Assam tea estates to receive support under central govt oil palm mission

Guwahati, April 4: The central government has allowed tea estates in Assam to avail support under the National Mission on Edible Oils - Oil Palm (NMEO-OP), weeks after the North Eastern Tea Association (NETA) made a formal representation seeking inclusion.

This move is expected to provide much-needed financial and infrastructural assistance to tea plantations in the state, enabling them to diversify and address economic challenges.

The decision was communicated via an official letter from the Ministry of Agriculture and Farmers Welfare to the Director of Agriculture, Assam, on April 1. The ministry has permitted the cultivation of oil palm on up to 5 percent of tea estate land, ensuring that estate owners receive the same financial assistance as other beneficiaries under the scheme.

The NMEO-OP, launched to boost domestic edible oilseed production and reduce India’s dependency on palm oil imports, offers a range of incentives, including:

• Financial assistance for planting materials and management during the four-year gestation period
• Inputs for intercropping
• Support for land clearance, bio-fencing, drip irrigation, bore wells, and water harvesting structures
• Subsidies for harvesting tools and vermi-compost units

The ministry’s letter clarifies that for every 143 oil palm trees planted (the estimated number per hectare), landowners will receive assistance as per the existing scheme guidelines.

The North Eastern Tea Association (NETA) has been advocating for the inclusion of tea estates under NMEO-OP for months, arguing that diversification is crucial for the sustainability of Assam’s tea sector.

In a statement, NETA Adviser Bidyananda Barkakoty emphasized that oil palm cultivation, along with other cash crops like agarwood and spices, can provide an alternative revenue stream for tea estates grappling with financial stress.

A study conducted by NETA concluded that tea and oil palm can coexist without disrupting tea production. The findings further reinforced the need for diversification, citing rising production costs, stagnant tea consumption, price fluctuations, and crop quality issues as major concerns for the sector.

The decision to allow oil palm cultivation on tea estates aligns with policy reforms undertaken by the Assam government over the past few years. In October 2022, the state government permitted the use of 5 percent of total tea estate land for cash crops, including oil palm. Additionally, in January 2025, the Assam Cabinet officially recognized oil palm as a cash crop, paving the way for tea plantations to benefit from agricultural support schemes.

Assam’s tea industry, which completed 200 years in 2023, is globally renowned for its richly colored and aromatic Orthodox and CTC teas. The sector directly employs millions, with many more dependent on its ecosystem.

However, factors such as high production costs, low profit margins, and climate-related challenges have hindered growth.

With about 25 percent of Assam’s tea production being dust-grade, while the remaining output is split between CTC and Orthodox teas, industry stakeholders have been actively seeking solutions to sustain the sector.

The inclusion of oil palm under NMEO-OP is viewed as a step toward revitalizing the industry, ensuring financial stability and encouraging investment in modern plantation techniques.

The central government’s support is expected to help tea estates manage capital-intensive requirements such as irrigation, maintenance, and harvesting, especially during the crucial non-harvesting initial years of oil palm cultivation.

With the NMEO-OP assistance available until 2025-26, tea estates in Assam now have an opportunity to diversify their crops while retaining their core tea production, ensuring long-term sustainability for the industry.