PA renews socio-economic push to reinstate palm oils

THE Planters’ Association of Ceylon (PA) yesterday renewed its call on the Government to urgently reverse the ban on oil palm cultivation, saying it is key to boosting growth in the plantation industry and raising worker incomes.

- 

• Says policy reversal and 2021 ban destroyed Rs. 550 m worth seedlings and placed Rs. 23 b investments at risk

• Palm oil gave 49% margins, sometimes half of RPC profits, before sudden prohibition

• Oil palm wages double that of tea and rubber, plantation households gained Rs. 2.5 b annually

• After ban, over 5,000 direct jobs and 21,000 dependents lost steady income

• Imports now fill edible oil demand, draining $ 35 m annually

• Palm oil uses only 6% of land to produce 40% of global vegetable oil

According to the Association, following the Government’s abrupt ban on oil palm cultivation in 2021, this lucrative crop that was once considered the nation’s most valuable strategic diversification instead became a symbol of policy inconsistency and lost economic opportunity.

Oil palm cultivation was first introduced to Sri Lanka in 1968, but only began to gain traction in the early 2000s when Regional Plantation Companies (RPCs) sought alternatives to lossmaking rubber. Recognising the crop’s immense potential, the Government at the time promised to extend tax concessions for new oil palm cultivations in 2009, and even formally endorsed the expansion of plantations up to 20,000 hectares by 2016.

Encouraged by these strong positive signals from the Government at the time, plantation companies such as Watawala, Namunukula, Elpitiya, Agalawatte, Horana, Kegalle, Malwatte Valley, and Kotagala invested billions in nurseries, milling facilities, and research.

The Association noted that despite these expansions being strictly restricted to marginal and degraded rubber lands, and nearly six prior decades of oil palm cultivation in Sri Lanka without any notable documented instances of negative environmental impacts, the expansion of oil palm cultivation faced persistent opposition from a variety of vested interests.