Oil palm in Telangana: A national lead worth consolidating via timely course correction

Telangana Emerges as Oil Palm Powerhouse

India is making significant strides in oil palm cultivation, with Telangana at the forefront of this agricultural transformation. In the current 2025-26 fiscal year alone, the country has added 52,113 hectares under oil palm, pushing the total area under the National Mission on Edible Oils - Oil Palm (NMEO-OP) scheme to 241,000 hectares since its launch in 2021. Nationwide coverage now stands at around 600,000 hectares, a testament to growing farmer interest driven by the crop's promise of high yields—up to 10 times more oil per hectare than traditional oilseeds like soybean or groundnut.

Telangana has contributed substantially to this growth, accounting for 12,005 hectares of the new acreage this year, closely trailing Andhra Pradesh's 13,286 hectares. Farmers in the state, particularly in districts like Khammam, Bhadradri Kothagudem, Suryapet, and Nalgonda, are increasingly turning to oil palm for its reliable income potential. The crop allows intercropping with cocoa and other plants, providing steady revenue even during the initial years. This enthusiasm aligns with India's broader goal to cut its 57 percent dependence on imported edible oils, where palm oil dominates the import basket.

The state's proactive approach has positioned it as a national leader, producing notable volumes of crude palm oil and setting the stage for further expansion. With 2.8 million hectares of land identified as suitable across India, Telangana's success story offers a blueprint for other regions.

Ambitious Targets and Government Backing

The NMEO-OP scheme, launched in August 2021, aims to bring one million hectares under oil palm by the end of the decade, with projections for crude palm oil production to rise from 350,000 tonnes in 2020 to 2.3 million tonnes by 2029. Telangana mirrors this ambition at the state level, planning to expand from 36,421 hectares to over 800,000 hectares in the coming years—a 22-fold increase. The state budget has allocated substantial funds, including a billion rupees for an additional 101,171 hectares in one recent year, with total investments projected at 72 billion rupees through 2026-27.

Support extends from seedlings to market linkages, ensuring farmers receive fair prices for fresh fruit bunches. Private players are also stepping in, with investments in processing facilities and finance options for irrigation and infrastructure. This farm-to-market model has boosted confidence among growers, especially smallholders who stand to benefit from the crop's perennial nature and multiple harvests per year. The government's focus on wasteland utilization minimizes competition with food crops, promoting sustainable land use.

"Oil palm cultivation is picking up momentum in Telangana because it offers high returns and fits well with our local farming practices, but we must ensure water management and environmental safeguards to make it a long-term success," said a senior agriculture official involved in the NMEO-OP rollout.

Navigating Challenges for Sustainable Growth

Despite the rapid progress, oil palm's expansion in Telangana faces hurdles that demand timely interventions. Small and marginal farmers often struggle with the crop's long gestation period of three to four years before yields peak, alongside heavy reliance on groundwater in rainfed areas. Environmental concerns, including potential deforestation and biodiversity loss from monoculture plantations, echo global debates on palm oil sustainability.

Groundwater depletion poses a risk in water-stressed regions, while fluctuating global prices can affect profitability. To consolidate its national lead, Telangana must prioritize micro-irrigation, diversify intercropping, and enforce eco-friendly practices. Enhanced seed production, already underway nationally, will meet demand without compromising quality. Investments in processing units, like those announced by major companies, can shorten supply chains and stabilize incomes.

Course correction now—through better extension services, financial incentives for sustainable farming, and research into drought-resistant varieties—can turn these challenges into opportunities. States like Assam and Mizoram are watching closely, ready to replicate Telangana's model with adaptations. By addressing these issues head-on, India can secure its edible oil self-reliance while nurturing farmer livelihoods.

In summary, Telangana's leadership in oil palm cultivation highlights India's push towards reducing import dependence, backed by ambitious targets and robust support. Yet, sustaining this growth hinges on proactive measures to tackle water use, environmental impacts, and farmer viability, ensuring a balanced path forward for the nation's agriculture.