What are Oil Palm Acts?
Once planted, the oil palm tree has a productive life beginning at 4th year and ending at 25 to 30 years. The oil is extracted from the mesocarp of its fruit and its seed kernel. Each palm tree produces around 5-12 fruit bunches every year. Each bunch weighing average 25 kilogram has around 2000 fruits.
One of the key requirements of this cultivation is that the Fresh Fruit Bunches (FFBs) of oil palm are highly perishable and need to be processed within 24 hours after harvesting. If there is delay in processing, quality and quantity both will suffer. This implies that oil palm plantation must go hand in hand with the development of processing facility. However, at farm level this facility can not be viable owing to small size of farms in India. Due to this, some states have enacted laws to mandate the nearby factory to immediately purchase all FFBs produced in the area.
Such acts are in force currently in Andhra Pradesh, Tamil Nadu, Goa and Mizoram. Andhra Pradesh was the first state to promulgate such legislation. This act empowers the state government to declare by notification any area as “factory zone” for the purpose of supply of the Frech Fruit Bunches by the farmers to the factory. The farmers in that area will supply all FFB to a designated factory and not anyone else. This factory needs to buy all FFB produced by all farmers in the factory zone at a price not less than fixed by the government. If the factory fails to buy the FFB without any valid reason, it will be liable to pay compensation to farmers.