Rubber, coconut or oil palm?


By Dr. U. P. de S. Waidyanatha

Concern has been expressed by some in regard to a recent government decision to diversify some of the rubber lands in Ratnapura, Kegalle and Kalutara and some other Wet Zone Districts to oil palm cultivation despite the current very attractive rubber prices. A CEO of a plantation company recently told me that at present the returns from the two crops were comparable, but a simple calculation based on the current national productivities of the two crops, costs of production and prevailing prices indicated that rubber was probably more profitable. However, some oil palm planting enterprises claim that, with their new plantings, nearly double the present average yields is expected from about the tenth year after planting, in which case the scenario would be very different. The prices and profits of course fluctuate based on supply and demand, but with growing affluence in many countries the demand of both commodities will continue to rise. Therefore, on economic considerations both crops have strong claims. Oil palm requires comparatively less labour but much more fertilizer than rubber. On the other hand, shortage of skilled tappers is an overriding disincentive for rubber cultivation.

The national vegetable oil requirement is over 150,000 t/yr, the bulk of which is imported, as the local coconut oil production at best can meet only about a third of it. Coconut is no longer competitive as an oil crop with a global and even local average production of less than 1 t /ha as against oil palm which is three to four times more. Even with the expansion of coconut cultivation in the North and East, due to decades of low rates of replanting of the existing coconut, and other deterrents such as the Weligama Coconut Leaf Wilt Disease (WCLWD), which is devastating large tracts of coconut in the south, with yet no prospect of its control, the national coconut oil production will hardly increase, and coconut will continue to be predominantly a culinary crop.

Is oil palm a ‘moisture-puffing giant’?

The strongest argument against oil palm is that it transpires far more than rubber, drying up the soil and hence cultivation of oil palm in the wet zone would be an environmental hazard. A debate on oil palm versus rubber erupted in 2003 essentially in regard to the supposed adverse impact of the former on soil water, on the basis of which the Rubber Research Institute vehemently objected to cultivation of oil palm in the wet zone and replacing any rubber with it. Unfortunately the objection was not based on sound scientific evidence. Such evidence could have been obtained through a comparative water balance study of the two crops. Had it been done then this issue would have been resolved by now. Though belated, it is important that such a study is done at least now. However, below are some data from such a study reported in 1998 from the Ivory Coast.

See Table 1:

The data in Table 1 indicates that in the two drier (no rain) months, despite the soil moisture levels being not much lower than in the two wetter months, the evapo-transpiration (ET rates) had more than halved possibly because of long hours of stomata closure due to lower humidity. Thus oil palm like most other crops cuts down on water losses during dry weather through stomatal regulation. Various other publications indicate very similar ET rates (150 mm per month) for ‘wet months’ for oil palm and coconut as against slightly lower rates (120 mm per month) for rubber . Rubber is reported to have transpired 40 to 60 mm per month during ‘dry months’ according to some information in which case it is comparable with the ET rates for oil palm reported in the table above. Some ET rates reported for rice, on the other hand, are 171 mm and 101 mm respectively for Yala and Maha seasons, from a study done at Maha Illuppalama. These data, of course, do not mean much unless examined in conjunction with rainfall, atmospheric conditions and soil water status. However, the data on the whole dispels the myth that oil palm is a ‘moisture puffing giant’! Oil palm, on average, produces four to five times more biomass per unit area than rubber, if not more. Thus it may well transpire more than rubber. A scientific comparison should be on the basis of water loss per unit of dry matter production, or in economic terms, return per unit of water consumption. In any case, the consideration is for cultivation of these two crops in the wet zone where soil moisture would be limiting usually only for a few months of the year. (The wet zone of Sri Lanka receives an average rainfall of over 3500 per annum as against only about 2000 mm in the oil palm cultivated areas of Malaysia except that in the latter it is better distributed across the year). So even if oil palm transpires more it may not be an overriding consideration for cultivation in the wet zone.

Ten times more fertilizer

On the other hand, oil palm removes about ten times more nitrogen, potassium and magnesium than rubber (Table 2) and this should be the matter for concern rather than water, given the ever escalating fertilizer costs. However, according to data obtained from one of the oil palm companies, the field level cost of production is only about Rs 4/kg of fresh fruit bunches (FFB) as against a selling price of Rs. 11 to 12. In other words, the massive productivity and price of goods can easily absorb the high fertilizer costs.

See Table 2

It is unfortunate that successive ministers in charge of the subject of plantation industries failed to take a firm decision on expansion of the oil palm cultivation in Sri Lanka. This decision should have in fact been made 50 years ago, or at least in early 1990s when rubber prices declined drastically to the point many growers and plantation companies even stopped tapping. However, though belated, now that there appears to be a minister with a mission and resolve, and a decision has been taken, the future only will tell whether it is right or wrong; but decisions need to be made on available evidence and calculated risks. It should be interesting for the readers to know how a bold decision was made by the then visionary premier of Malaysia, Tunku Abdul Rehman in the 1960s under its crop diversification programme. With petroleum prices low then and synthetic rubber competing with natural rubber and the global vegetable oil demand increasing, Malaysia decided to replace part of its rubber with oil palm, and went into a policy called the ’60 – 40 policy’ meaning that 40% of the rubber to be replaced with oil palm. Seeing the demand trends of the two crops, in fact within a matter of several years, the policy was changed to 40 – 60; the ratio rubber to oil palm was reversed! Of course the policy more than paid, and Malaysia became the leading producer of oil palm in the world. Many other countries followed suit, and in the decade 1990, the extent of oil palm cultivated per year was about a million acres, that is about the total coconut cover of Sri Lanka. Indonesia despite ample availability of land suitable for oil palm was slow to expand, but has now beaten Malaysia both in extent and production. Other countries like Thailand and the Philippines are expanding oil palm cultivations replacing coconut in some areas. The wonder oil crop of the humid tropics is oil palm for which the temperate oil crop lobbies are envious. In fact its average yield (4 to 5 t /ha) is two to three times that of most temperate oils such as soya, sunflower and canola. The potential yields are even higher. In fact in the 1980s the temperate oil lobby with the American Heart Association had a disinformation campaign against coconut and palm oils calling them ‘artery clogging tropical oils’It is however now known that palm oil (the mesocarp oil, not the kernel oil) has a balanced composition of polyunsaturated, monounsaturated and saturated fats and can be called ‘heart-friendly’.

Where is the land?

The issue is, however, finding land suitable for oil palm which is essentially a crop of the humid tropics, thriving under conditions of well distributed rain, although African countries like Ghana and Nigeria with long dry spells as in our Dry Zone cultivate oil palm, but the yields are low. However, it is worth investigating whether drought tolerant varieties/germplasm are obtainable from the African continent. Some have suggested cultivating it in the eastern dry zone, but there is evidence as also indicative in Table 1 that oil palm stomata close in dry air, even when soil moisture is not limiting, explaining, for example, why expected yields have not been achieved in some soil irrigation experiments in a dry area. So, ideally, oil palm should be grown in the wet zone, and the concern is whether a part of the now highly profitable rubber should make way for it. On the other hand, there is greater rationale for replacing part of the coconut in the wet zone on simple economic considerations; it being the least profitable of the three crops. There are over 100, 000 ha of coconut in the wet zone of which about 10% are in estates and over 40% are in organized smallholdings, the balance being homegardens. Absentee landlordism, shortage of pickers/labour, thieving and low productivity are the banes of the industry. Thieving is not a problem yet with oil palm, picking hardly needs skill, and profits are good. So this should now be the crop for the larger coconut landowners, particularly those with senile plantations, and over the next several years incentives should be provided for replacing such coconut with oil palm targeting at least 50, 000 ha. The oil palm planting enterprises should act as nucleus farms, procuring the produce and providing technology and planting material. Malaysia expanded much of its oil palm cultivation under its smallholder settlement schemes (FELDA, FELCRA and RISHDA). It is unfortunate that CRI has yet failed to ascertain whether oil palm is also susceptible to the Weligama Wilt Disease, which may well be the case. If not, oil palm should be a good option for those tracts of coconut devastated by the disease. Coconut could, anyway, be expanded to the deep soils of the North and East, in which it will thrive, as in the North West. A CRI plot of coconut at Nilaweli which remained unfertilized and unattended for over 25 years during the civil war was observed to be laden with nuts during a visit in 2002 following the ‘Peace Accord’. RRI is testing rubber cultivation in the North and East. Tree growth is said to be good, but the concern should be both soil moisture and atmospheric humidity which overridingly determine latex flow and yield. It is reported that the Vietcong people tapped their rubber at 2 am to capitalize on the high humidity for higher yields, and later went to fight the French during their war with them! Rubber, on the other hand, could replace part of the coconut from the wet intermediate zone. with coconut expanding in the North and East So a ‘game of draughts’ should be played with the three tree crops rationally and not emotionally taking into consideration agronomic feasibility, economic viability, sustainability and environmental concerns.

Institutional support

Expansion of oil palm also requires research support which apparently is being provided by the CRI. It is time that the mandate of the CRI is expanded perhaps re-naming it the ‘Palm Research Institute’ and taking on not only oil palm but also other palms such as the palmirah and the kithul; the latter might prove to be even more profitable than oil palm! Institutions should change with times, and many of them seem to have outlived their viability in their present forms!

The writer is former Chairman, Coconut Research Board and former Chairman/Managing Director, Kurunegala Plantions Limited

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