Call to lift palm oil ban in Sri Lanka

Several farmer organisations including Haritha Derana SME Foundation, private agro companies are once again making a strong plea to the Government to lift the palm oil plantation ban which will result in reactivation of the plantation sector and help to save billions of rupees spent on palm oil imports.

At present, Sri Lanka consumes 220,000 metric tons of palm oil. Only 12 percent is produced locally. In 2023, the import bill associated with palm oil was approximately US$ 300 million that we could substitute.

Ironically Sri Lanka is the only country in the world to ban Oil Palm while Sri Lanka’s nearest neighbor India is expanding Oil Palm cultivation exponentially.

Some of the Haritha Derana Foundation members

The plea is also supported by one of the largest palm oil growing, consuming and exporting countries Indonesia who says that they will support the growing of Palm oil in Sri Lanka and provide necessary agro support towards this as Indonesia is reaping huge economic benefits from palm oil.

Currently, Indonesia produces more than 40 million metric tons of palm oil per year/and generates 4.5 percent of its GDP and provides employment to 3 million people/ Similarly, Malaysia’s palm oil industry produces 18.5 million Metric tons that contributes between 2.5 percent of its GDP.

During a recent workshop Haritha Derana, an agricultural community association, handed over a letter to the President’s Advisor on Food Security Dr. Suren Batagoda, urging the Government to remove the ban imposed on cultivation of palm oil in Sri Lanka.

Though the former President Mahinda Rajapaksa approved and egged on the palm oil cultivation the next Government headed by Maithripala Sirisena based on a report by a handful of ‘pressure groups’ arbitrarily in 2019 ordered to refrain from growing the crop much to the dismay of plantation companies. By this time the regional plantation companies (RPC) on the encouragement made by the provisional Government had invested over Rs. 500 million in palm oil nurseries. Today this has proved to be a ‘waste’ and plants in these nurseries are not palatable.

With a history dating back to 1968, oil palm plantations in Sri Lanka have served the nation for over 54 years, and it is reported that there is no proof of soil degradation and scarcity of water resources in these estates. However, the next President Gotabaya Rajapaksa further reinforced the proscription of palm oil plantations in April 2021 and demanded uprooting of oil palm trees and replanting such areas with rubber trees. In both these instances the plantation sector side was not given a hearing,” an official from the Haritha Derana Foundation said.

“We are made to understand with the new Agriculture Minister Mahinda Amaraweera the present Government is looking at removing this ban and allowing plantation of palm oil once again.”

“It is a well-known fact that productivity of oil palm is almost 4 times that of coconut oil and hence it will take many years for the country to increase coconut oil production, which will also require more land.

“Palm oil consumption worldwide is predicted to grow at the rate of 5.5 percent annually, accounting for more than 70 percent share of the food and confectionary industry.

“Sri Lanka has a great potential to save precious foreign exchange and create green jobs for the country’s rural workers by expanding palm oil production, “the Association said.

They point out that today growing palm oil is the most profitable ‘agri cash crop’ as it generates an average profit of Rs. 720,000 per hectare per year. This passed the coconut (Rs. 315,000), rubber (Rs. 90,000), and tea (Rs. 600,000).

“RPC employees in the oil palm sector currently receive an average income in excess of Rs. 100,000 per month/ It is a tragic waste/that we have such a lucrative option available to us in a time of such profound economic hardship and we continue to deny more Sri Lankans from having access to similar opportunities.”

“In addition, since palm oil plantations need less labour, workers can also engage in other business 24 hours per day.”

PA Chairman’s view

Chairman of Planters’ Association of Ceylon (PA) Chairman, Senaka Alawattegama at their 169th AGM said that when traditional crops like tea or rubber become less suitable for certain lands, plantations should transition to cultivating other valuable crops. (Crop Diversification)

While tea and rubber have traditionally played significant roles in Sri Lanka’s economy, it is also past time/that the plantation sector/be given the green light to diversify its product offerings

“Regional Plantation Companies require the flexibility to determine land-use policies based on their individual economic viability.”

He said that the oil palm cultivation has been a subject of heated debate and unfounded controversy!

“This is a sector which has been hampered by rampant, politically motivated misinformation/ despite it having the greatest potential to mitigate and even reverse the damage that is being done to the plantation sector as a whole.”

India example

The Indian Government too is currently engaged in a major palm oil plantation drive to reap benefits from this sector.

Whilst the ban of oil palm still remains in Sri Lanka, Prime Minister Modi has now mandated India to plant up to 3.0 Mn hectares, as a strategy of import substitution. India is one of the largest consumers of palm oil in the world and its demand for palm oil will double by the year 2030.

The Indian Government’s stand is that the demand cannot be sustained by increasing imports and therefore has already taken a decision to cultivate three million hectares with oil palm.

This is a good case study for Sri Lanka, as the vegetable oil demand keeps increasing day by day.

APOA supports palm oil cultivation

Asian Palm Oil Alliance (APOA) continued to extend their fullest cooperation to POIA to address the challenges faced by the oil palm industry in Sri Lanka. A good representation of Exco members attended the quarterly meeting held in Malaysia in March this year.

Dr. Shatadru Chattopadhayay and Dr. Suresh Motwani of APOA visited Sri Lanka in June this year and engaged with the stakeholders in the Oil palm industry. Once again, they engaged with members of the POIA Exco and met Sri Lankan Government officials.

They had very fruitful and cordial meetings throughout their stay. The Press conference held during their visit was attended by many journalists and there were no negative sentiments shared by the media personnel.

The Solidaridad Continental Supervisory Board met in Colombo in October 2023. POIA Exco members met them, and they pledged their continued support to the POIA and agreed to make representations to the Sri Lankan Government officials and the political leadership about the myths and truths of oil palm and also assist Sri Lanka in other areas.