Scientific formula for fixing the price of oil palm (Elaeis guineensis Jacq.)fresh fruit bunches

摘要

Oil palm (Elaeis guineensis Jacq.) has been introduced crop to India to bridge the gap between demand and supply of vegetable oil requirements of the country. Fixation of price for fresh fruit bunches (FFB) on scientific formula basis is a ticklish issue causing unrest between processors and farmers. Deriving the formula based on oil extraction ratio (OER) is unrealistic as the climatic conditions of the crop growing areas vary drastically and hence have impact on the OER. Similarly the FFB that is arrived to the processing units are a mixture of both young and old plantations which again show variation in the OER. A new approach has been derived using the cost economics of the cultivation and processing to fix the price for FFBs of Oil palm. The formula was derived by taking all aspects into consideration like cost of cultivation and processing of oil palm FFB, price of crude palm oil, kernel oil and palm kernel cake, benefit cost ratio and internal rate of returns and finally net present worth. The formula being followed in Malaysia, the processors remarks on low OER during peak periods and under utilization of mill and the farmers demands of share in the other products like kernels, cake and other online products were reviewed in depth while deriving the present one.