47% of the targeted area covered under India’s oil palm expansion this fiscal

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Bihar joining the Oil Palm mission will help achieve the fiscal year’s target of 1.19 lakh hectares

By Prabhudatta Mishra

Updated - October 29, 2026 at 09:17 AM. | New Delhi

Close up of fresh oil palm fruits with cooking oil, selective focus. | Photo Credit: slpu9945

Forty-seven per cent of the area targeted for oil palm coverage has been achieved, while the Indian government is hopeful of meeting the target of 1.19 lakh hectares (lh) fixed for 2026-27 with Bihar joining the Oil Palm Mission.

Out of 55,614 hectares covered under oil palm in the current fiscal year, six states in the north-east region – Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland and Tripura- make up 23,347 hectares. Nine other states make up 32,267 hectares. This includes Telangana (14,919 hectares), Andhra Pradesh (12,652 hectares), Odisha (2,119 hectares) and Chhattisgarh (1,465 hectares), official data show.

Oil palm area expansion is considered a major milestone in the national mission on oilseed programme as the impact of weather is comparatively less on this plantation crop against field crops like soyabean, groundnut and mustard.

New areas emerging

Sunil Kataria, MD & CEO, Godrej Agrovet, said; “While Andhra Pradesh and Telangana continue to lead, newer geographies are now emerging as important growth centres. Equally encouraging is the focus on scientific expansion, ensuring that plantations are established in suitable agro-climatic zones and supported by reliable irrigation infrastructure.”

Highlighting that Fresh Fruit Bunch (FFB) prices have increased from around ₹12,500 per tonne in 2023 to nearly ₹20,000 per tonne today, he said it has significantly improved farm-level returns.

The centrally-sponsored scheme National Mission on Edible Oil - Oil Palm (NMEO-OP) was launched in August 2021 was aimed at raising crude palm oil production to 11.20 lakh tonnes (lt) by 2025-26 through bringing additional area of 1.79 lh in north eastern states and 4.85 lh in nine other states by end of FY26. The scheme is implemented between central and state government in the ratio of 60:40 for general states and 90:10 for NE states.

States use less than 40% of allocation

Latest data show that against Rs 757.62 crore allocated for this year under the scheme, the Centre has released Rs 583.23 crore to states whereas the utilisation was less than 40 per cent of the release, so far. But there are states like Andhra Pradesh, Kerala, Nagaland and Mizoram which have spent over 50 per cent of their respective release, sources said.

On the other hand, Gujarat has utilised only 6 pert cent, Odisha 15 per cent, Chhattisgarh 22 per cent, Assam and Manipur 24 per cent each.

Sources said that out of 36,319 hectares targetted this fiscal in north-eastern states, already 23,347 hectares have been covered under oil palm, which is 64 per cent of target. But other states have only covered 32,267 hectares or 39 per cent of the targetted 82,959 hectares.

As Bihar has agreed to cover 200 hectare after deciding to implement the NMEO-OP from this fiscal, the government is hopeful of expansion of area in the coming years, the sources said adding a lot will depend on how farmers respond.

Total area covered

Between 2021-22 and 2025-26, out of Rs 1,447 crore released by the Centre, states utilised nearly 80 per cent of it in area coverage under oil palm.

Before the NMEO-OP was launched, India had 3.67 lh area under oil palm. But, in the last five years, out of 6.5 lh target only 2.73 lh could be added. With the area added in the current fiscal, total area under oil palm has now reached 6.96 lh including 3.28 lh under NMEO-OP.

Under NMEO-OP’s Viability Gap Payment (VGP) provision, the differential amount paid by the government directly through Direct Benefit Transfer (DBT) to the farmers, when the industry’s payable price (based on average market rate for a particular period) falls below the government-set rate, which is declared for every Oil Palm Year (November-October) to ensure that farmers get a minimum assured price, irrespective of fluctuations in market rates.

Sops for farmers

The Mission’s viability pricing mechanism, policy support and emphasis on processing infrastructure have given the industry the confidence to make long-term investments, which is critical for oil palm which has a life cycle spanning over two decades, Kataria said. Timely disbursement of viability gap support, periodic review of incentives for planting material and irrigation, and sustained investment in high-yielding varieties, mechanisation and collaborative research with institutions such as ICAR-IIOPR will be equally important, he said.

The NMEO-OP also offers special assistance of Rs 1,00,000 per hectare to farmers for planting material, management, and to address the topographical challenges (land clearance, half-moon terrace construction, bio-fencing) faced by them in the north east region. It also provides ₹2,90,000 for the purchase of harvesting tools to farmers.

Kataria said that the key challenge remains the three-to-four-year gestation period before commercial yields begin. This is where intercropping can play a transformative role. Cultivating short-duration crops such as vegetables, pulses and turmeric alongside young palms helps farmers generate interim income while the plantation matures. Greater adoption of intercropping, combined with continued support for drip irrigation, quality planting material and accessible credit, will be critical to accelerating farmer participation, he said.

He also mentioned how Godrej’s each ‘Samadhan’ Centre is serving nearly 2,000 hectares through integrated advisory services, input support, technical guidance and collateral-free credit.

“Achieving the Mission’s targets will depend on synchronised growth across the value chain. Processing mills and collection centres must expand in tandem with plantation development, given that FFBs need to be processed within 24 hours of harvest,” Kataria said adding investments in rural connectivity, roads, aggregation networks and logistics infrastructure are also critical.

Published on October 29, 2026

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