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Thursday January 27th, 2022

Sri Lanka agribusiness firms say govt dithering threatens oil palm expansion

ECONOMYNEXT – Sri Lanka’s regional plantations corporations say the government’s indecisiveness and ill-informed public opposition is threatening a state-approved project to expand oil palm cultivation to diversify their business and meet domestic edible oil needs.

“As agribusiness companies we want to see a crop mix, so our viability and economies of scale can be maintained,” said Sunil Poholiyadde, chairman of the Planters’ Association which represents the listed regional plantations corporations (RPCs).

The RPCs would be forced to write off 400 million rupees worth of plants lying in nurseries and some of which were already flowering unless they are planted immediately, he told a news conference.

The RPCs want to expand oil palm cultivation to 20,000 hectares approved by government, from 11,000 hectares today to diversify away from traditional tea, rubber and coconut whose prices have fallen in the regular commodity price cycle.

The 20,000 hectare extent was decided by government scientists as what was needed to ensure enough production to meet rising local edible oil needs as oil palm yields were higher than that of coconut, and they require less land and labour which were in short supply.

But efforts to plant new oil palms were being blocked by agitation by environmentalists and opposition from local government bodies based on fears that lacked scientific basis, said Binesh Pananwala, chief executive of Watawala Plantations, one of the RPCs trying expand cultivation.

Oil palm has been grown in the island for 50 years and was only recently being expanded, he  said.

High tariffs on vegetable oil imports imposed to protect coconut growers and oil millers made palm oil production profitable but they would still be viable, albeit with reduced profitability even if taxes were removed, Pananwala said.

Officials said the government had repeatedly promised to give the go-ahead to the stalled cultivation program but was yet to make a decision.

Asoka Nugawela, a professor in the faculty of agriculture and plantation management at the University of Wayamba, said opposition to oil palm cultivation was based on fears that lacked scientific basis.

A draft study by the Central Environmental Authority, on which much of the opposition based, was not signed by four of seven members of the panel which prepared it and contained several wrong conclusions, he told the same news conference. 

Oil palm extent was only three percent of total land area under plantation crops and posed no threat to traditional crops like tea, rubber and coconut nor used more water, depleted the ground water table or compressed soil as feared, he said.

Oil palm was being planted only in rubber estates whose trees were too old and not by cutting virgin forest as done in other countries, he said.
(COLOMBO, 25 July, 2019)


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