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10 Steps to a Profitable Oil Palm Farming Business

If you are thinking of a business that is less stressful and highly profitable, then oil palm farming is for you. This article will open your eyes to the steps involved in starting a profitable oil palm farming business.

Oil palm is the best oil-containing crop in terms of yield capacity, even though planting oil palms won’t  give immediate returns. The crop’s productivity depends on tree species, soil type, climatic conditions,  oil palm plantation management, and cultivation practices. It’s cultivation has turned into a lucrative  and expanding business.

Yet, like any business, oil palm farming requires patience, reasonable management,  monitoring, and a strong producer’s background. Oil palm plantations embrace subtropical and tropical  latitudes, providing the best climate for the crop to thrive. Growth and production of oil palm are  popular in Nigeria, India, Ecuador, Guatemala, Papua New Guinea, Colombia, Thailand, etc. 

Although, Malaysia has overtaken Nigeria in oil palm farming and are now the leading producers. The country depends  solely on oil palm business and allied industries for their economy. Other countries that follows the lead  are; Indonesia, Columbia and Thailand.

The business of oil palm farming is not a get rich quick kind of  business, it takes about 4 years before you can start making money but it is worth the wait. It’s Cost  inputs during the first thirty months (prior to the first harvesting) are rewarded with up to 25 tonnes of  fresh fruit bunches per ha in mature trees. Plantations give about four tonnes of crude palm oil per ha,  which is eight times more productive than sunflower oil yield. 

The commodity is extracted from the plant’s pulp and kernel, yet not each tree is equally valuable for  growing. The oil palm tree (ELAEIS GUINEENSIS) represents the ELAEIS GENUS belonging to the  ARECACEAE family and originating from West Africa.  

Oil palm farming business attracts growers not solely because it yields well but because it sells well, too. The  cultivation of the oil palm is spurred by the high demand for its product – palm oil, an ingredient of  many daily-use items for multiple purposes. It’s global production in plantations accounted only for 2  million metric tons in 1970.

But, In the marketing year of 2020/2021, the figure jumped up to 72 million  metric tons, which constituted 31,4% of the world’s oil and fat production. The rise is explained with the  expansion of its traditional applications in pharmaceutical companies, beauty, personal, and home care  to newly discovered possibilities from human nutrition to bioenergy technical use. Besides, kernel cake  is suitable for cattle feeding, with high protein content and oil residues. 

The plant is tropical, so it grows best in stable-warm areas with sufficient soil moisture all year round.  The economic lifespan of the tree in plantations is rather long and makes 25-30 years. In wild nature, oil  palms can grow up to 200 years, but they get too tall and reduce yields, which complicates harvesting  and, then, their commercial use. Even though planting the crop is highly efficient, oil palm farming does require certain knowledge and efforts before its producers can benefit from plantation yields. 

4 BENEFITS OF OIL PALM FARMING BUSINESS. 

Apart from the production of red palm oil which is the major one, other things which can be benefited from oil palm are; 

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1 – The residue of the processed palm fruit is used for fuel and can also serve as fertilizer to crops. 

2 – Palm kernel oil is extracted from the nuts and can be used in making soap and vegetable oil used for  preparing food. The cake from palm kernel oil residue is used in feeding livestock 

3 – The back of the palm fond can be used in weaving baskets, hat etc. Palm fond leaves are used for  brooms, roofing and mat making. Oil palm tree trunk can be splitter for firewood or into timber for building purposes. It can also be used to grow mushroom, serves as house to some milky coloured  insects that are edible. 

4 – Red palm oil is used for cooking, margarine, candle and soap making etc. 

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Picture Credit:  Attila Janosi 

10 Basic steps involved in Oil Palm farming business. 

  1. Prepare your land for oil palm farming
  2. Select the best varieties of oil palm for oil palm farming
  3. Plant your oil palm
  4. Have a good irrigation system
  5. Control Pests and Diseases
  6. Apply necessary fertilizer
  7. Do adequate weeding of your oil palm farming business
  8. Harvest your oil palm
  9. Have a good storing strategy for your oil palm farming business
  10. Market your oil palm farming business

Preparation of land for Oil Palm Farming

The best soil types for the crop’s cultivation are loamy or alluvial well-drained soil.  It must be at least one meter deep for root development and rich in organic matter with pH 4.0 to 6-8.0 that is having sufficient soil moisture. You can carry out a soil test to determine the level of its nutrients  content. If the place is a virgin land you have to create pathways for vehicle movement.

Cut down  shrubs and trees, clear grasses, plough the ground and survey the land. But for non virgin land with less  trees clear the land, make use of harrow and plough to level it, and do perimeter survey. Peg the land in  readiness for planting. The standard spacing recommended by NIFOR is 9m by 9m whether triangular or  straight method layout. 

5 Varieties of Oil Palm for Oil Palm Farming

Oil palms for plantations are typically propagated with seeds taken  from fruits. Seed treatment is a responsible stage in oil palm cultivation and management because  improperly prepared seeds will germinate after a couple of years due to long dormancy time.

Dried for  about 2.5 months in stable hot rooms (40°C) and soaked for 4-5 days in daily changed water, seeds are  supposed to germinate in about 12 days (3-3.5 months after extraction). There are three main crop  types for cultivation in plantations, They are: 

-DURA : This type comes with a thick shell (2-8 mm) 

-PISIFERA : This type comes with no shell. 

-TENERA: This type is a hybrid of the above two. Tenera is the most commercially valuable type, having  a thinner shell and a bigger kernel, which is the most precious growing quality for plantations. Tenera palm tree with good management and adequate amount of water will start yielding fruits after 3 years  of planting in the main field.

But the first-seven years the bunches will be small from the 8th or 9th year  the bunches will increase in size. A bunch of palm fruit weighs between 25kg-44kg and produces about  40 liters of red palm oil yearly. 

-SUPER-GENE: This type shoots about 15 bunches at a time. It can produce 25 bunches per palm tree in  a year. It’s Harvest is early (22-24 months) when compared to others. It’s first harvest is between 7-8  tonnes a hectare. Super-gene has high yield which is two times higher than others. 

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-SIRIM: It’s harvest is between 36-48 months. It is a dwarf tree so harvesting is less stressful and cost less. The seeds and bunches are also very big with higher oil. 

Planting the oil palm

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Picture Credit: Unsplash.com

The optimal timing for planting is the rainy season from June to September. This way, plants  can establish their root systems before the period of droughts. To get a good yield from cultivation, oil  palm trees must be planted at the right density. The plant sprouts are spaced in a triangular pattern with  enough spacing for growing (9x9x9 m) in pits about 60 cm3. This planting method allows placing around  145 plants per hectare.

Immediately after germination, sprouts are planted into plastic (polyethylene)  bags or containers with equal ratios of topsoil, sand, and properly decomposed cattle manure. Sprouts  for cultivation remain in the bags for about 4-5 months (until they develop a bifid leaf). Then, bifid leaved sprouts continue in a plantation nursery, where they grow further for about a year.

Finally, seedlings with about twelve-fifteen leaves and at least one meter high are mature enough and ready for  growing in palm oil plantations. The oil palm tree has a stem and leaves with no branching. It grows  from the sole bud on the stem. If the bud is damaged, the plant is lost.

During the first three years after  planting, the land use can be intensified with intercropping or cover cropping. Thus, plantation owners  can get additional yields and cattle forage prior to the cash crop will fruit. However, operations and  movement of oil palm plantation machinery for intercropping must not disturb the cash crop’s roots. Another point to consider in cultivation is that not all plants are suitable to neighbor with palms. 

Plantation intercrop plants must tolerate shade and not compete for nutrients, sunlight, and moisture  with the cash crop. Besides, damaging plant fronds or pruning in oil palm plantations should be avoided  because the more leaves a tree has, the more yields it can give.

Suitable intercrops for plantation  cultivation are pineapple, ginger, turmeric, flowers, vegetables, banana, or tobacco. Leguminous plants  are an additional source of nitrogen fixation for cash crop growth. Typical cover crop plants for oil palm  plantations are Mucana, Centrosema prutascens, Pueraria phaeseoloides, Mimosa invisa, Calopogonium  mueconoides, etc. 

Irrigation of the oil palm farming business

The plant can resist several-month droughts, yet the yields will significantly drop. For this  reason, oil palms grow under natural rainfalls, with compensating irrigation when rain-fed soil moisture  in plantations is not enough. Each tree requires about 150-200 mm daily, and mature plants take even  more. Several common irrigation methods satisfy the crop’s water needs: micro-sprinklers, basin, and  drip irrigation. The last one is the most economical and thus beneficial for plant cultivation. 

Control of pests and diseases

Rhinoceros beetle, Mealybug, Aphids, Caterpillar, Termites, Nematodes  are some of the pest. Some of the diseases are; Freckle, seedling blight, vascular wilt, fruit and trunk rot.  Plant resistant varieties like the hybrid seedling, use pesticide. Grasscutters are a threat to oil palm  seedlings, they dig them up to the root before feeding on them. Another thing to watch out for is birds,  they feed on oil palm fruits. Use alarm bell to scare them off. Secure your oil palm farming from  anything that can destroy it. 

Application of fertilizer

Apply fertilizer after 3 months of transplanting to the main field. Use NPK  fertilizer. Efficient plant cultivation is secured with a sufficient supply of macro and micronutrients,  including nitrogen, potassium, phosphorus, magnesium, etc. With a lack of nutrients, adequate growing  is impossible.

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Fertilization practices for oil palm plantations recommend nutrient applications in equal  splits, sourcing from farmyard and green mature, neem cake, and synthetic products. Common ways to  provide nutrients in the crop’s cultivation are soil incorporation, scattering, or fertigation. Oil palm  plantation fertilizer requirements differ depending on the tree age, with bigger amounts for mature  plants. 

Weeding

Use weeding machine for weeding, the type that is used for mowing lawns, cutting of grasses  on major roads or in some institutions, it would save cost. The first weeding should be done after 3  months of transplanting into the main field. The second is another 3 months after the first. Laborers can  be used to do the weeding if you don’t have the money to purchase weeding machine. When the oil  palm closes, canopy weeding will be reduced. 

Harvesting the oil palm

Oil palm farming business owners can expect yields after three years of growing. To correctly determine  picking time and avoid over-ripening are essential for palm oil quality. Harvesting begins when 5-8 fruits  drop loose. Ripe fruit is yellow or orange in color, and orange palm oil seeps outside when pressed with  a finger. Fruit bunches are cut manually by knife, chisel, or sickle.

When plants grow too tall, fruit gathering is assisted with a hook. Harvesting machines are a more productive and less labor-consuming  option to manual picking in plantations. In fact, complete machine harvesters are attributed to nearly  double productivity as compared to manual cutting with buffalo carts for transportation.

At the same  time, the equipment required for oil palm cultivation and management is more expensive than human  labor in terms of maintenance and fuel. However, it will give decent returns in the long run. Harvesting  rounds in plantations are repeated about every 10 to 14 days. 

Marketing You Oil Palm Farming Business

The market for palm oil in Nigeria is large. Make contact with dealers of palm oil especially  those from the North and make a deal with them, they will be the ones coming down to your mill to buy  from you. In case you don’t want to process by yourself then go to millers and register with them so you  

can be supplying them whenever you harvest your palm fruits. If you don’t have a mill but wants to  process you can pay a token to the millers and they will process your palm fruits for you. 

Storing you Oil Palm

Red palm oil doesn’t spoil it can be store for many years you can decide to sell them out  during off-peak period. But make sure you process best quality palm oil. 

Risks oil Oil Palm Farming Business

It should be noted that oil palm farming has its own risk, which includes: 

*Communal clashes it can result in property forfeiture just like in the case of Ikot Umo Essien in Akwa  Ibom State and Nkwa in Abia State. Federal Government now occupies their property. 

*Fire outbreak, you can lose your investment if there is fire destruction on your crops. Or any other  natural disaster.

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I am Israel Otoijamun, the Founder of Ofarms.ng. I am a blogger, web and graphics designer, brand manager, product manager and farmer. I have interests in crypto currency, technology, business and agriculture.

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Israel Otoijamun

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