Godrej Agrovet Ltd (GAVL) is unhappy with the way the government has gone about the oil palm development programme; the company thinks this is a wasted opportunity. While Andhra Pradesh had gone and implemented the programme and accounts for 60% of all acreage, states like Maharashtra have done little to this end. Godrej is the among the largest crude palm oil producers.
The business operates on a command area model with state governments allocating specific territories to corporates for the development of oil palm plantations. Growers are required to sell the entire production of fresh fruit bunches (FFB) at a predetermined price linked to output price set by the government. The companies then process them at their oil mills.
GAVL has been allocated territories with a potential of over 1,70,000 hectares of palm plantations in Andhra Pradesh, Goa, Mizoram, Orissa, Tamil Nadu, Karnataka and recently Gujarat. The area covered so far has been 35,000 hectares and GAVL MD, Balram Yadav blames this on the poor implementation of the project by the government. GAVL has three mills at Iluru in Andhra Pradesh, Trichy and Goa where in processes 1,20,000 FFB.
Oil palm plantations have a three year gestation period and farmers need support in the first three years, which under the PPP model, was to be provided for by the government. This works out to Rs 30,000 per hectare over three years but these funds are not being released, Yadav said.
?The government is putting up constraints by not releasing the subsidy. We can do 10 times of what we are doing today,? Yadav said.
India has the potential to develop oil palm to ensure that the country becomes self sufficient in edible oil but the country relies more on imports from Malaysia than spend on this programme, points out Yadav. As a result, the target of one million hectares has not been met and the country continues to foot a large import bill.