Oil palm plantation: A hype that never came to fruition

Abul Hossain and friends bought a couple of hills in Khagrachhari's Matiranga in 2004. The hills were covered in dense native forest, inhabited by a great number of diverse wildlife. He however always knew that even a rich forest does not fetch much money, and he had to put it into use someday. 

In 2007-8, he clear-felled the forest and planted oil palm saplings in thousands. The decision was taken after some organisations promoted oil palm cultivation across the country and presented it as a crop with high potential.

Fast forward to 2022, Abul Hossain is replacing his palm gardens with timber trees such as teak.

"The first harvest that came after five years was good, but we found no one to sell it to," Abul told The Business Standard. The 35 acre garden had 20,000 trees. Fruits could be harvested after every three months.

The organisations that promoted the plantation could not be reached. Abul cannot even recall their name properly now.

"We invested Tk1.5 crore in this, but have not received any benefit," Abul said. The saplings cost him Tk110 each. Also, razing the forests and maintaining the palm gardens required a lot of investment.

There were 6-7 lakh oil palm trees in Khagrachari, Bandarban and Rangamati, Abul said. Now the planters, utterly disappointed, are cutting the trees down, and replacing them with fruit and timber plants. 

Abul himself has cut half of his trees. His present financial state has deteriorated to such a point that it does not even allow him to cut all the trees at a time. Few months back, he felled five acres of palm plantation, and planted teak, Abul mentioned.

But didn't he sell any palm at all? We asked.

Some time ago, a man bought palm fruits from him for Tk10 per kg, he informed me.

"After collecting the fruits and sending them to the collection points, we profited only Tk2-3 per kg. Given the size of the investment, this is nothing," Abul said.

The man who bought the palm, Arab Ali, told TBS that an informal, tiny factory in Chattogram is extracting palm juice to supply it to soap factories. The demand is low, he said.

The same predicament faced planters across the country. Rokon Ujjaman, a tea planter from Panchagarh, said similar organisations came and motivated farmers to buy saplings from them and grow palm gardens, which some farmers did. As those shady organisations vanished, they eventually gave up hope and cleared the plantation areas to grow something else, particularly tea.

But there have been efforts to complete the supply chain.

A farm in Meherpur, Botanica Agro Ltd, set up a mill in the district's Bscic industrial area in 2013. They collected investing partners for the purpose, motivated farmers to take care of palm trees and assured good returns, dubbing palm oil as 'liquid gold.'

The farm, however, did not see much success in operation. 

"By the time we started operations, people had lost interest in palm. They wouldn't take care of the plants, so the harvest wasn't good," recalled Kazi Mehedi Hasan, former admin director of the farm.

Two local engineers built the oil extraction mill with a combination of imported machinery and locally sourced components. The planters from CHT also tried a similar approach, but did not succeed.

"Instead of producing oil, people were more interested in selling saplings, which were sold at a price up to a whopping Tk1,500," Mehedi said.

Many palm gardens were grown in the Khulna, Jashore, Chuadanga, and Meherpur areas, he added. The gardens were 15-20 bigha in size. "We had the capacity to process 1-1.5 tons of palm every day. But we could not even collect 100 kg of palm fruit per day," lamented the entrepreneur.

As a result, the factory soon shut down.

Mehedi said it was the first palm oil factory in the country. 

Agriculture ministry sources said palm is not in their list of 104 agricultural products, and the plantations were done without their consultation. 

But it was not done only under private enterprise. The Bangladesh Forest Department also created palm gardens. 

"The Forest Department did some palm plantations on trial during the period of 1970-80. It failed. First reason, we do not have enough land for large scale plantation; secondly, the palm produced did not have the standard protein level, and production was not satisfactory," Mollah Mohammad Mizanur Rahman, Assistant Chief Conservator of Forest, Social Forestry and Extension, Bangladesh Forest Department, told The Business Standard.

Palm plantation was declared a failure, and it was never planted again by the Forest Department. But the planted trees were not felled either. There are palm gardens in Satchari National Park, Khadimnagar National Park and other places that have been there for decades, which could have been a natural habitat of wildlife.

The existing private plantations of palm are mostly located on hill lands, which were created by razing forests. The ecocide is not going to pay off, the forest official said.

"As far as I understand, there is no future for these plantations, there is no production potential," Mizanur Rahman said.

Very recently, a company named MRT Agro Products Bd Ltd has started producing refined palm oil in their Mymensingh factory with their rice bran oil plant. Arab Ali, the man from Khargachhari, works in the supply chain of  this company too.

"We manage to collect 100-200 tons of palm every month. The produced oil weighs 20% of it. Some months, we see no collection at all," said Rafiqul Islam, a director of MRT Agro.

The company collects from 1-2 plantations located in the CHT. It has been in operation for the last eight to nine months. 

We asked Abul Hossain, the planter from Khagrachari, if he could supply his palm directly to MRT Agro to ensure profitability. He said collecting enough palm to send it to Mymensingh was not possible for them. Supplying a smaller lot is not profitable, adding locally established factories would be a solution.

"The only hope left is to be able to cut all my palm trees," said the frustrated planter.