palm oil

The government is pushing palm oil citing its benefits for smallholders. On the ground, however, this push is perpetuating the local elite’s capture of community lands for cash crops.

Seed money: Farming elite more keen on India’s palm oil push than smallholders

Part Two of CarbonCopy’s series on palm oil focuses on how big hitters in states such as the North East are claiming community lands as government lands for cash crops such as palm oil. Read the Part 1 here.

Chandan Kumar Sharma, a senior professor at Tezpur University’s sociology department has been watching the patterns of elite farmer interest in palm oil play out.

According to him, oil palm in the North East is taking the same trajectory as previous plantations of rubber, timber and tea.
Each of these booms saw large plots of community lands get converted into private property. This time, too, as he wrote in an essay titled The New Land Settlement Act in Arunachal Pradesh, “The emerging tribal elites, including politicians, bureaucrats, contractors, businessmen, etc, are… engaged in large-scale usurpation of the community land for various purposes, especially for cash crop plantations.”

Take Namsai (covered in Part 1 of this series). “This land doesn’t belong to the deputy CM,” he said. “What Arunachal is seeing is the local elite browbeating community elders—or forming a nexus with them—to take over community lands.” They take this land and invest in long gestation crops, he said. “The outcome is a permanent occupation of land and space.”

NE states, said Sharma, have begun claiming community lands as government lands, and begun pushing policies for land-titling. In 2018, Arunachal began conferring land property rights to individuals. Mizoram has been running schemes like NLUP to wean people off jhum farming. In Assam, wastelands and wetlands are being claimed for cash crop cultivation. 

Within that context, oil palm is one of three vectors along which land ownership is changing. 

Travelling along the south bank of the Brahmaputra, this reporter heard multiple accounts of politicians buying up farmlands. “Many politicians and businessmen are buying land in Assam,” agreed Sharma. “They are now much richer than they were before. And they know how to speculate. They know where a highway will come, where a bridge will come.”

Nor are they the only ones buying land. “Even outsiders are buying our land,” said Sharma. In tandem, Assam is also seeing a spike in forest evictions.

CarbonCopy asked Sharma if these patterns are related. He didn’t think so. “There is no connection between oil palm, forest evictions and land buys by politicians,” he said. “They will not want to tie up their land for 30 years.”

What is being taken for oil palm, he said, is community land.

And the winner is…

A contradiction stands before us.

The government is pushing palm oil citing its benefits for smallholders. On the ground, however, this push is perpetuating the local elite’s capture of community lands for cash crops.

The other big winner is edible oil companies. At this time, India’s edible oil market is divided between growers, millers and importers of edible oil. Domestically grown oil palm will reduce the dependance of companies like Patanjali on edible oil importers. As recently as 2023, just 10% of Patanjali’s palm oil requirement was being met through its own plantations. Over the next 6-7 years, the company wants to hike this percentage to 70%

At such a time, the company’s exposure to global price fluctuations will come down. 

At ordinary times, an economic argument can be made against planting oil palm. Given India’s smaller plantations, lower yields and low duties on imported palm oil, domestic palm oil should be costlier than its imported equivalent.

The new oil palm push changes that. It transfers large swathes of oil palm investments—including financial support to smallholders till 2037; the minimum support price; maintenance of saplings for the first three years; expenditure on fertilisers and seeds—to the government. In contrast, as Sanjeev Asthana, the CEO of Patanjali Foods had told CarbonCopy, plantations in countries like South-East Asia follow a cap-ex intensive model. “Investments go as high as $8,000 to $10,000 a ha,” he had said. 

In India, with such costs being borne by the government, it will get easier for companies like Patanjali to compete with rival plantations elsewhere in the world. The gains for India are more nebulous.
India wants to plant oil palm on a total of 840,344 ha in the North East—and ultimately spread India’s oil palm plantations to 10 lakh ha. By the end, as a PIB press release says, “The production of Crude Palm Oil (CPO) is expected to go up to 11.20 lakh tonnes by 2025-26 and up to 28 lakh tonnes by 2029-30.”

Read that again. 1.12 million tonnes by 2025-26. And 2.8 million tonnes by 2029-30.

To put these numbers in perspective, India’s current palm oil imports stand at 9.79 million tonnes. In other words, even after converting a region the size of Sikkim to oil palm, India’s import dependance will remain. All the more so because the country’s demand for edible oil will have further increased by 2030.

In states where large farmers plant oil palm, other consequences follow. “Earlier, community elders used to give out land per family size,” said Sharma. “But now, elites are telling locals: let me do this and you work in my fields. Slowly, autonomous farmers have become wage labourers on their own land.”

This is also where ecological costs come in. Rainfall cannot support oil palm around the year. And so, between a large farmer growing cash crops and a smallholder, access to groundwater will tilt towards the rich. As it is, India is pushing oil palm in the North East at a time rainfall in the region is getting increasingly undependable. In districts like Goalpara—the Rabha Autonomous District Councils (ADC), more accurately—thoughtless imposition of rubber and oil plantations on lands traditionally used for grazing has also triggered a rise in human elephant conflict.

Elsewhere in the country, like the Andamans, local administrations have tried to use forestlands for oil palm. In Mizoram, the oil palm push resulted in local clearing forests—even in the core of Dampa Tiger Reserve—and planting oil palm there. 

Planting the wrong seed?

That is the calculus of this moment. 

Instead of trying to grow oil palm locally, the country should have focused on oil seeds and imported oil palm to make up any deficit. 

What successive governments have done is something else. They have supported an imported oil seed at the cost of India’s indigenous oilseeds—even though such a push does little to reduce India’s import dependence. “I have not seen such support for any other crop,” agreed Devinder Sharma. “Not even for wheat and rice. Certainly not for any of India’s nine domestic oilseeds.”

One fallout: the continuing immiseration of India’s oilseed growers—which manifests itself as political agitations like the patidar protest. A similar process is now unfolding in the North East with oil palm looking set, like previous plantation crops, to reshape land relations. It will take community lands from people at a time climate stresses are rising, making them more dependent on farm labour markets. The outcome is one where the north-east sees a drop in both ecological and social resilience before climate change.
At this time, with oil palm, the country has an interregnum in which to course correct. Rattled by their past experience, smallholders are staying away—preferring more familiar crops like rubber and arecanut. Given their reluctance, can oil palm meet its targets through large farmers alone? Jadhav doesn’t think so. “This cannot be done if small farmers don’t participate,” he said, referring to Namsai. “Big farmers will account for maybe 2,000-3,000 ha at the most.”

This interregnum has to be used. A more just model of development has to be created. In the meantime, India’s oil palm push shows why the country needs to expand the purview of its environmental clearance process. Crops like oil palm should be subjected to a cost-benefit analysis as well. 

Read the Part 1 here.