3,777 3,777 2,50,600 2,506 150
Goa 800 24 24 1,600 16 1
Kerala 6,500 196 196 13,000 130 6
Total 3,22,000 9,705 8,755 6,44,000 6,440 371
Total fiscal cost to all State Govt. together: Rs. 371 crore p.a (Avg. for 5 years)
*Target for first 5 years 5/8
 CREDIT ENHANCEMENT MODELS

₹ 371 crores p.a

Contract farming arrangement under the Interest subvention by State govt. during
patronage of respective State govt. to gestation period (4 to 5 yrs) so that farmers
ensure buy-back don’t have any interest burden

Oil Palm plantation may also be in So, to facilitate Bank finance, respective State
waste/barren land. In many States, owners of govt. may allot land to individual farmers,
such land are Forest or Revenue departments SHGs, FPO, Co-operative etc. on long term
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 SUPPORT FOR PROCESSING UNITS

Unlike other oils, palm oil is taken

from fresh fruit and hence extraction
. process involves many unit
operations.

. Fruits have to be processed within

24 hours from harvest
Cost of 5 MT/Hr Oil Processing Units: ₹ 10 Crores
. For a 5.0 MT/Hr. plant the total
investment is approx. Rs. 10 crores Margin Amt. by borrower: ₹ 3 to 3.25 Crore
(approx. 30 %)
. For Andaman & Nicobar Islands,
Govt. provides assistance of 50 % of Bank Finance: ₹ 6.75 to 7 Crores
cost, limited to ₹ 5 Cr for a unit of
5.00 MT/Hr. for new oil palm mill. Debt to Equity: 2.07 to 2.33

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Annexure - Increased subsidies under NMEO (OP) for Cultivation
S. No Sub Components
1 Planting Material
Management up to gestation
2 60:40
period (4 years)
3 Inputs for intercropping
4 Establishment of Seed Gardens
5 Establishment of Nursery
6 Drip irrigation
Bore well/ Pump set/water
7 harvesting structure/
Vermi compost unit
Sharing Pattern Increased Assistance
For purchasing of planting material, during 1st year, ₹ 20,000/ha indigenous & ₹ 29,000/
60:40 ha imported (including transport cost) will be provided to the farmers for entire
land holding.
During gestation period for 4 years, ₹ 42,000/ha will be provided to farmers in General
States & ₹ 50,000/ha for Andaman & Nicobar Islands for inter-cropping and maintenance
60:40 cost.
One time assistance as subsidy for necessary infrastructure & setting up of new
seed garden (capacity 10.00 lakh seedlings per year) having at least 15 ha area will
be provided as per table given below:
60:40
One time grant (₹ /garden) Revolving fund
₹ 40.00 lakh for all States except North East ₹ 40.00 Lakh for all States except North East
₹ 50.00 lakh for Andaman & Nicobar Islands ₹ 50.00 lakh for Andaman & Nicobar Islands
For nursery ₹ 40.00 lakhs / nursery of 10.00 ha with 1.00 lakh seedling capacity for
60:40
general states.
60:40 As per PMKSY norms
As per MIDH guidelines
60:40
Solar pumps: As per PM-KUSUM norms
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Annexure - Increased subsidies under NMEO (OP) for Cultivation
S. No Sub Components Sharing Pattern Increased Assistance

Assistance as under Tools ₹ per unit

Cutter 2500
Wire Mash 20000
8 Harvesting tools 60:40 Motorized chisel 15000
Potable ladder/polls 5000
Chaff Cutter 50000
Tractor Trolly 200000

Custom hiring centre cum FFBs harvester group by processors/ State/ SHGs/
Custom hiring centre FPOs/ Registered societies will be created in each states
9 60:40
cum Harvester Groups One time grant for ₹ 25.00 lakh per unit for equipment, tools, training, contingencies,
maintenance etc.

Farmers Training: ₹ 30000/- per training for a batch of 30 farmers for 2 days
10 Farmers & Officers training 60:40
Officers training ₹ 40000/- per training for a batch of 20 officers for 2 days.

New Component
Replanting of old oil palm After 27-30 years of age one time grant 50% of the cost @ ₹ 250/- per plant (uprooting,
11 60:40
garden replacing, and digging of new pit) will be provided for replanting of old gardens
10% as flexi-fund to provide flexibility to States to meet local needs and requirement within
12 Flexi fund 60:40 the overall objective of oil palm promotion

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