A rough costing for opening 8 hectares of oil palm, through to the first harvest
Not one figure, but four stages. The one most often underestimated is the upkeep in years two and three.
This is one of the questions that arrives most often, and the honest answer is that there is no single figure. The cost spreads over four years, and the largest part of it turns on things nobody can guess from a distance: what is growing on the land now, what the soil is, and how far the block is from a road a truck can use.
What we can give is the frame, with the assumptions written out in the open so you can swap any figure for a local one you know to be better.
Eight hectares, mineral soil, titled and not in dispute, 9 metre triangular spacing giving around 136 to 143 palms per hectare, labour at South Kalimantan rates, and the work contracted out rather than done yourself. Change any assumption and the figures move with it.
Stage 1: clearing and preparing the land
This is the item with the widest spread, because all of it turns on what is growing there now. Scrub and old cropland is far cheaper to clear than wooded ground that needs machinery. It also covers cutting the plantation tracks, the boundary drains, and pegging out the planting points.
For lightly vegetated ground, many growers budget somewhere between four and eight million rupiah a hectare. For heavy ground needing an excavator, that can multiply. Get contract quotes from two or three local contractors before using any figure at all, including this one.
Stage 2: the seedlings
Eight hectares at 136 to 143 palms a hectare comes to roughly 1,100 to 1,150 palms. Add five to ten per cent for supplies, the spares that replace whatever dies in the first year, which brings it to around 1,200.
The price of certified seedlings follows the producer, the age of the seedling and the size of the order, so we do not print a figure here. What matters to know: this is the item you must not save on, and the gap between certified seedlings and seedlings with no provenance is usually far smaller than a single year of harvest. Five signs of a fake seedling is written up separately.
Stage 3: upkeep through the immature years, one to three
Three years with no income at all and the spending running on. It covers fertilising, weed control in the circles and the interrows, pest control, above all rats on young plants, replacing whatever dies, and keeping the tracks and drains up after the wet season.
Fertiliser is the largest part of it and climbs every year as the palms age. The rates by age are in the piece on fertiliser rates; for planning, work out the fertiliser cost per palm per year from local prices and multiply by 1,150.
This is the stage most often underestimated, and it is always underestimated the same way: the budget is worked out for the first year, and then years two and three are assumed to look after themselves. Those three years are no lighter than the first, and by then the money has gone on clearing the land.
If your budget stretches to opening eight hectares but not to keeping them through to year four, opening five and keeping them properly is almost always better. A plantation neglected in its second immature year never catches up, and yields low for the rest of its life.
Stage 4: the first harvest
The first cut is generally between month 30 and month 36 after planting, with small bunches and not much tonnage. Year four usually only covers the running upkeep, not yet the capital spent on clearing.
A new item shows up at this stage: harvesting tools, the chisel and the sickle pole, a wheelbarrow, road repairs so the haulage can get through, and a collection point. Small next to the earlier stages, but often left out of the sums entirely because it is thought about last.
How to use this costing
Get land-clearing contract quotes from two or three local contractors, for the condition of your own block.
Ask for a seedling quote for 1,200 plants, with the certificate numbers.
Work out the fertiliser cost per palm per year from local shop prices, then multiply by the number of palms.
Multiply one year of upkeep by three; that is years one to three.
Add it all up, then put another twenty per cent on top for what you did not see coming.
Set the total against the money you actually have, not against the money you are hoping for.
What you can send us
The size and the location of the block, photos of how it looks now from a few angles, the soil type if you know it, how far it is from a road a truck can use, and the nearest mill. Say what budget you have as well, because that is what decides how much it is sensible to open.
We will put together a stage-by-stage breakdown through to year four, on local figures rather than general ones. That counts as a request quoted case by case, and we tell you the rate first, before any work starts.