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PA warns of damage to local oil palm industry if seedling crisis not resolved soon


Jul 30, 2019 (LBO) - The Planters’ Association of Ceylon (PA) sounded the alarm on the escalating 500 million rupees oil palm seedling crisis, warning of dire and irreversible damage to the industry within the next 3 months if definitive action was not taken to reverse the de facto ban on oil palm cultivation and replanting.

Speaking at a media conference convened in Colombo, PA Chairman, Sunil Poholiyadde, explained how the absence of any clear direction from the Government on oil palm cultivation and replanting had created several serious obstacles that have jeopardized the future of Sri Lanka’s single most profitable plantation crop.     

“Sri Lanka’s first oil palm plantations were established over 50 years ago, before privatization and expanded in the decades since. Even at that time there was a firmly established consensus between all stakeholders at the time that diversification and an optimal crop mix would be fundamental to the continuity of the industry.

“These operations were running smoothly in an extremely structured manner, having conformed to every applicable regulation but unfortunately, over the past 4 years, policy making in the plantations sector and oil palm in particular has become increasingly divorced from objective scientific and economic data. In that context, the PA requests that policy makers take firm and decisive action to remove obstacles to this vital project, starting foremost with a green light for replanting seedlings in nurseries,” Poholiyadde stated. 

He further reiterated that a continuing failure by the Government to support this vital endeavor would cause a direct financial loss of at least Rs. 500 million to RPCs. Poholiyadde warned that further disruptions to the planting and production cycle of oil palm would over time result in decreasing yields as older plants reach the end of their productive lifespan, which typically spans approximately 30 years.

This would result in lower revenues, a reduction in economies of scale, and ultimately the total collapse of an entire sector of the plantation industry, which in turn would have negative domino effects for the entire RPC sector.

Major economic benefits and development in jeopardy

Elaborating on the massive economic potential of oil palm, Watawala Plantations PLC CEO, Binesh Pananwala explained how the previously established national target for expansion of oil palm cultivation from just over 9,538 Ha up to 20,000 Ha, was derived from the urgent necessity to substitute Sri Lanka’s estimated Rs. 30 billion edible oil import bill with domestic production.

At present Sri Lanka imports approximately 220,000 Metric Tonnes (MT) of edible oils and fats, while domestic production generates just 19,740 MT of palm oil and 48,805 MT of coconut oil.      

“Given that Sri Lanka is a net importer of oil, we have not even reached the point where we can earn direct export revenue on oil palm. Our local production is solely geared towards meeting local demand, which would otherwise be serviced through importer, which amounts to a massive and continuous drain on foreign exchange. Oil palm is also considered the world’s most efficient plantation crop, producing 4 times more per hectare than coconut, and far greater yield when compared with other popular vegetable oils.

“Therefore in order to bridge the gap between domestic supply and demand using coconut oil, we would have to cultivate 100,000 Ha of coconut, as opposed to just 20,000 Ha of oil palm. The economic argument is therefore unassailable, while all the environmental issues that have been brought up have been totally debunked by objective science. For more than 50 years we have cultivated oil palm in Nakiyadeniya, so this is by no means a new crop for Sri Lanka. Given the massive economic benefits and the total absence of substantiated evidence on negative environmental impacts, the de facto ban on oil palm cannot be defended. “Therefore we urge policy makers to resolve this matter with immediate effect,” Pananwala stated.

The media briefing was concluded with a comprehensive presentation reviewing all scientifically verified data and best practices around sustainable oil palm, debunking myths associated with the crop, delivered by Professor Asoka Nugawela of Wayamba University’s Agriculture and Plantation Management Faculty. 

“When it comes to oil palm, there is no need to reinvent the wheel. There have been many criticisms levelled against this crop, including passionate accusations that it depletes groundwater, consumes exaggerated volumes of water and fertilizer, and a host of other accusations. None of these allegations hold any weight whatsoever. Taking a simplistic approach, we need only look at Malaysia, which has cultivated oil palm for over a century. One of the country’s most intensive oil palm cultivations is actually situated in the very same province that exports water to Singapore – despite the fact that it receives less rainfall on average than what we have in the wet-zones where oil palm is being cultivated in Sri Lanka.

“Despite the obvious lack of substance to these accusations, we have nevertheless carried out detailed studies of oil palm cultivation in Sri Lanka, and this data is freely available and clearly shows that negative environmental impacts of oil palm are essentially the same as any other commercial plantation crop. None of this data is disputed by anyone, yet it is continuously ignored by policy makers and NGO pressure groups.

“Hence we are now in a pathetic situation where our RPCs have invested heavily into the establishment of this essential crop. They followed all proper approvals, had their fields and nurseries inspected by Coconut Research Institute officials and Quarantine Department to ensure that there was no diseases and after all this intensive investment and planning, a sudden ad-hoc decision is taken that prevents them from moving ahead without even offering a proper justification. Now we have an unprecedented waste about to take place within the next three months. It is therefore imperative that someone with authority give the industry a firm green light to recommence planting,” Prof. Nugawela stated.

Meanwhile, responding to queries as to whether or not the PA and its members were considering legal action in relation to the Rs. 500 million loss that will be incurred by them in the next 3 months if they are not allowed to recommence field operations, PA Chairman Sunil Poholiyadde said: “We have still not gone so far as that as we have been given assurances from the Plantations Ministry and the Coordinating Secretary to the President that appropriate action will be taken, hence we continue to wait on the Government to resolve this issue. Unfortunately we have already been waiting for 2 years now, and we simply cannot afford any further delays.”

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