The National Mission on Edible Oils – Oil Palm (NMEO-OP) represents one of India’s most ambitious long-term agricultural reforms, aimed at reducing import dependence, improving farmers’ incomes and strengthening domestic edible oil security. Among Indian states, Telangana has emerged as a leader in implementing this approach, laying a strong foundation for oil palm development within a relatively short period.
Since inception, more than one lakh hectares of land in Telangana has been brought under oil palm cultivation. Even before the formal launch of NMEO-OP in FY 2021-22, the State had demonstrated early intent through the efforts of TG Oil Fed, Godrej Agrovet Ltd and Patanjali Foods Ltd, who together developed about 18,747 hectares of land. At present, oil palm operations are spread across 31 districts, with 14 implementing agencies actively engaged. Two oil palm processing mills with a combined crushing capacity of 120 tonnes per hour Fresh Fruit Bunches (FFB) have been set up by TG Oil Fed. Telangana has also recorded the highest oil extraction ratio (OER) of over 20 per cent in the country during the last oil year.
With more than 56 per cent of the total plantation area under TG Oil Fed, Telangana clearly stands out as one of the most advanced oil palm states of India. These achievements reflect strong administrative intent, active engagement with stakeholders and willingness to take early risks on long-term harvest – an effort that deserves recognition at the national level.
Initial momentum and emerging reality
Telangana was one of the earliest states to operationalize NMEO-OP, with multiple agreements signed during 2021-22. In the first full year of large-scale planting (2022-23), the state achieved about two-thirds of its ambitious area expansion target, a remarkable achievement considering the newness of the crop in many districts.
However, the pace of expansion slowed in subsequent years. This occurred despite improvements in FFB prices and continued administrative focus, indicating that oil palm adoption is influenced by factors beyond market prices alone. As a perennial crop with a long economic life, oil palm requires continued trust – among farmers, implementing agencies and financial institutions – that policies, institutional arrangements and procurement systems will remain stable over decades.
Farmer Economics – Risk, Return and Confidence
Farmers in Telangana operate within a rational economic framework. Seasonal crops like paddy continue to offer assured procurement, minimum support prices, short crop cycles and immediate liquidity, making them appear less risky in the short term.
Oil palm, in contrast, demands patience. The initial investment is higher, the investment period is longer and returns are earned over a longer period. Adoption therefore depends not only on projected profitability but also on confidence in uninterrupted procurement, processing capacity and policy continuity.
Encouragingly, while this confidence continues, palm oil is already showing strong economic results.
Success Stories from the Field
The experiences of two farmers from Telangana show the true income potential of oil palm when agronomy, irrigation and institutional support come together.
Shri A. of Nalgonda district. Ramachandra Reddy and Shri P. Ananth Rao of Jangaon district started taking commercial produce after the plantation completed three years of age. Both farmers are currently recording FFB yields of 8 tonnes per hectare or more, which is higher than the average yields reported in established oil palm fields of Malaysia and Indonesia at comparable stages.
More importantly, their average net income is around ₹1.0 lakh per hectare per year, even at this early stage of impact. As the plantation progresses, yields and profitability are expected to increase significantly. These results reinforce an important message: oil palm is not a speculative promise – it is already delivering measurable results for farmers in Telangana.
Such success stories, when communicated consistently, have the potential to strengthen farmer confidence and accelerate adoption in similar agro-climatic zones.
Implementing Agency: Investing with Learning Curves
Both public and private implementing agencies have made substantial long-term investments in Telangana’s oil palm ecosystem – setting up nurseries, deploying trained manpower, building extension systems, involving farmers and planning or commissioning processing facilities.
However, the performance of all agencies has not been uniform. Some faced challenges in meeting aggressive expansion targets, aligning nursery production with actual farmer consumption, or getting mills operational within the initially projected timelines. These variations are not unusual in large-scale agricultural change, especially for a crop that requires the synchronous development of plantations and processing infrastructure.
Importantly, annual target revisions, changing preferences of farmers, availability of irrigation and changing ground realities have all influenced the results. These factors highlight the importance of realistic, location-specific benchmarks rather than uniform expectations across districts and agencies.
Government intervention: corrective intent and regional sensitivity
Recent actions of the Telangana Government to review performance and restructure some operational arrangements reflect its intention to strengthen implementation and protect farmer interests. Judicial directives have also influenced specific decisions in inheritance matters.
However, from a regional perspective, the long-term nature of oil palm requires calibrated intervention, particularly once plantations are established and first harvests are underway. Predictability and consistency are fundamental to maintaining farmer and investor confidence.
A consultative approach – based on data, regional realities and phased performance evaluation – can help ensure that corrective measures reinforce rather than disrupt the momentum already built.
Systemic challenges requiring coordination
Some operational constraints have also contributed to the slow expansion. Delays in payments to micro-irrigation providers have affected surveys and new planting, while challenges in liquidating nursery stock have increased financial pressure on operators.
These issues point to coordination gaps across institutions rather than failures of individual stakeholders. Oil palm development requires close coordination between horticulture departments, irrigation agencies, financial institutions and implementing companies – especially during the expansion phases.
Implications for NMEO-OP
Telangana’s experience holds national importance. As one of the major oil palm states, its progress – or recession – directly impacts the overall momentum of the NMEO-OP. Initial plantations in the state are now entering the yield stage, providing an important opportunity to demonstrate income sustainability and long-term viability to farmers across India.
Any prolonged uncertainty at this stage could slow expansion, when positive field-level evidence is emerging.
The way forward: consolidation rather than reform
The current situation calls not for confrontation, but integration through informed course correction. Comprehensive assessment of crop economics, irrigation preparedness, farmer response, and regional variability can support more nuanced policy decisions.
Strengthening the partnership-based framework through transparent benchmarks, differentiated timelines and structured dialogue will help restore confidence between farmers and implementing agencies.
Above all, sustainability remains the most powerful incentive for a perennial crop like oil palm.
conclusion
Telangana’s palm oil program is not facing failure; It is entering a phase that requires improvement. The state has already built a strong foundation – demonstrated by rapid early expansion, creation of strong infrastructure and success stories of farmers.
With timely, consultative adjustments and continued policy consistency, Telangana can not only strengthen its leadership but also serve as a national model for long-term agricultural reforms under NMEO-OP. The choices made now will shape both the future of palm oil in the state and India’s broader journey towards edible oil self-sufficiency.
(The author is former CEO-Oil Palm Plantations, Godrej Agrovet Ltd. and Consultant – Oil Palm Production and Plantation Development, Calcutta, West Bengal. Views are personal.)
Published on January 24, 2026
