Oil Palm Bulletin 50

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Oil Palm Planting in Marginal Soils: Selected Cases

Mohd Arif Simeh*

Oil Palm Bulletin 50 (May 2005) p. 24-30

ABSTRACT

Marginal soils were usually discounted in thepast for planting of oil palm. Currently, the en-croachment into these areas is phenomenal asthere is no more prime land for oil palm plant-ing in the country. Innovations to counter suchlimitations have been successful for the cultiva-tion of oil palm but the cost can be high. Nev-ertheless, on the part of the investors, the highercost can be offset by the higher returns from oilpalm compared to those from other crops. Thispaper evaluates the potential of selected mar-ginal soils, namely deep peat, tin tailings andsteep lands, for the cultivation of oil palm.Specifically, the study assesses the establish-ment cost of an estate and to a lesser extent theinvestment viability.

ABSTRAK

Disebabkan beberapa kekurangan dari segikeperluan pertumbuhan pokok, tanahpinggiran pada masa dahulu telah disisihkanuntuk penanaman sawit. Kini penggunaantanah tersebut untuk penanaman sawit telahmula meningkat berikutan kekurangankawasan baru. Masalah kekangan fizikal bagitanah tersebut telah dapat diatasi melaluibeberapa innovasi tetapi dengan kos yangtinggi; namun tarikan harga yang lumayanmenyokong keputusan pelaburan. Artikel inibertujuan untuk meninjau kekurangan fizikaltiga jenis tanah pinggiran yang biasadigunakan untuk penanaman sawit; iaitutanah gambut dalam, lereng bukit dan tanahlombong.

* Malaysian Palm Oil Board, P. O. Box 10620, 50720 Kuala Lumpur, Malaysia.

INTRODUCTION

Soil suitability classification grades soils by theirseverity of limitations (either physical, chemicalor topographical) and the number of crops, which

Keywords: marginal soils, development costs.

can be grown on the soil concerned (Mohd Taminet al., 1982). Marginal soils classified as Class 3,4 and 5 (Table 1), are characterized as having atleast one serious limitation to crop growth.Under marginal conditions, limitations can existin the form of acute nutrient deficiencies, verypoor drainage, steep slopes, massive laterites(within 60 cm of the soil surface), depth of morethan 60 cm acid peat, sandy texture, strongcompaction, acid sulphate conditions and salineconditions. These soils can be further improvedfor crop growth but the cost can be very high(Pushparajah et al., 1974). This paper attemptsto evaluate three marginal soils often associatedwith investment interest for oil palm planting,i.e. deep peat, steep land and tin tailings.

PHYSICAL LIMITATIONS

Deep Peat

The total area under peat in the country isclose to 2.6 million hectares, the bulk of which isin Sarawak comprising slightly over 1.6 millionhectares. The rest is found in the Peninsular(about 800 000 ha) and Sabah (86 000 ha) (Arifinet al., 1996). The inherent physical and chemicalproperties of peat make its development foragriculture difficult. Depth of peat can rangefrom a few centimetres to more than 9 m, withdeep peat defined for peat lands with peat ofmore than 2 m. Deep peat is common in Sarawakoccupying nearly three-quarter of the overallpeat in the state. In Sarawak, it refers to theAnderson Series 1, 2 and 3 (150-200 cm, 200-250and more than 250 cm respectively). In manydeep peat cases, there are specific locations inestates having different peat depths, sometimesmore than 50 m.

Areas under deep peat are low-lying,poorly drained basins, mostly located alongcoastal lands. Deep peat has high water tableand it can become very swampy especially in thepeat dome areas. The pH is low, 3.0 - 4.5 (MohdTayeb et al., 1982). Drainage and watermanagement have become the integral part ofdeep peat reclamation and development. FFB

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TABLE 1. SOIL SUITABILITY CLASS

Class Character is t ics

Class 1 Soils with no limitations or only minor limitations to crop growthClass 2 Soils with moderate limitations to crop growthClass 3 Soils with one serious limitation to crop growthClass 4 Soils with more than one limitations to crop growthClass 5 Soils with at least one very serious limitations to crop growth

Source: Mohd Tamin et al. (1982).

yields were reported low to begin with andproduction rapidly declined to uneconomicallevels about 10-12 years from planting (Singh,undated). Most development work is mechanizedwith the use of broad tracked excavators.

According to Abdul Jamil et al. (1982), oilpalm constituted the largest portion of peat (inthe Peninsular) compared to industrial orhorticultural land uses. Almost one millionhectares of peat in the Peninsular have beenutilized for various purposes. In Sarawak, onlyone-third of the available peat has been utilizedfor oil palm.

Steep Lands

Steep forestlands have been observed to beincreasingly cleared for agricultural activities.This is despite recommendations by theDepartment of Agriculture (2001) that hill landdevelopment for commercial planting ofperennial crops is only allowed for lands withgradient of up to 25°. Such guidelines havesomewhat been ignored and it is now common toobserve steep lands with terrain between 35°-40° being cleared without sufficient recognitionbeing given to the attendant problems of erosion,low yield and expensive logistics.

Steep lands limit the efficient use ofmachinery, in particular, bulldozers (McEwen,1974). Machines work better on slopes of no morethan 25°. The major concern of oil palm plantingon steep landscape is the associatedenvironmental effects or externalities. Coupledwith the high cost of development and estatemanning, it is apparently impractical anduneconomical to plant oil palm in the long run.

Tin Tailings

There are approximately 200 000 ha of tintailings in the country. Most of them are locatedaround urban areas such as Ipoh, KualaLumpur, Kuala Langat and Sungei Lembing.Since tin ore separation is done through awashing and sedimentation process, the

resulting tailings are low in plant nutrients andorganic matter (Lim et al., 1991). The absence oforganic matter and the predominance of coarsematerials, mainly sand or inert quart particles,have resulted in tin tailings having excessivedrainage and low water and nutrient retentioncapabilities. High leaching propertiescompounded with high ground surfacetemperature of between 40oC-50oC often resultedin slightly low survival rates for oil palmseedlings. Most tailings are alkaline with a pH of7-8.

However with heavy application of organicmaterials, tin tailings have been used foragriculture for a long time especially for thecultivation of short-term crops. Very little tintailings have been developed for oil palm. Lim etal. (1991) indicated that experimental plots of oilpalm have shown first and second year yields of7.88 fresh fruit bunch (FFB) t ha-1 and 13.94 FFBt ha-1, which are comparable to those fromRenggam Series soils (7.56 FFB t ha-1 and 13.43FFB t ha-1; respectively). Nevertheless, as thereis no proper tenure system for tin tailings, noperennial crop development has been recordedexcept those on a joint venture basis with thestate governments. Therefore, so far only short-term crops have been associated with tintailings. Star fruit and papaya are two popularcrops grown on commercial scale in many tintailing areas. Successful farms are usuallylocated close to streams and ponds as watering iscrucial for crop development.

DATA SOURCE

This evaluation is based on an estate case study.For deep peat, one public listed estate waschosen from the deep peat area in Miri. From atotal area of 2400 ha, a sample block of 600 hadeveloped in 2000 was studied. As for the case ofsteep land, a public agency estate in GuaMusang was taken as a sample case with an areaof 152 ha (phase 1 developed in 2001). An estatefrom Menglembu, Perak which is a joint venture

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between a private limited company and the stategovernment was chosen as the sample case fortin tailings. It has 141 ha of oil palm planted in2001. Therefore, the study was purely on estatebasis and it is only as a representative case.

DISCUSSION

Cost Implications of Oil Palm Planting onDeep Peat

The immature cost of oil palm planted ondeep peat can be quite substantial (RM 8737ha-1). The development work in the first yearalone is estimated at RM 4851 ha-1 (Table 2).Major costs are the drainage systemdevelopment which is estimated at RM 11 876ha-1 as well as road construction (RM 1400 ha-1)and felling (RM 1165 ha-1). The costs are higherthan those for average soils due to theinnovations needed for successful oil palmplanting in this soil.

Drainage system. Basically, the drainagesystem consists of a network of field, collectionand perimeter drains. One field drain issufficient for four rows of palms (Noah, 2004).Depending on the rainfall of the area, thecollection drains are spaced 250 m apart whichreflects the carrying distance. Due to labourshortage, the carrying distance is now shortenedto 150 m incurring a slightly higher drainconstruction cost. The perimeter drains and theirspacing depend on the area served. As importantas drainage is, the foremost consideration is notto over-drain the area. Water level needs to bemaintained at about 75 cm depth all the time tominimize peat shrinkage and drying out of thesurface layers. This is achieved through theconstruction of weirs across the collection drainsand water gates at the perimeter drains. Apartfrom controlling the pH of the estate, prudentwater level management helps in reducingtermite population. The cost of constructing thedrainage system can be as high as RM 1876 ha-1.

Roads. Deep peat soils are soggy and soft.Proper designs are thus required so that estatesare able to bring in heavy machinery for fieldoperation as well as lorries to evacuate FFB atthe later stage (Salleh, 2004). Two roads – fieldroads and the main roads must be well connectedto serve the need for smooth evacuation of FFB.The former are designed according to carryingdistance which is normally set at 250 m.Nevertheless, as mentioned earlier, it is commonin the current deep peat estate planning toreduce the carrying distance to 150 m in view of

labour shortage and to increase the harvestingefficiency, in particular for loose fruit collection(Mohd Anim, 2004). The new carrying distancemay translate into a higher cost for roadconstruction. The overall cost related to roadconstruction is estimated at RM 1400 ha-1.

Row compaction. The loose nature ofpeat presents anchorage problems to oil palm.Due to drainage, considerable subsidence occurswhich may lead to lodging of the palms. All peatsoils, more so with deep peat, requires rowcompaction. The excavator moves into theharvesting path pushing the residual timber tostacking rows. The excavators make two to threeruns over the area, compacting the peat with itstracks. Compaction has been reported to improveFFB yield by 17% (Mohd Tayeb et al., 1984) to25% (Singh, 1984). The areas are compacted atthe cost of RM 200 ha-1. The use of heavymachinery is inevitable for land preparation. Asthe areas are swampy, compaction works have tobe done prior to drainage works. This oftencauses delays besides being costly. Compactionworks are more difficult during the rainy season,especially in peat dome areas.

Cost Implications of Oil Palm Planting onSteep Lands

Table 3 shows that the immature cost foroil palm planted on steep lands can be as high asRM 7679 ha-1. In the first year of estatedevelopment, RM 3817 may be incurred fordeveloping the land for oil palm planting. At thedevelopment stage, steep land developmentresults in environmental degradation. Moreimportantly, mechanized felling, stacking andterracing often expose the steep landscape tosurface run off and erosion. Delay in plantingmay aggravate erosion problems. At theimmature stage, erosion related problems suchas denudation of the land and ironically, silting-up of terraces, roads, drains, etc. are normallyvery serious on newly developed landscape. Theinaccessibility of planting points on theindividual terraces to wheeled vehicles requiresthat increasingly scarce labour be devoted toalmost every phase of field planting andmaintenance, such as carrying the plantingmaterials, holing, fertilizer application, sprayingof weedicides, etc.

At the mature stage, labour intensiverelated problems continue. Adding to theincreasing demand for labour is the increasingFFB production where with the scarcity inlabour supply, the harvesting round and loosefruit collection can be affected. If labour can be

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TABLE 2. DEVELOPMENT COST OF DEEP PEAT SOILS

Cost items Year 0 Year 1 Year 2 Year 3 Total

Felling, stacking and under brushing 1 165 - - - -Road construction 1 400 - - - -Drainage system 1 876 - - - -Holing - 96 - - -Planting materials - 760 - - -Compaction 200 - - - -Other cost 210 - - - -Upkeep - - 820 1 100 -Fertilizer - 250 340 520 -

Total 4 851 1 106 1 160 1 620 8 737

Note: Upkeep includes costs of weeding, maintenance of drains, bridges, paths; soil/water conservation, cover crops,pruning, pest and diseases control, castration as well as boundaries and surveys.

TABLE 3. DEVELOPMENT COST OF STEEP LANDS

Non-recurrent costs Year 0 Year 1 Year 2 Year 3 Total

Felling 1 100 - - - -Terracing and construction of bunds 1 188 - - - -Road construction 944 - - - -Drainage system 335 - - - -Holing - 120 - - -Planting materials - 820 - - -Other cost 250 - - - -Upkeep - - 750 860 -Fertilizer - 351 401 560 -

Total 3 817 1 291 1 151 1 420 7 679

Note: Upkeep includes costs of weeding, maintenance of drains, bridges, paths; soil/water conservation, cover crops,pruning, pest and disease control, castration as well as boundaries and surveys.

made available, field maintenance and FFBharvesting can be very costly.

A radical approach must be advocated inplanting oil palm on steep land. It involves theconstruction of over-sized terraces that areeffective in containing run off, reducing soilcompaction and facilitating mechanization.During felling and clearing, wherever possible,chainsaws are to be used in place of heavybulldozers to fell the trees. Clearing is done inthe drier months.

Instead of the normal 3-4 m wide terracefor every planting row, a wider terrace isconstructed for every contour planting points tocheck and contain run offs. For roadconstruction, motorable road network can bedeveloped on the wide terraces to allow tractormounted equipment and implements to bedeployed to virtually every corner of the steepland. Holing and planting are normally

mechanically done. If motorable roads can beconstructed, mechanical holing can be doneusing a tractor mounted mechanical auger whichcan complete 400 holes per 8 hr day.

During the immature stage, erosionrelated problems such as silting of the terraces/roads/drains, is common. At the mature stage,labour shortage may aggravate reduction ofharvesting round, evacuation of harvested FFBand collection of loose fruits.

Cost Implications of Oil Palm Planting onTin Tailings

The overall immature cost of oil palmplanted on tin tailings is shown in Table 4. RM6806 is expected to be incurred for theestablishment of the estate. Typical tin tailingsare relatively flat, with sand bunds and ponds.Lim et al. (1991) stated that there is a 1-1.5 mof consolidated slime layer (hardened) overlying

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TABLE 4. DEVELOPMENT COST OF TIN TAILINGS

Cost items Year 0 Year 1 Year 2 Year 3 Total

Land cleaning* 1 276 - - - -Land preparation 463.7 - - - -Road construction 357 - - - -Drainage system 168 - - - -Holing - 666 - - -Planting materials - 657 - - -Other costs 185 - - - -Upkeep - - 860 976 -Fertilizer - 391 230 577 -

Total 2 449.7 1 714 1 090 1 553 6 806.7

Note: * Refers to cost related to cleaning of sand mountains and submerging of sand domes. Upkeep cost includescosts of weeding, maintenance of drains, bridges, paths; soil/water conservation, cover crops, pruning, pest anddisease control, castration as well as boundaries and surveys.

1-10 m of slime. This, together with high mid-day temperature, may lead to poor oil palmestablishment. Idle tin tailings are normallyinfested with lallang. The coarser the sandparticles, the more serious will be the soillimitations. Therefore, each planting point needssoil improvement. To enhance available soilmoisture, big hole technique measuring about1 m3 is required for planting with the use of topsoil, POME (20 kg) and EFB mulch (200 kg).Where possible, drip irrigation will enhance cropestablishment.

Cost Comparison and Viability

In general, the first three yearsestablishment cost on marginal soils is higherthan the cost on normal soils. Deep peat cost ofestablishment is 65% higher than that on normalsoil, compared to 45% more in the case of steepland and 28% more for tin tailings. Thepercentage differences in cost according tovarious cost breakdowns are given in Table 5.

Costs and revenues for the estates werenot compared over the medium-term because theyield records were only obtained for the first year(Table 6). Among the three selected marginalsoils, the first year yield of tin tailings is thelowest (5.97 t FFB ha-1 yr-1) compared to steeplands (8.87 t FFB ha-1 yr-1) and deep peat (10 tFFB ha-1 yr-1). Being low yield bearing soil andhigh development cost, the unit cost of FFBproduction for tin tailings is high (RM 389.30 t-1)compared to deep peat (RM 251.60). The yieldpotential of oil palm planted on steep lands ishigh but due to logistic and maintenanceconstraints, its FFB production cost is slightlyhigher at RM 311.80 t-1 making it less attractive

compared to deep peat. Although theoreticallythese unit costs will eventually reduce over theyears, the slower growth in yield expected for tintailings and increasing physical limitations(especially harvesting and upkeep) for the case ofsteep lands, longer payback period in investmentfor these soils is expected.

With lower production cost for the firstyear, deep peat is more viable for planting oilpalm. Furthermore, tin tailings contain heavymetals which may lead to hindrance inmarketing as the world trade is becoming moretransparent. Apart from that, tin tailings haveno land tenure as the land belongs to thegovernment. A temporary occupational licence(TOL) can be applied but it is only given out forsmall tract of land. It is therefore moreeconomical for farmers to cultivate fruits such ascarambola and pomelo which give higher returnfrom small areas. Steep lands with slopes morethan 25° should be reserved for forest as theirdevelopment for perennial crops may lead tolong-term environmental externalities.

CONCLUSION

In the earlier phase of oil palm development inthe country, soil classifications were strictlyobserved and became the standard criteria indevelopment planning; and marginal lands werediscounted in site selections. However, theremunerative nature of oil palm cultivation aswell as the scarcity of prime lands hasoverlooked the need for soil optimality. Marginalsoils, compared to the average soil, are costly todevelop. Generally, the establishment costs fordeep peat, steep lands and tin tailings are higher

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TABLE 5. PERCENTAGE DIFFERENCES IN COSTS COMPARED TO NATIONAL AVERAGES (%)

Cost items Deep peat Steep lands Tin tailings

Felling 54.92 46.28 69.68Terracing/land preparation -100 360.47 79.73Road construction 677.78 424.44 98.33Drainage construction 972 91.43 -4Holing -46.96 -33.70 267.96Planting materials 19.31 28.73 3.14Non-recurrent cost 16.67 33.33 11.11

Note: National averages are from MPOB surveys (unpublished).

TABLE 6. FIRST PRODUCING YEAR COST COMPARISON

Deep peat Steep lands Tin tailings

First year harvest (t FFB yr-1) 10 8.87 5.97Establishment cost (RM ha-1) 8 737 7 679 6 806.70Amortized cost (RM ha-1)a 416.04 365.70 324.13Mature cost (RM ha-1)b 2 100 2 400 2 000Total cost (a+b) (RM) 2 516.04 2 765.70 2 324.13Unit cost of production (RM t-1 FFB) 251.60 311.80 389.30

at RM 8737, RM 7679 and RM 6806.70 ha-1

respectively for deep peat, steep lands and tintailing compared to about RM 5000 – RM 6000for the average soil. Expensive cost items includeroad and drainage construction for deep peat,road construction and terracing for steep landsand road construction, lining and holing for tintailings. These costs were based on 2003 estateoperation. Current figures may escalate due tohigher prices of diesel and fertilizers.

Among the three selected soils, the firstyear yield’s of oil palm in deep peat and to acertain extent, steep lands are as good as thoseon normal soils. Nevertheless, as thedevelopment cost of the latter is high, it is lessexpensive to produce FFB for the former. Tintailings are low yielder and with higher cost ofdevelopment, its unit cost is the most expensivecompared to steep lands and deep peat.

Thus, despite being expensive to constructdrainage, road and to undertake felling/underbrushing for deep peat; it is the best of the threemarginal soils. More importantly, there are largeareas of deep peat in particular, in Sarawak;compared to smaller and more scattered tintailings and steep lands. Tin tailings and steeplands (of more than 25°) need to be reserved forsmall scale planting of cash crops or fruits in thecase of the former and for forest in the latter.Tin tailings development for oil palm is notrecommended in view of the land tenure systemas well as its technical limitations. Steep lands

are also not suitable for environmental reasons.

REFERENCES

ABDUL JAMIL, M A; CHOW, W T; CHAN, Y Kand SIEW, K Y (1982). Land Use of Peat inPeninsular Malaysia.

SINGH, G (undated). Oil palm cultivation onpeat soils in United Plantations.

Mc EWEEN, J F (1974). Mechanisation of jungleclearing. Proc. of the RRIM Planters’ Conference.

LIM, K H; EBRAHIM, H and PILLAI, K R(1991). Trial on oil palm planting on tin tailings.Proc. of the 1991 PORIM International Palm OilCongress – Agriculture Conference.

MOHD ANIM (2004). Personal communication.

MOHD TAMIN, Y; AMINUDDIN, Y and TAN, SL (1982). A Special Report on Agricultural LandUse in Peninsular Malaysia. MARDI.

NOAH (2004). Personal communication.

MOHD TAYEB, D; A B HAMDAN; M AHMADTARMIZI and A ROSLAN (1982). RecentProgress on Research and Development on Peatfor Oil Palm.

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MOHD TAYEB, D; ARIFFIN, D; A B HAMDAN;Z ZIN ZAWAWI; T M AHMAD; S ABDULSAHAR and H ZULKIFLI (1984). Research andDevelopment Towards Optimising Managementof Peat Land for Oil Palm Planting.

SALLEH, M Z (2004). Personal communication.

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