Andhra Pradesh leads in oil palm cultivation in the country, but till now only the south coastal districts of East Godavari, West Godavari and Krishna were in the forefront. Now farmers in the north coastal districts are also taking to cultivation of the crop on a large scale. The Union Government is offering substantial subsidy on oil palm cultivation to reduce edible oil imports.
Three oil palm processing plants have been established by private companies in the districts of Srikakulam, Vizianagaram and Visakhapatnam, catering to the requirements of a section of oil palm farmers in the region. The processing capacity of the plants ranges from 1 lakh to 5 lakh tonnes. Besides these companies, Agro Cooperative Corporation, Foods, Fats and Fertilizers, Palmtech and Ruchi Soya also have tie-up arrangements with oil palm farmers in different mandals in the districts.
Oil palm plantations are spread in 4,000 hectares in Visakhapatnam district, 6,000 hectares in Vizianagaram and 2,000 hectares in Srikakulam. On the average, 25-30 tonnes of oil palm fruit per hectare can be harvested while the oil content after processing of the fruit is 5 tonnes per hectare. The estimated average yield of oil palm fruit in the 12,000 hectares in the region is 300,000 tonnes of fresh fruit bunches and 60,000 tonnes of processed oil.
Mr G. Prabhakara Rao, additional Director of Horticulture, said that the Government was encouraging farmers to grow oil palm as the oil yield was much more in comparison with groundnut and other crops. Therefore, oil palm would require less land. The average life of the plant is 30 years and from the fifth year onwards the plant starts producing matured fruit, generating income for the farmers.
The Government has increased incentive from Rs 23,000 per hectare to Rs 30,000 from this financial year. The farmers also get a subsidy of Rs 10,000/hectare and free seedling distribution up to 15 hectares. The incentives include Rs 30,000/hectare for four years and Rs 7,000/hectare to farmers for growing vegetables as an inter-crop in their oil palm plantations. Besides, Rs 15,000 is also given for setting up a compost yard for producing organic manure and Rs 50,000 financial assistance to SC and ST farmers for sinking borewells and Rs 10,000 for purchasing agriculture pumpsets.
The private companies have a buyback arrangement with the farmers and farmers have to take the crop to the collection centres. From there, the company transports it to the processing plant. The processed oil is sent to edible oil refineries at Kakinada for further purification. There are several edible oil refineries in Kakinada which refine domestically produced oil from these processing units besides imported crude palmolein from Malaysia.