Want To Be an Oil Palm Plantation Owner: Here Are 5 Things to Consider
Owning an oil palm plantation is hard work. In addition to investing time and energy, it also involves a high starting capital. Oil palm plantations take about 3-4 years before any fruits can be harvested.
However, if you choose to stick to owning an oil palm plantation, the returns can be rewarding in the long run. Here are the factors you’ll have to consider when you want to set up a plantation.
Credit: Craig Moray @ Flickr
- Availability of land
The first thing you’ll have to do is the scout for available agricultural land. The land you buy has to be gazetted as agricultural land by the state government. In Malaysia, smallholders usually own an average of 2-3 acres of plantation land. However, it can be as small as 0.5 acres or as much as you can afford.
- Availability of laborers
There are many steps you need to go through once you’ve acquired land for planting. First, you need to germinate oil palm seedlings, clear the land, apply fertilizers and more. You cannot do all these by yourself, so you need to hire laborers to help you.
These tasks are mostly very physically demanding, and you’ll need healthy workers with a lot of stamina. You will also need to budget for their salaries and pay them according to the minimum wage laws of this country.
- Availability of capital
This is the most important part of starting an oil palm plantation. You have to sit down and budget for the different aspects of this process. Here is where your research skills come in. You will have to list down each aspect that requires money, from hiring labor to purchasing seedlings, equipment, land, and more.
Capital can come from your own savings or from a bank loan. The government also offers loans to palm oil entrepreneurs from time to time, as very low-interest rates.
- Availability of time
Since an oil palm plantation takes a long time to produce any profit or income, you should either have savings to last for at least 5-7 years or an alternative source of income during this time.
The starting processes will be very time and resource consuming. You will have to clear the land, using tractors and manpower, before germinating seedlings in a greenhouse and then planting them. After that, you’ll have to maintain and monitor the oil palms continuously. All these take time, so you cannot afford to have a full-time job elsewhere.
- Ability to cover extra costs
As someone who wants to grow oil palms, you should also have some extra money budgeted to cover emergencies and unforeseen circumstances. For example, if there is too much rain for a certain year, harvests may be reduced. Similarly, there may be diseases that cause some of your young oil palms seedlings to die.
Having some extra resources to cope with unforeseen circumstances will help your plantation become more resilient in the future.
As we can see, it does take some amount of determination to be an oil palm planter. However, it is similar to other fields of work too, whereby hard work pays off in the end. You should also make wise decisions and consider all the costs and risks involved in this business.