In a significant move to boost domestic oil palm production, the Telangana government has cracked down on underperforming companies by reallocating their designated zones to the state-run Telangana Oil Fed. This decisive action comes after repeated failures by several firms to meet their cultivation and infrastructure commitments.
Government Intervention After Repeated Failures
The state administration, led by Agriculture Minister Tummala Nageswara Rao, conducted multiple reviews before taking the step. The action is rooted in the Telangana Oil Palm (Production, Processing, and Control) Act, 1993, and its 2008 regulations. These rules mandate that companies must establish processing units within 36 months of planting and provide adequate support to farmers in their assigned factory zones.
However, several companies lagged severely. They showed little progress in setting up crucial processing facilities, expanding plantations, and developing nurseries. This lack of action forced the government's hand to protect farmers' interests and the state's agricultural goals.
Specific Cases of Non-Performance
The scale of underperformance is stark. One company, allocated a massive 44,527 acres in Karimnagar district, managed to cultivate oil palm on only 6,721 acres. Consequently, its entire factory zone was cancelled and handed over to Telangana Oil Fed.
Similarly, Matrix Palm Oil Industries and KN Biosciences (India) also failed to meet their cultivation targets in their respective districts. Following the government's review, their factory zones were also reassigned to the state cooperative.
Focus on Farmer Support and National Mission
Minister Tummala Nageswara Rao emphasised the core requirements for success: timely procurement, stable pricing, and easily accessible processing mills for farmers. The government's broader objective is strategic promotion of oil palm to reduce India's heavy dependence on imported edible oils.
Telangana is actively implementing the National Mission on Edible Oils — Oil Palm (NMEO-OP) scheme. The efforts are showing results: oil palm cultivation now covers approximately 2.82 lakh acres in the state. Notably, 98,976 acres have been added since the current administration took office.
Direct financial support has been a key pillar. The government has deposited a total of Rs 297.88 crore directly into the bank accounts of 53,709 farmers. Thanks to these concerted initiatives, Telangana has achieved the highest oil extraction rate in the country at 20.01%. The current market price for raw palm oil is noted at Rs 19,694 per metric tonne.
The minister concluded with a firm message to companies, urging them to adhere strictly to approved plans and build lasting trust with the farming community. The reassignment of zones marks a clear shift in strategy, prioritizing reliable implementation and farmer welfare over unmet corporate promises.
