Govt chalks out plan for palm growers

Oil palm growers in the state will now earn more per tonne of fresh fruit bunches (FFBs). The state horticulture department has worked out a new formula in consultation with growers and the oil palm processing industry.

According to the new formula, oil palm processors in the state will now have to pay 12 per cent (instead of the earlier 10 per cent) of the net crude palm oil (CPO) price to growers.

The Andhra Pradesh Oil Federation (AP Oilfed) quotes the CPO price every quarter beginning November 2005. The present price of FFB per tonne stands at Rs 3,800.

Earlier, both oil palm growers and processors were a dissatisfied lot, the former complaining about insufficient pricing and the latter about the low oil recovery rate. A 16 per cent oil extraction rate is considered optimum.

Speaking to Business Standard about the growth of oil palm cultivation in the state, Anil Punetha, commissioner of horticulture, said, "Oil palm cultivation in the state has been given a big impetus. While the Government of India's (GOI) target was to extend the acreage by 4,000 hectares for 2005-06, we have set a target of 8,000 hectares, and have already brought 6,000 hectares under cultivation."

Last year, the horticulture department extended the acreage by adding 6,000 hectares against the GOI's target of 4,000 hectares. The total area brought under oil palm cultivation in the state is about 43,000 hectares while the actual potential as determined by the state horticultural department is four lakh hectares.

"We are targeting to bring 15,000 hectares more in the next fiscal," said Punetha.

Adding that area expansion was dependent on subsidy, Punetha said that oil palm cultivation was being encouraged by offering subsidies to farmers under various categories to the tune of Rs 23,000 per hectare. The state's contribution is 10 per cent while the remaining is being funded by the Union government.

Another major decision to boost oil palm cultivation taken by the state government last year was to bring oil palm crop also under the AP Micro Irrigation Project (APMIP). Under the scheme, oil palm growers are offered a subsidy of Rs 50,000 per hectare to install drip irrigation system.

"Mandals in districts such as Chittoor, Guntur and Prakasam have been allocated to processing industries but they have been so badly affected due to drought and lack of sufficient ground water that oil palm cultivation is not possible," he said.

Of the 43,000 hectares land brought under cultivation, a total of 9,000 hectares has been brought under drip irrigation.

There are at present nine oil palm processing units with a total crushing capacity of 79 metric tonnes per hour.

The state government has given licence for setting four more units. While one promoted by AP Oilfed at Khammam is likely to operate from March 2007, the other three units are to be set up at Srikakulam, Vizainagaram and Visakhapatnam by March 2008.

IN THE OFFING

Oil palm processors will now have to pay 12% instead of the earlier 10% of the net crude palm oil price to growers

Of the target 8,000 hectares, 6,000 has already been brought under cultivation