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OIL PALM PRODUCTION IN MIZORAM: A CASE STUDY OF KOLASIB AND

MAMIT DISTRICTS

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ISSN : 0378 – 4568 UGC Care Group 1 Journal

OIL PALM PRODUCTION IN MIZORAM: A CASE STUDY OF KOLASIB AND MAMIT

DISTRICTS

Khawlsiamthanga Khawlhring1, 1 Research Scholar, Department of Management, Mizoram

University, Aizawl, Mizoram
2 2
Dr. L.S. Sharma , Professor, Department of Management, Mizoram University, Aizawl,
Mizoram. e-mail: 1kholaetc@gmail.com, 2lsksharma@yahoo.co.in

ABSTRACT
Mizoram has been involved in the cultivation of oil palm since 2005-06 under the Integrated
Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM) and currently under a revised National
Food Security Mission - Oil Palm from 2018-19 onwards. According to the Mizoram Oil Palm Act
of 2004, companies must set up their own nurseries in their respective zones to supply the oil palm
seedlings to the growers and have approached the growers with a buy-back policy of the produce of
the growers from their respective zones. During 2017-18, a total quantity of 5237.54 metric tonnes
of fresh fruit bunches have been sold to the companies. Crude palm oil production during 2018-19
was 625 metric tonnes, which was transported to a third party in Kolkata. The present study deals
with the oil palm production in Kolasib and Mamit districts of Mizoram which is under Godrej
Agrovet Ltd. who have established the Palm Oil Mill at Bukvannei Village. It is found that half of
the respondents used oil palm cultivation as their main source of livelihoods. Average area of oil
palm cultivation was 2.61 hectares only. There were 28 (14.43 per cent) growers who did not
harvest their fresh fruit bunches (FFBs) due to transportation problems escalated by low price of
FFBs. Almost half of the plantations (47.9 per cent) were not accessible by road which affects
production of FFBs. The study also finds that transportation problem and low price of FFB were
the main difficulties faced by the growers. It is also suggested to implement certification system to
ensure sustainable palm oil production in the state with proper training given to the growers.
Key words: Oil palm production, National Food Security Mission, Fresh Fruit Bunch (FFB), Crude
Palm Oil, Average yield.

INTRODUCTION
Oil palm (Elaeis guineensis jacq.) is the most productive oil crop (Anyane, 1961, Agri Farming,
n.d). The Ministry of Agriculture, Government of India (2011, March) in its “Guidelines for
Special Programme on Oil Palm area Expansion (OPAE)” claims that a hectare of oil palm
plantation can give up to 6 tonnes of palm oil and up to 0.6 tonnes of palm kernel oil while the
economic life of oil palm is around 25 years. At present, the commercial variety of oil palm tenera
is cultivated widely.
According to UNEP (2014), “palm oil is the top-selling vegetable oil in the world and is found in
50 per cent of all consumer goods”. There was a decline in production during 2015-16 caused by a
strong El Niño weather pattern which suppressed rainfall over a wide area of south eastern Asia
during 2015 and early 2016 (USDA, 2016). As per WWF-UK (2020, January 17), one tenth of the
edible oil crop cultivation occupied by oil palm gives 35 per cent of the global vegetable oil
demand. World’s palm oil production is continuously increasing as shown in table 1. Indonesia
with an estimated production of 44.50 million metric tonnes of palm oil is the top producer in the

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world followed by Malaysia with an estimated production of 19.70 million metric tonnes in the
year 2021 (www.indexmundi.com, 2021, August).
Table 1: Global Oil Palm Production from 2012-13 to 2020-21 (metric tonnes)
2012/ 2013/ 2014/ 2015/ 2016/ 2017/ 2018/ 2019/ 2020/
Year
13 14 15 16 17 18 19 20 21
Metric
56.38 59.3 61.75 58.92 65.17 70.42 74.05 75.23 75.45
tons
Source: Statista 2021a
Palm oil is the major vegetable oil consumed in India. In addition to human consumption,
it is used in various industries including refining, vanaspati and other sectors (WWF-India 2013).
The palm oil import rises from 3038 thousand metric tonnes in 2000 and further increased to 8400
thousand metric tonne in 2020 as per the estimate of the USDA. India imports around 15 million
tonnes of edible oils annually out of which palm oil accounts for more than 9 million tonnes
(Economic Times, 2020). Statista (2021b) shows that the annual consumption of palm oil in India
was steadily increasing from 8.25 million metric tonne in 2012 to 9.49 million metric tonnes in
2019 and the slump in consumption to 8.08 million metric tonnes during 2000 was caused by
imposition of nation-wide lockdown due to Covid-19 pandemic.
Palm oil made up more than 60 per cent of India’s total vegetable oil imports (“India's June
palm oil imports down”, 2021). According to Jadhav (2021), tax cut in crude palm oil import is
likely to boost import of the tropical oil. India is the leading importer of palm oil in the world
followed by Pakistan, Spain, Italy, US, Egypt, Germany, Japan, Turkey and Belgium (Statista
2021c).
In order to reduce the burden of edible oil import, Oil Palm Development Programme was
started by the Government of India under the Technology Mission on Oilseeds (TMO) since 1991-
92. The focus was on area expansion in six states which was subsequently replaced by Integrated
Scheme on Oilseeds, Pulses, Oil Palm & Maize (ISOPOM) in 2004-05 covering 12 states. Later in
2011-12, Oil Palm Area Expansion Programme (OPAE) was introduced which was again replaced
by National Mission on Oilseeds and Oil Palm (NMOOP) in 2014-15 and NMOOP was then
merged with the revamped National Food Security Mission and implemented under a sub-scheme
as National Food Security Mission – Oil Palm since 2018-19.
Out of the total geographical area of Mizoram i.e., 21,08,700 hectare, the total potential
area for oil palm cultivation as recommended by Chadha Committee was 61,000 hectares. Oil
palm cultivation in Mizoram was carried out under the Mizoram Oil Palm Act, 2004 where
contracting firms are to supply seeds and buy back the produces of the growers. Memorandum of
Understanding (MoU) was signed between the State Government and three companies, namely, a)
Godrej Agrovet Ltd. to cover Kolasib and Mamit Districts, b) Ruchi Soya Industries Ltd. to cover
Lunglei and Lawngtlai Districts and c) 3F Oil Palm Agrotech Pvt. Ltd. to cover Aizawl, Serchhip
and Saiha Districts. Nurseries for raising oil palm seedlings were developed by the companies
whereas only Godrej Agrovet Ltd. have established palm oil extraction mill.
The initial cultivation of oil palm in Mizoram covered 110 hectares in 2005-06. Oil palm
cultivation area shows steady and continuous increase to 13056 hectares in 2012-13 and 26531
hectares in 2018-19 (Mizoram Economic Survey, 2014-15 to 2018-19). There were 10,843
growers involved in oil palm cultivation spreading across 197 villages of Mizoram and today
Mizoram is the leading State in oil palm cultivation in the North East. Crude Palm Oil (CPO)
production during 2018-19 was 625 metric tonne (MES 2019-20). According to the Agriculture

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Department, Government of Mizoram, the total Fresh Fruit Bunches (FFB) purchased up to March
2021 by the companies was 34383.763 metric tonnes.
The supply chain of palm oil industry consists of growers, millers, refiners and
oleochemicals. The upstream industry includes the growers and the millers while downstream
industry consists of refiners and oleochemical industries. The versatile nature of the palm oil led to
rapid expansion of its cultivation in the tropical and sub-tropical countries. In spite of its
contributions to the livelihoods of some families as observed by Cramb and Sujang (2013), it is
claimed to be accompanied by social, economic and environmental issues (Cramb & Curry, 2012).
As stated by Carter, et al. (2008), the sustainable supply chain management involving coordination
and integration of the social, environment and economic goals have been crucial for the future
development of palm oil production. Aggarwal and Pandey (2021, June 18) observed that “several
Indian companies or international companies, operating in India, have made promise and
commitments towards a sustainable supply chain of palm oil”.
As quoted by Rathore (2020), Kamal Prakash Seth, Country Head-India, RSPO said that
“India has made commitments under the Nationally Determined Contributions (NDCs) and
Sustainable Development Goals. Meeting those commitments cannot be limited to activities within
the boundary of India, we will have to review our ecological impact on international demand too”.
Launching of Sustainable Palm Oil Coalition for India (India-SPOC) in 2018 by WWF India, the
RSPO, the Centre for Responsible Business (CRB), and the Rainforest Alliance (RA), is an
important step towards sustainable supply chain management in the country. Godrej Agrovet (2018,
April) endeavour to produce 100 per cent sustainable palm oil and incorporate sustainability in their
value chain by 2025. Their commitment to zero deforestation and no cultivation on peat land is a
welcome development.
The present study pertains to the two districts of Mizoram state, where only the upstream
sectors are available. All the crude palm oil (CPO) are sold to Kolkatta through brokers for further
refining and processing.
OBJECTIVES
The present study aims:
1) to examine the socio-economic condition of the oil palm growers
2) to identify the main source of income of the oil palm growers
3) to investigate the problems faced by the oil palm growers
4) to study the status of palm oil supply chain in Mizoram
METHODOLGY
The present study was conducted in Kolasib and Mamit districts of Mizoram. Kolasib
district has 17350 hectares of potential area while Mamit district has 18500 hectares of potential
area for growing palm oil plantation. The total potential area of the two districts comprised of
35.50 per cent of the total potential area of the whole state of Mizoram.
Data were collected using interview schedule from the sampled growers. Multi-stage
sampling technique was used in the study. However, based on the availability of the active growers
in the districts as well as the villages, number of growers selected from each village differed. From
Bilkhawthlir and Thingdawl blocks of Kolasib district, two villages were selected and 20 samples
were selected from each village comprising a total sample of 80 from the district. From West
Phaileng and Zawlnuam blocks of Mamit district, three villages each were covered with a total
respondents of 65 and 49 samples from each blocks respectively. The number of randomly selected

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samples from each village depends on the active growers in each village. A total number of 194 oil
palm growers were selected in the study.
Secondary data were also collected from Directorate of Economics & Statistics, Department
of Agriculture, Godrej Agrovet Pvt. Ltd., and other publications. Statistical measures like mean,
percentage, standard deviation, bivariate correlation and simple linear regression were employed to
analyse the data.
RESULTS AND DISCUSSION
In Mizoram, the full supply chain of palm oil production has not existed as the state is not
having refinery or oleochemical industries. The company buys the products from the growers, then
sells the CPO to a broker in Kolkata. Therefore, the study examines on the supply chain from the
growers perspective till being purchased by the company and the present study focusses on the
performance of the growers at the village level and the services offered by the company or
Government.
Kolasib and Mamit Districts were under the purview of Godrej Agrovet Pvt. Ltd., whereas
the latter have already established Palm Oil Mill at Bukvannei village of Kolasib District and
extraction of Crude Palm Oil had been started since 2014. Godrej Agrovet Pvt. Ltd. is the only
company in the state to have established palm oil mill till today. The total purchase of FFB by the
company till March 2021 was 30519.41 metric tonnes. The company committed to 100 per cent
certified supply chains and full Certified Sustainable Palm Oil (CSPO) for premium product ranges
by 2020. However, certification system of the produce was not yet in place in Mizoram. The
company purchases oil palm fresh fruit bunches (FFB) from the growers and CPO was extracted in
the mill, which was further sold to the broker from other states. At the same time, the company tries
its best to control pollution to the environment and bio-gas production as well as bio-compost and
animal feeds are made from the by-products of the oil palm.
Oil palm expansion programme in the state was taken up by the Agriculture Department of
the State Government. According to the officials of the department, oil palm was cultivated in the
degraded lands which were earlier used for the purpose of shifting cultivation and no primary forest
had been destroyed due to oil palm plantation. In addition, oil palm cultivation in Mizoram was
practiced in scattered places and cluster cultivation was not practiced. The present practice is
claimed to have little ecological impact.
Socio-economic conditions
The socio-economic conditions including age, education, gender, marital status, training
attendance, economic status, housing status and main source of income were studied. The average
age of the oil palm growers was 58.32 years. Those aged less than 39 years comprised only 5.15
per cent implying that youths are not interested in growing oil palm. Only 3.61 per cent of them
were without formal education and a mere 1.03 per cent were having bachelor degree. The highest
concentration was those who had passed VII standard comprising 36.60 per cent.
Among the growers, 89.69 per cent were male and only 10.31 per cent were female.
Married growers consist of 80.41 per cent, where family labour helps in management of
plantations. Majority comprising 88.66 per cent attended trainings on oil palm cultivation and
management. The sampled oil palm growers consisted of 9.79 per cent Antyodaya Anna Yojana
(AAY) families, 32.47 per cent Below Poverty Line (BPL) families and 57.73 per cent Above
Poverty Line (APL) families.
The sampled growers were having various other occupations in addition to oil palm
cultivation. The study finds that 50 per cent of the respondents were using oil palm cultivation as

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their main source of income, 11.86 per cent used wage labour and 8.25 per cent were still practicing
shifting cultivation as their main source of income. However, it may be observed that the practice
of shifting cultivation is very much reduced among the oil palm growers. Government service was
the main source of income for 6.70 per cent while other plantations were the main source of income
for 6.19 per cent. Other sources of income include pensions, petty trade, fish farming, quarrying,
wet rice cultivation, etc. It was observed that 5.15 per cent of the sampled growers were pensioners.
Table 2: Socio-economic conditions of the oil palm growers

Sl. No. Variables Frequency Percent

1 Age (in years)
<39 10 5.15
40-80 180 92.78
>80 4 2.06
Average Age 58.32
2 Education
No formal education 7 3.61
Up to IV Std. 62 31.96
Up to VII Std. 71 36.60
Up to X Std. 41 21.13
Up to XII Std. 11 5.67
Bachelor degree 2 1.03
3 Gender
Male 174 89.69
Female 20 10.31
4 Marital Status
Married 156 80.41
Not Married 11 5.67
Divorcee 9 4.64
Widow/Widower 18 9.28
5 Training attendance
Yes 172 88.66
No 22 11.34
6 Economic Status
AAY 19 9.79
BPL 63 32.47
APL 112 57.73
7 Housing Status
Kutcha 2 1.03
Semi-pucca 159 81.96
Pucca 33 17.01
Source: Field Survey-2019
Growth of Oil Palm Growers in the Districts
Figure 1 shows that oil palm cultivation was started in the year 2005 by 11 of the sampled
growers. Maximum number of new growers was found in 2007 with 83 new growers and declined

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to 41 in 2008. The figure shows that among the sampled growers, no new growers were found in
2015 and 2016. Only one new grower was found in 2013, 2014 and 2017. From the following data,
it appears that oil palm cultivation is not attracting new growers in the districts. The reasons for this
decline may be due to the decline in the attractiveness of the scheme.

100
Figure 1: Number of oil palm growers and year of planting
83
80

60
41
40 27
20 11 13
8 5
3 1 1 1
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2017
Source: Field Survey, 2019

Area of Oil Palm cultivation

A total number of 194 sampled respondents cultivated oil palm in an area of 507.17 hectares
and the average cultivated area per farmer was 2.61 hectares. More than 60 per cent of the growers
were growing oil palm in less than 4 hectares. The top ten largest growers cultivated a total area of
93 hectares with an average area of 9.3 hectares per farmer while the least ten growers cultivated an
area of 9.5 hectares with an average cultivated area of 0.95 hectares per farmer. It is clear that many
of the growers need to enhance the area of cultivation to make it as a good and sustainable source
of income.
Table 2 shows that there is correlation between area of oil palm cultivation and total FFB
harvest at 0.01 significance level. This implies that more cultivation area leads to more production
of FFB.
Table 2: Correlation between area of cultivation and FFB harvest
Total FFB harvest in
Oil Palm Area
quintals
Pearson Correlation 1 0.739**
Total FFB harvest in
Sig. (2-tailed) 0
quintals
N 194 194
Pearson Correlation 0.739** 1
Oil Palm Area Sig. (2-tailed) 0.000
N 194 194
** Correlation is significant at the 0.01 level (2-tailed)
Problems faced by Oil Palm Growers
During the survey, oil palm growers were asked about the problems faced by them andwhich
were analysed using frequency and percentages. Low price of fresh fruit bunch was the main
problem as 90.2 per cent were having problems with it. The next problem was transportation
problem with 61.3 per cent followed by the problem of animal attack being faced by 41.24 per cent.
The young plants are usually attacked by wild boars, porcupines, squirrels, etc. and sometimes
resulted to the destruction of the whole crop. Almost 40 per cent of the growers were facing with
financial problems while 12.9 per cent were facing with technical issues. Other problems consisted

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of long trunk of oil palm tree (4.64 per cent), disease and water shortage (1.03 per cent), non-
availability of fertilisers (0.52 per cent). Meeting the requirement and addressing these problems
will enhance the FFB supply from the existing plantation area.
Factors affecting Fresh Fruit Bunch production
In addition to the problems mentioned, some of the factors which could affect the oil palm
production were analysed using linear regression model. The R2 value is 0.683 implying that 68.3
per cent of the FFB harvest was affected by the factors under analysis. Year of cultivation has a
significant impact on the FFB production at 0.01 level, area of cultivation is significant at 0.05
level, number of mature plants has a significance level of 0.01, training attendance (code 1=
attended, 2=not attended) has positive impact but not significant and economic status of the family
has positive impact but not significant.
Table 3: Factors affecting FFB production
Coefficientsa
Standardize
Unstandardized
d
Model Coefficients T sig.
Coefficients
B Std. Error Beta
23774.
8500.31 2.80 0.01
(Constant) 65
Year of cultivation -11.87 4.24 -0.12 -2.80 0.01
Area of Oil Palm cultivation 14.60 6.57 0.18 2.22 0.03
Mature Plants 0.33 0.04 0.61 7.45 0.00
Training Attendance -22.47 26.22 -0.04 -0.86 0.39
Education 14.33 8.79 0.07 1.63 0.10
Economic Status of the
family 13.23 13.04 0.04 1.01 0.31
a. Dependent Variable: Total_FFB_Harvest_in_Quintals
R2 = .683

CONCLUSIONS
Oil palm development programmes of the Government of India was also implemented in
Mizoram since 2005. Kolasib and Mamit districts were the most potential districts with 35.50 per
cent of the total potential area. The complete supply chain of palm oil production has not occurred
in the state as the downstream industry does not exist in the state. The supply chain is found to be
consisting of growers, the company buying the products from the growers for crude oil extraction
and then further selling to the brokers for further sells it to the mills in other cities of India. The
study finds that the number of families depending on shifting cultivation is slowly decreasing with
their involvement in oil palm cultivation and deforestation process is slowed down due to the oil
palm cultivation.
Though Godrej Agrovet Pvt. Ltd. Company had committed to 100 per cent certified supply
chains and full Certified Sustainable Palm Oil (CSPO) for premium product ranges by 2020
(WWF-India, 2017), there is still no evidence of certification mechanism in place in the state of
Mizoram. However, the date line is shifted to 2025 (Godrej Agrovet, 2018 April). At the same
time, oil palm cultivation in Mizoram was not taken up as a corporate farming and was carried out

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by small growers in scattered places without destroying primary forests. As Corley (2009)
observed, necessary expansion of oil palm cultivation could be done without further environmental
damage with proper management. However, it would be desirable to have sustainability
certification system in the state for future safety of the environment and the Government of India
may take necessary steps to ensure sustainable production of palm oil from various states of the
country.

RECOMMENDATION
1. Age of plantation, area of plantation and number of mature plants were found to have
significant impacts on the amount of FFB harvests. Therefore, it may be encouraged to fully
replace the dead plants and fill the gaps in the plantation area before extending the area of
cultivation.
2. The major problem of low price of FFB had been addressed and the price was hiked to
Rs.10.00 per kilogramme with effect from 1st January, 2021. This is a good move in favour
of the growers.
3. Construction of all-weather roads to the plantations may boost the FFB production and may
result in better production from the same plot of land with much more ease with more
profits so that they will be able to manage daily requirement and prevent them from going
back to the wasteful practice of shifting cultivation.
4. Plant protection equipment from wild animal attack may be provided.
5. Mechanised harvesting tools may be provided.
6. Sustainable cultivation without further deforestation should be ensured by the company and
the government and proper training should be given to the growers.

LIMITATIONS
The study was conducted only in few selected villages of Kolasib and Mamit Districts and that was
also surveyed during a short period of time, i.e., October – December, 2019. Many of the practical
problems of the growers might have been unnoticed and the impact of oil palm cultivation on the
environment might also be overlooked. However, this study is expected to be useful for the
academicians, researchers and policy makers in formulation of oil palm development programmes
in the state.

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