Oil palm farming is one of the most profitable agribusiness ventures in Nigeria due to the high demand for palm oil and its by-products. However, starting an oil palm plantation requires a significant initial investment, including land acquisition, seedlings, labor, fertilizers, and processing equipment. Understanding the cost and potential returns can help farmers and investors make informed decisions.
In this blog post, we will break down the cost of establishing an oil palm farm, intercropping in oil palm plantation and selecting the right seedling to maximize profitability.
Factors Affecting the Cost and Profitability of Oil Palm Farming
Several factors influence the cost and profitability of oil palm farming, including:
- Farm Size – Larger farms require more capital but yield higher long-term profits.
- Seedling Variety –There are two major variety of oil palm seedling in Nigeria, we have Tenera and Malaysia supergene. Malaysia Supergene produce more oil and mature faster than Tenera.
- Location and Land Cost – The cost of land varies across different states in Nigeria.
- Labor Cost – Includes planting, weeding, harvesting, and processing labor.
- Soil Preparation and Fertilization – Proper land preparation and fertilizers improve productivity.
- Pest and Disease Management – Uncontrolled pest infestations can reduce yield and increase losses.
- Processing and Market Access – Farmers who process and sell palm oil earn more than those selling raw palm fruit.
Cost Breakdown of Establishing an Oil Palm Plantation in Nigeria
Below is an estimated cost analysis for setting up a 10-hectare oil palm farm:
1. Land Acquisition (Varies by location)
- Rural areas: ₦300,000 – ₦1,000,000 per hectare
- Semi-urban areas: ₦1,000,000 – ₦5,000,000 per hectare
- Total for 10 hectares: ₦3,000,000 – ₦10,000,000
2. Seedlings Purchase
- Malaysia Supergene seedlings: ₦1500 – ₦2000 per seedling
- Recommended planting density: 140 – 160 palms per hectare
- Total seedlings for 10 hectares: 1,400 – 1,600
- Total cost: ₦2,100,000 – ₦3,200,000
3. Land Clearing and Preparation
- Manual clearing: ₦100,000 – ₦200,000 per hectare
- Mechanized clearing (bulldozers): ₦200,000 – ₦400,000 per hectare
- Total cost for 10 hectares: ₦1,000,000 – ₦4,000,000
4. Planting and Labor Costs
- Nursery management, planting, and spacing: ₦50,000 per hectare
- Total for 10 hectares: ₦500,000
5. Fertilizer and Soil Amendments
- Organic manure/NPK fertilizers: ₦100,000 per hectare per year
- Total for 10 hectares per year: ₦1,000,000
6. Weed and Pest Control
- Herbicides and pesticides: ₦50,000 per hectare per year
- Total for 10 hectares per year: ₦500,000
7. Irrigation (Optional in Dry Regions)
- Borehole installation: ₦500,000 – ₦1,500,000
8. Maintenance and Harvesting Costs (Starting Year 3-4)
- Labor and transportation: ₦200,000 – ₦500,000 per year
9. Processing Equipment (Optional, for Palm Oil Production)
- Manual press: ₦500,000 – ₦1,000,000
- Mechanized processing mill: ₦3,000,000 – ₦7,000,000
Total Estimated Cost for 10 Hectares Over 3-4 Years
- Minimum Investment: ₦10,000,000 – ₦15,000,000
- Maximum Investment (Including Processing Unit): ₦20,000,000 – ₦25,000,000
How to Properly Plant Oil Palm Seedlings for Maximum Growth
Once you have purchased high-quality seedlings from El-emet Agro consultancy, follow these steps for proper planting:
1. Site Selection and Land Preparation
- Choose well-drained, loamy soil with good organic matter.
- Clear weeds and prepare planting holes (60 cm x 60 cm x 60 cm).
2. Spacing and Planting Layout
- Maintain 8-9 meters spacing between trees (about 140-160 palms per hectare).
- Use triangular or square planting patterns for uniform growth.
3. Proper Planting Techniques
- Plant during the rainy season for better root establishment.
- Ensure the seedling’s root ball is intact while transplanting.
- Water regularly in the first few months to prevent transplant shock.
4. Fertilization and Weed Control
- Apply nitrogen, phosphorus, potassium (NPK 15-15-15) and organic manure for healthy growth.
- Control weeds using manual weeding or herbicides.
Common Mistakes to Avoid When Choosing and Planting Oil Palm Seedlings
- Buying uncertified or fake seedlings – Leads to low yield and longer maturity periods.
- Planting in unsuitable soil – Poor drainage or low fertility affects growth.
- Incorrect spacing – Overcrowding reduces sunlight penetration and yield.
- Lack of pest and disease control – Leads to stunted growth and poor fruit production.
- Ignoring proper fertilization – Nutrient deficiency affects oil content and yield.
Best Crops for Intercropping in Oil Palm Plantations
The choice of intercrops depends on the oil palm’s growth stage, climate, soil conditions, and market demand. Below are some recommended crops:
1. Early-Stage Intercrops (1-3 Years After Planting)
At this stage, oil palm seedlings are still small, allowing plenty of sunlight for other crops. Suitable options include:
- Maize – Fast-growing and provides food and income.
- Cassava – A drought-resistant crop that requires minimal maintenance.
- Yam – Thrives in well-drained soils and complements oil palm growth.
- Vegetables (Tomatoes, Okra, Pepper, Pumpkin, etc.) – Provide quick income and improve soil fertility.
2. Mid-Stage Intercrops (3-7 Years After Planting)
As oil palm trees grow taller, they provide partial shade. The following crops can still thrive:
- Plantain/Banana – Tolerant to partial shade and complements oil palm farming.
- Legumes (Groundnuts, Cowpeas, Soybeans, etc.) – Improve soil fertility by fixing nitrogen.
- Pineapple – Performs well under semi-shade conditions.
- Cocoyam – Tolerates shade and grows well in humid conditions.
3. Late-Stage Intercropping (After 7 Years)
Once oil palm trees form a thick canopy, limited sunlight reaches the ground. However, shade-tolerant crops can still be intercropped, such as:
- Cocoa – Can thrive under oil palm shade and provide additional income.
- Ginger and Turmeric – Grow well in shaded environments.
- Mushrooms – Can be cultivated in shaded areas with proper management.
Best Practices for Successful Intercropping in Oil Palm Plantations
1. Choose Crops That Complement Oil Palm Growth
- Avoid crops that compete aggressively for water and nutrients (e.g., sugarcane).
- Select crops with a short growing cycle for early-stage intercropping.
2. Maintain Proper Spacing and Arrangement
- Intercrops should not be too close to the oil palm trees to avoid competition.
- Leave at least 2-3 meters between oil palm seedlings and intercrops.
3. Use Organic Matter and Mulching
- Apply compost, manure, and mulch to improve soil moisture and fertility.
4. Rotate Crops Regularly
- Crop rotation helps prevent soil depletion and reduces the buildup of pests and diseases.
5. Implement Integrated Pest Management (IPM)
- Use natural pest control methods such as intercropping with pest-repellent plants (e.g., neem or marigold).
Conclusion
Choosing the right oil palm seedlings is crucial for a successful plantation. The Malaysia supergene variety is the best choice for maximum oil yield and profitability. Always buy from reputable sources like EL-EMET AGRO CONSULTANCY , and follow proper planting techniques to ensure healthy growth. At EL-EMET AGRO CONSULTANCY we can help set up your oil palm planatation wherever your farm is located in Nigeria, just give us a call today at 07042043835.