Mr Prasad, an engineering graduate, gave up his job to take up oil palm farming near Eluru in Andhra Pradesh's West Godavari district. But he is one of the farmers who is dejected that oil palm plantation isn't remunerative. Mr Prasad is one of those who seeks technical and support for cultivating oil palm.

So, when the news of the Government's allocation of Rs 300 crore in the Union Budget was announced, he was happy, terming it as “a welcome and heartening feature”.

“The Union Government should focus more on research and development rather than area expansion only,” said Mr Prasad. Andhra Pradesh leads in the country in oil palm cultivation and within the State, West Godavari district tops.

The Centre had introduced the oil palm crop on a pilot basis in the nineties and subsequently many small farmers took up cultivation, attracted by the subsidy component.

They are now facing a number of problems and there are no R&D solutions available, even though the Government has established a national research centre on oil palm near Eluru. “We need practical, workable solutions at the farm level. Research must reach the farm,” Mr Prasad said.

Small farmers do not have the resilience to withstand price fluctuations and “the Government should take steps to help them.”

Irrigation subsidy

There is also a demand to revise guidelines to extend subsidy on drip irrigation to 15 acres instead of five acres.

“Oil palm needs drip and sprinkler irrigation. Subsidy for oil palm cultivation is given for 15 acres, but a ceiling of Rs 50,000 has been set for drip irrigation subsidy. That is sufficient only for five acres. It should now be enhanced in view of the increased budgetary allocation,” Mr Prasad said.

Mr O.P. Goenka, Technical Director of Foods, Fats and Fertiliser, said that the initiative to encourage oil palm cultivation would go a long way to reduce India's dependence on imports for the oil.

“More than 10 lakh hectares of land has been identified as suitable for palm cultivation, as against which we hardly have one lakh hectares under coverage. With each hectare having the potential to yield between 3.5 and 4.5 tonnes of oil, we can bring down our imports and save foreign exchange,” he said.

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.

Pricing issues

One of the main problems faced by farmers is the price fluctuations of fresh fruit bunches (FFBs) of oil palm, fixed by the State Government on the basis of international crude palm oil prices.

Farmers also complain that they are encountering problems in growing inter crops in oil palm to increase the returns and make the cultivation sustainable.

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