Pularao Darvathu and thousands of other farmers in the south Indian state of Telangana are working hard to grow oil palm as their region attempts to add more land over the next four years to the controversial crop across the country than in decades.
Telangana plans to plant 2 million more acres of palm oil during the next four years, and it will take tremendous steps to meet this goal, including building huge dams, irrigation canals, and importing millions of sprouts. Farmers like Daravathu are being encouraged to switch to palm oil due to generous government subsidies and the potential for huge returns compared to other crops.
The recent rise in palm oil prices has resulted in more than double the price of bunches of fresh fruits sold by farmers to oil mills. Palm oil plantations in India were only permitted on less than one million acres, mainly in coastal Andhra Pradesh, the state from which Telangana broke away in 2014.
This was due to price volatility, water scarcity and a gestation period of about four years. However, Telangana, which is located in an interior of the Deccan Plateau, is now keen to become India’s main palm oil hub, with an area target that would move the state from its current low base to the fifth largest globally. The oil will be carried to the palm producer. ,
The initiative could reduce India’s massive imports of vegetable oil, which cost the country a record $18.9 billion in 2017 and increase the country’s trade deficit. Two-thirds of India’s vegetable oil needs are met by imports, which are about 14 million tonnes per year and include about 8.5 million tonnes of palm oil. The federal government is keen to boost production of palm oil in an effort to cut those costly imports, which this year’s high inflation caused major supplier Indonesia to suddenly cut supplies.
To meet its needs, India imports less than the 300,000 tonnes of palm oil that Indonesia, Malaysia and Thailand now produce. According to Chava Venkateswara Rao of Godrej Agrovet Ltd., the largest producer of palm oil in the country, Telangana will bag a great deal even if it can cultivate palm oil in only 1 million acres and produce 2 million tonnes of palm oil. As of last year, the nation added about 35,000 acres of land planted in palm oil per year.