Agri Business

Oil palm competes with arecanut, rubber in Karnataka

AJ Vinayak Recently in Shivamogga/Chikmagalur | Updated on March 12, 2018 Published on September 30, 2015



“It is a crop from which I get a salary every month,” says GN Ratnakara, an oil palm grower in Badagabail village of NR Pura taluka in Chikmagalur district. 

Of the 16 acres he owns, Ratnakara has planted oil palm on about five acres.

Diversification into oil palm has borne fruits for Ratnakara, who now annually harvests around 30-40 tonnes of fresh fruit bunches (FFBs) from each hectare that earns him an income of around ₹3 lakh.  

“Oil palm was planted as an inter-crop to prevent the fall of arecanut trees from wind. Now, oil palm is the better crop for me,” says Gopalakrishna Udupa, a farmer in neighbouring Shivamogga.

Udupa, President of Shivamogga-Chikmagaluru Oil Palm Growers’ Federation, was also among the few farmers who took up oil palm way back in 1994 under the pilot project of the Karnataka government.

Though oil palm was introduced three decades ago in the State, it has not made significant inroads and is yet to catch farmers’ interest despite the governments, both Centre and State, providing huge subsidies to promote it, while ensuring that the produce is bought back by the designated processing entities at an assured price. 

Arecanut rules

“Though oil palm has a vast potential, a large section of the farmers in the region see a potential in competing crops such as arecanut and rubber,” says H Vishwanath, Deputy Director of Horticulture, Shivamogga.

For many farmers, the price of arecanut is still attractive though it has come down from its highs a few months ago. 

The farmers’ preference to go for a lucrative crop such as arecanut, sugarcane, banana and coconut is reflected in the acreage under oil palm, which has either been stagnant or seen a drop in some districts.

In Karnataka, total oil palm acreage is 13,000 hectares. In Shivamogga, the oil palm acreage is 728 hectares, lower than 1,240 hectares in 1992. Similarly, in Chikmagalur, it stands reduced at 297 hectares against 643 hectares that was planted since 1992.

Untapped oil palm

There is a huge potential for oil palm considering that India imports edible oils worth ₹65,000 crore, whereas the domestic production helps meets only 50 per cent of the requirement, says T Shivananda, Assistant Director of Horticulture (Oil Palm Development) in Shivamogga.

Comparing the yield from various crops producing edible oil, Shivananda said the yield from a hectare of coconut farm is 1.2 tonnes, sunflower is 0.86 tonnes and groundnut is 1.06 tonnes. 

Compared to these commodities, the yield from a hectare of oil palm plantation is 4-5 tonnes, he said. After fourth year of planting, oil palm can be harvested throughout the year. With this, the farmer is also assured of a monthly income, as the amount is directly credited to the account of the farmer without the interference of any middlemen. 

Govt support

The State fixes a minimum support price (MSP) for the FFBs every year and currently it stands at ₹9.22/kg.

While the agency, which is assigned the task of buying the produce from farmers and processing them, credits the market price to the bank accounts of farmers, the government pays the balance amount under the MSP.

The MSP for oil palm was ₹7,500 a tonne in 2012-13, ₹8,500 in 2013-14, and ₹9,220 in 2014-15. Many farmers were of the opinion that though the cost of cultivation of competing crops such as arecanut and rubber is more, they get the money immediately when they sell it to the local trader.

In oil palm, the amount is credited every month to the bank account of the farmer.

Because of the bulk amount they get in seasonal crops they prefer that, though oil palm assures monthly income throughout the year, opined many growers.

Ramesh from Bhadravati, who has taken up oil palm as a mono-crop on 12 acres of land, said that arecanut has no other use than chewing.

Still many people are going in for its cultivation because of the good market rate for the commodity.

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Published on September 30, 2015
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