PA Urges Government to Restart Oil Palm Cultivation to Help National Economic Recovery

The Planters’ Association of Ceylon (PA) once again reiterated its call for an urgent reversal of the ban on oil palm cultivation as a means of unlock transformative growth for the plantation industry, and significantly boost worker incomes, a news release from the PA said last week.

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

Palm oil 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 loss-making rubber. Recognizing the crop’s immense potential, the Government at the time promised to extend tax concessions for establishment of new oil palm cultivation in 2009 and even formally endorsed expansion 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.

The 2021 ban has already led to the destruction of over LKR 550 million worth of seedlings, with nurseries fully written off. Additionally, the policy reversal has placed approximately LKR 23 billion in sectoral investments—including plantations, mills, and future revenue—at serious risk, all without any form of compensation, the PA said.