Oil palm, introduced in the coastal districts of Andhra Pradesh two decades ago under irrigated conditions, is leaving a bitter taste in the mouths of small farmers, especially in West Godavari district which leads in terms of acreage and production.

The crop was first introduced in the early nineties by the Department of Bio-technology on a pilot basis in some of the coastal districts, including West Godavari, and subsequently private companies such Godrej, MAC and Palmtech were allotted zones to set up processing units and to buy back the produce from the farmers.


Many small farmers, especially in West Godavari, East Godavari, and Krishna took to oil palm cultivation enthusiastically in the late 1990s, enticed no doubt by the heavy subsidy component. The Union Government also sanctioned a National Research Centre for Oil Palm and it was set up at Pedavegi near Eluru in West Godavari district. However, the travails of the farmers began a few years afterwards as the plantations were growing older.


At present, it is roughly estimated that two lakh hectares of land is under oil palm cultivation in the coastal districts of Andhra Pradesh, with West Godavari accounting for 42,000 hectares, the lion's share. Andhra Pradesh leads in oil palm cultivation.

One of the main problems faced by farmers is the fluctuations in the prices of fresh fruit bunches (FFBs) of oil palm, fixed by the State Government on the basis of international crude palm oil prices. Till recently, the prices hovered in the range of Rs 3,000-Rs 4,000 a tonne of FFBs and unable to continue cultivation with such low prices, several farmers resorted to uprooting of palms. Of late, the price has risen to over Rs 6,000 a tonne of FFB. But not much enthusiasm is visible among farmers. They do not have the resilience to withstand price fluctuations based on international market conditions.

Mr Prasad, an engineer who quit his job and took up oil palm cultivation near Eluru, says that according to the calculations of the National Research Centre on Oil Palm at least Rs 8,000 a tonne of FFB should be paid, if cultivation were to be viable. “That is a far cry. We do not even know how long the present price of Rs 6,000 or more a tonne will last,” he said.

He also complains that there is very little technical and research support and the small farmer is left in the lurch by all government agencies. “One of the major hassles is harvesting. The palms are growing very tall, especially in the irrigated conditions, and harvesting is becoming cumbersome and costly. There is an acute labour scarcity and farmers are at a loss,” he explains. He also says there is no prescribed scientific regimen for water and fertiliser application.

Mr M. Venkateswara Rao, who recently uprooted oil palm crop in four acres at Sagipadu village in the district, says it is no longer economically viable to carry on oil palm cultivation. The plantation was 20-year-old. “It was painful and costly to uproot the palms but I had no choice. I am searching for an alternative,” he said.

Mr M. Ramakrishna of the same village says he is also getting ready to remove oil palm in four acres and cultivate other crops such as maize. He cites low prices, harvesting problems and the lack of support from the government agencies or the factories as the reasons for the extreme step.

Farmers also complain that they are encountering problems in growing inter crops in oil palm to increase the returns and make the cultivation sustainable. There is no technical and research assistance from the State Agriculture Department or the National Research Centre.

There seems to be a growing realisation that the crop is perhaps not suitable for the small farmers.