Comprehensive assistances right from plantation development to purchase of Agarwood
Agarwood is a crop of commercial value. In order to broaden our knowledge base in the cultivation of Agar crop, we travelled the length and breadth of the globe, to every country that cultivated Agarwood, and conducted independent research. Based on the results of our research within India and abroad, in 2006, we undertook the project of the model cultivation of Agarwood in parts of Karnataka. After intense research, the very first large-scale plantation was established at Vanadurgi Estate in ——-, in the year 2007. Later on, following its success, the crop was spread to the other parts of Karnataka, and to other south Indian states.
For a new farmer who wishes to plant Agarwood, selection of land with suitable climate is the primary factor. The company promotes the crop only if it’s in the right land and the right climate. Right planting system also plays an important role in the long-term viability of the crop. In this regard, our organisation will visit the farm where the planter intends to plant the tree and provide him with the necessary information. This crop can be cultivated easily in a wide variety of soils including rainforests, and doesn’t demand too much of labour or investment. In fact, it is a crop that is easier to cultivate and earns more revenue than traditional crops.
The company advises the farmers to cultivate the trees in zero-budget techniques with minimum investment and keep the production cost as low as possible.
During the first year of crop promotion in 2009, over 700 planters from about 5 districts of Karnataka took up the cultivation of Agarwood in association with our company. The positive response and co-operation that we have received from these planters over the years has lent new zeal to our endeavours. Vanadurgi is the first company that promoted the crop in South India, and over 2.5 million trees have been planted under the guidelines of the company. In the coming years, the company will encourage the cultivation of Agar in specified areas, in accordance with the demand in the market.
We fervently hope that Agarwood will emerge as a distinctive economic force in an agricultural enterprise that prospers on planters’ participation and partnership. The well-being of one and all, especially farmers, is implicit in this hope of ours. We are always happy to provide with all the necessary support for the promotion of the crop.
While taking up Agar cultivation on a commercial scale, the choice of the best species of plants is very important to get the best grade Agarwood. When trees are harvested, they should be able to give a good yield, for which resin quality, harvest time, fast growth etc., are the key factors. Considering all these aspects, our company has identified good varieties of Agarwood and has been providing seedlings of the genetically traced variety called A-12 at a reasonable price. In order to avoid duplication by private nurseries, we have printed our brand name on each polybag of seedlings.
Following are some of the key points in the selection of seedlings
As Agarwood is a perfumery ingredient, each variety has a different aroma profile. Farmers have to plant the right variety that can produce Agarwood of good aroma.
- The quality and quantity of Agarwood chips and oil depend on variety. There is a lot of price difference between each grade. Good income is possible only if the tree produces superior grade of resin.
- Inoculation is successful only for specific varieties, therefore only varieties which respond to inoculation should be planted. Since inoculation is an expensive procedure, if unsuccessful, it will result in a waste of money.
- At present, subsidy from the Horticulture Department in Karnataka is given only for seedlings provided by Vanadurgi.
- The cost of transportation, planting, pitting, weeding etc., is the same for any seedling. So, if you calculate the cost of planting and maintenance for one year, there is not much difference in the total cost of plantation development for nursery seedlings and our genetically traced seedlings. However, when the trees are harvested after 8 years, if they do not have resinous Agarwood, all the efforts will go a waste. So, it is better to go in for the variety of seedlings which we provide.
- There are 16 different varieties of Agarwood. On an average, out of every 100 trees, only 7 trees produce commercially valuable resinous wood. Seeds should be collected from good mother trees. Normally, seeds are collected from trees which are previously harvested, and new suckers are developed by regeneration, and then the seeds are used for germination to get the character of mother trees.
At Vanadurgi, the adoption of innovative technology has resulted in numerous modifications to the diverse aspects of the Agarwood industry. Technology plays a major role at every step, resulting in enhanced production and decreased production cost. With the right use of technology, Vanadurgi produces superior quality products at reasonable prices, something that the industry looks forward to. The company has developed many in-house technologies with the active assistance of its sister concerns.
- The company had developed most of its plantations in the unique inter-cropping system where 3 to 4 compatible crops are grown in the same place, with the right spacing, thus accounting for low production costs
- Plantations are promoted in ideal locations based on climate, elevation, soil fertility, topography, rainfall, water source etc. The company has introduced a genetically traced species to get better results in terms of productivity and quality.
- The company scientists provide regular technical support to manage irrigation, fertigation, and disease and pest management.
- The company’s research has led to the inoculation technology that produces less volume but better quality resinous wood.
- The company offers end-to-end solutions with advanced technologies in harvesting and regenerating the trees as well.
- The company carries out various activities to be in regular touch with the planters, which impacts plantation management.
- Field officers will carry out periodical inspections to examine the growth of trees and recommend the necessary steps to be taken.
- Field inspectors will visit each and every farm, once a year, to verify the crops.
- Company scientists will provide regular technical support to manage irrigation, fertigation, and disease and pest management.
- Farmers are guided in agricultural aspects, provided cultivation manuals, technical guidelines etc.
- A diary for each farm is maintained with copies of one each with both the farmers and the company.
- Field visitors, after examining the plantation, will note the information in the diary.
- Farm diary with previous history will be useful in the analysis and estimation of various aspects of plantation management.
MEMBERS’ ANNUAL GENERAL BODY MEETING
We are in the effort of making this Agarwood project a collective, transparent, and progressive venture.
As the planters are also the shareholding partners of the company, care is taken to maintain transparency at each and every stage of our activities. An annual general body meeting is organised once a year, where all the issues are discussed, and important decisions taken, after considering the suggestions given by the planters. For the attending members, the company also provides information on various agricultural aspects, compatible crops, technical knowledge regarding inoculation etc.
~”We are thankful to all of you for joining hands with us in making this a successful endeavour. “~
In order to operate efficiently, the company has several executive committees in place with progressive farmers as its members. Further, the company holds directors’ meetings regularly and as and when required, to plan and implement various activities and development programmes.
The National Medicinal Plant Mission Project of Central Government’s AYUSH Department offers subsidies for the cultivation of medicinal plants, especially those that are on the verge of extinction, like sandalwood, Agarwood etc. Agarwood cultivation is given 75% subsidy.
In this regard, our organisation had approached the AYUSH Department in the year 2009 itself, and provided detailed information about farmers who had planted Agarwood in Karnataka, and requested for subsidy. The Joint Director of Horticulture, Hulimavu, Bangalore inspected the plantations along with the Assistant Director of Horticulture and the Deputy Director of Horticulture, and assessed the cost of cultivation. The average number of plants per acre was around 170, taking into consideration different planting models with variation in the number of plants per acre. The cost of cultivation includes material and labour costs, which was Rs 9,405 in the first year, Rs 2,033 in the second year, and Rs 988 in the third year, totalling to Rs 12,436.
The cost of cultivation was re-estimated in 2018 as per the prevailing cost, and it was estimated as Rs 19,530 per acre. For the first year it was Rs 14,769, for the second year Rs 4,761. Subsidy was given to farmers for a few areas during 2016-17.
Our organisation had approached the Assistant Director of Horticulture with the list of farmers interested in cultivating Agarwood during 2017-2018. Based on this, the Department of Horticulture had allotted subsidy for 675 eligible farmers who had planted the crop in 35 taluks of 7 districts.
Apart from the subsidy from the National Horticulture Mission, the company is pursuing the government to sanction subsidies to farmers through various other schemes like social forestry, wasteland development etc.
Vanadurgi has planted crops in its own plantations to a large extent. Also, over 30% of trees in the project are planted by members of the Vanadurgi Group and its associates. Further, the project is going on with the unique contract farming model between the company and the farmers. All the trees in the project are planted through a contract which includes various aspects of plantation development, management, processing, and marketing model.
An agreement is drawn and signed between the planters and the company, stating the responsibility of each party until the final harvesting of trees. The summary of the agreement is that the responsibility of the planter is to cultivate the crop as per the technical guidelines given by the company, and the company provides all the required services, throughout the crop period. It also provides the required support for inoculation, harvesting and regeneration. The company will establish the processing centres and take care of processing and the sale of inventories. Each party has to take care of its costs.
Both the planters and the company have to sign an agreement stating that the planters will sell their trees only to the company, and the company will provide long-term services and best market prices.
AGARWOOD MAGAZINE & NEWS
A quarterly magazine is circulated among the members of the Vanadurgi organisation, free of cost, to provide updates on the latest local and international news on Agarwood, as also news on markets, farmers’ opinions, agricultural management techniques, processing etc.
The company has an in-house research wing engaged in agricultural and artificial inoculation technology development. We have collaborations with government forestry institutions and agricultural universities for research and development related to Agarwood. We are also associated with well-experienced overseas partners in the field of artificial inoculation and processing.
While we have collaborations with the Institute of Wood Science and Technology, Government of India, for technology development, the Institute of Wood Science and Technology of Forest, Bangalore, is working on the development of artificial inoculation for mature trees. Our organisation, along with the Institute of Wood Science and Technology of Forest, and The Department of Science and Technology (DST), Government of India, jointly funded the project for artificial inoculation technology using the local fungal strain.
Research activities are also on with government and private institutions to develop a comprehensive artificial inoculation technology and scientific and modern methods of cultivation. Associations are also in progress for research and development with the Horticulture Department, forest departments, agricultural universities, forestry colleges, medicinal and aromatic plant boards etc. We have collaborations with organisations and individuals with a vast knowledge and technology in the Agarwood industry around the globe. All these research activities are aimed at helping farmers in the better development of their farms.
RESINOUS WOOD PRODUCTION
In commercial Agarwood cultivation, it has now become possible to yield Agarwood even from 7- to 8-year-old (sometimes even younger) trees by drilling artificial holes in their trunks and infecting them. The main principle of all these processes is to drill holes in the tree trunk to inoculate a mixture of chemicals, organic compounds, or microorganisms.
Sixteen different technologies for inoculation have been developed at Vandurgi. Some of the techniques are developed in-house with a comprehensive technical knowhow of artificial inoculation. And few technologies are also developed in fruitful collaborations with leading international companies. Such patented technologies are currently adopted in association with overseas partners at our plantations. Based on requirement, the company identifies mature tress to be inoculated each year by discussing with farmers who wish to start Agarwood production.
Inoculation was started in the region in 2014. Further, during the years 2015 and 2016, new technologies were introduced, and they are still under trial. After 2017, commercial inoculation was started. We have a well-trained inoculation team that identifies trees, inoculates them at the right time, and carries out booster inoculation if required. Inoculation charges are reasonable, and it is on cost-to-cost basis for its member planters. Currently, inoculation is going on in all the districts of the planted zones.
Further, the company has conducted research that has led to an inoculation technology which produces less quantity but better quality resinous wood. It is an efficient method that resembles the natural phenomena where simple and cost-effective steps are adopted. The results, so far, have shown good quality resinous wood, similar to that of wild Agarwood in terms of chemical constituents and the essential oil content, with a strong fragrance, ideal texture, and desirable black resin.
The company promotes the crop in climatic zones that support the trees to be naturally drilled by insects and infected by fungi. We are training farmers to apply traditional inoculation methods to their well-grown trees themselves, to get better quality, and to save on costs as well.
Based on requirement, the company identifies mature tress to be inoculated each year by discussing with farmers who wish to harvest their trees. This depends on the company’s forecast for sales, and the contract with buyers for the supply of products.
The right time for harvest is from February to March, and this may continue till June, depending on the commencement of rains. Our team will inspect the trees and provide advice on identifying the right trees that are ready for harvesting by examining the infection rate. The age or size of the tree trunk does not decide the harvest time of commercially grown Agarwood. Trees can be harvested only when the formation of resinous wood is complete. When Agarwood is grown as a commercial crop, harvesting has to be done at a specified time for certain trees, making it a constant operation.
Harvesting is done based on the method of inoculation followed for that particular tree. In general, trees which are inoculated for oil extraction will be harvested after 12 to 24 months. If trees are inoculated for chips, the harvesting time will be after 3 to 4 years, as longer the time before harvest, the better the quality.
On an average, if commercially grown Agarwood trees are inoculated when they are 7 to 8 years old, then they are ready for harvest around their 10th year. Going by this timeframe, returns from Agarwood trees can be expected 8 to 10 years after they are planted.
At Vanadurgi, we have been harvesting the trees first inoculated since 2014. And the quality of Agarwood produced was satisfactory. Encouraged by this success, new technologies with better production in terms of the quality and quantity of material have been introduced, and is now under use.
After the harvesting, the tree will be allowed to regenerate. Post harvest, we advice on the necessary requirements for regeneration, which will make the entire tree to regenerate so that the next crop will be earlier as compared to the first harvest. Similarly, a third harvest is also possible. We also advice on multi-layer harvesting of trees, that is harvesting the tree from the top in the 3rd phase. This will allow a better cash flow and regularity in income.
Right from its inception, the company has been working on to bring necessary changes in government regulations to enable easy trade. In order to conserve naturally growing Agarwood trees in forestry regions, Agarwood has been included in CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora), which restricts the illegal trade and export of Agarwood. The preparation of necessary documents to get clearance from the government and CITES to enable exports is currently on.
We are working on bringing necessary changes to the current Tree Preservation Act in Karnataka so that Agar trees are harvested, processed, and sold as any other agricultural produce. In this regard, we have approached the Government of Karnataka through the Ministry of Forest, Government of Karnataka. The approval is about to happen, and it will be implemented soon. However, such restrictions are not applicable for newly introduced cultivated areas in the southern states as Agarwood is not a naturally growing tree in South India.
Currently, a study called as Non-Detriment Findings (NDF) is going on, in association with the company, under the guidelines of the Ministry of Environment, Forest and Climate Change, Govt of India. The study has gathered information on species distribution, population status, regeneration status, utilisation, trade etc. A draft policy was made during 2014 by the Ministry of Environment, Forest and Climate Change, Govt of India for sustainable utilisation of Agarwood. This is expected to be implemented by the end of 2020, by when the NDF study would also be completed, and a draft policy of Agarwood accepted.
The company is establishing a cluster of primary processing centres at dense-plantation zones where harvested trees are processed to different grades in the presence of growers. As a first step, infected trees are harvested and transported to the nearest primary processing station which has a large number of skilled labourers. Here, trees are slit and infected, and non-infected parts are separated using indigenous tools. The infected wood is then graded according to industry standards as soft yellowish white material, average quality brown ones, and good black chips.
The company follows a multilevel processing system comprising a cluster of independent primary processing units, an oil extraction factory, and a warehousing, packing and forwarding centre. At primary processing centres, steam distillation or hydrodistillation is followed with catalysts to increase recovery. Low grade Agar oil and Agar wax are extracted from the uninfected wood parts, too.
The state-of-the-art processing factory in Bangalore processes the purest quality of high grade oil extracted from superior grades of resinous wood. Various grades of chips, flakes, powder, essential oil etc., are manufactured as per customer specifications at the primary processing units, and later transported to forwarding centres for sale. The powder of uninfected wood and the leftovers of extraction are also utilised for the manufacture of by-products.
The company has already set up traditional processing centres in association with our partners in the states of Northeast, in Assam, Meghalaya, Tripura, Mizoram and Nagaland. Depending on crop development and tree availability, the company is also setting up processing units in the states of Kerala, Tamil Nadu, Kerala, Andhra Pradesh and Maharashtra as well.
As per the buy-back agreement of the company with the planters, the company buys harvested Agarwood from the planters. Decisions regarding this are taken only after the general body meeting with planters and promoters, and the projects thus decided upon are implemented thereafter in the years of harvest.
According to one such proposal, a primary processing unit and a local marketing division will be set up in every promoter’s zone, that is in each taluk, or for every 25 km, and on the company experts’ direction and market demands, harvested crops are brought by the planters to these centres. The crop is then graded in the processing unit, in the presence of planters, following which the company then either creates a direct marketing facility for raw Agarwood or makes arrangements for it to be sent to the chief processing units set up in select areas. The company sets the price for raw Agarwood and makes the payment on the spot.
PURCHASE OF INVENTORY
From the growers, the company purchases processed Agarwood products at a realistic price based on international market rates. For any product, good volume and stable supply are the key factors. With this in mind, the company has developed over 10,000 plantations in order to maintain a stable supply with standard quality in the long run. Similarly, to be competitive in the market and to offer a commutative price, our plantations are developed in the unique, low-cost, tree-growing model of inter-cropping system so that the products are reasonably priced. In order to produce the best quality of resinous wood by encouraging natural infection, most of our plantations are developed in regions that receive a heavy rainfall, and enjoy warm summers and freezing winters, conditions that yield superior quality oil.
Customer satisfaction is the company’s primary focus, which will help farmers to sell their trees. We have already established standard clients and are continually working on developing new clients as well. We are associated with leading institutions across the globe for the sale of our products. We will sell the products to domestic and international clients with proper legal documents and with standardised packaging and forwarding system.
As planters are also the shareholding partners of the company, care is taken to maintain transparency at each and every stage, so that the products are of best quality, leading to optimal customer satisfaction. We offer the right product, of the right quality, at the right time, at a reasonable price, with a truly professional approach, proactive customer service, and convincing hands-on logistics.
FARMERS’ INTERACTIVE MEETS
- The company carries out various activities to be in regular touch with the planters, which impacts plantation management
- Field day programmes are organised in well-managed farms to create an interactive platform to exchange knowledge on various aspects of cultivation and processing.
- With the able support and guidance of promoters, progressive farmers, and well-wishers of the company, planters’ meets and workshops are held, where information regarding the company, Agar cultivation, and the market are given to farmers.
- The company provides all the information related to inoculation in these programmes.
- Demonstration of inoculation techniques is given in this event.
- Training will be given to workers who wish to learn inoculation.
- Trees will be harvested for checking the performance of previous inoculations.
- Guidelines will be given for harvesting and regeneration.
The company has developed model plantations at various locations.
- Model farms are established in association with progressive farmers.
- Model farms include all cultivation models, both mono and inter-cropping systems.
- Innovative cultivation of Agarwood or any other crop is chosen for model plantation.
- In Karnataka, about 1 to 3 model farms are established in each taluk.
- The total number of model farms in Karnataka and other areas exceeds 100.
- Farmers in the model farms are service-oriented and happy to provide all the guidelines.
- Farmers can visit such model farms and gain the necessary information.
- The company organises field trips for new planters to well-developed plantations.
- Visitors can adopt the necessary agro-techniques in their farms, too.
- In general, farm tours are organised for model plantations along with visits to places of tourist interest.
- Farm tours are the best platforms to understand the agricultural aspects of Agarwood.
- During such visits, all the necessary information on inoculation and processing aspects is provided.
- Shares are allotted to farmers who have planted in the initial years of crop promotion, and they become the shareholders of the company.
- The company allots one share for every tree planted, after taking care of all the legal formalities.
- Membership is allotted to the farmers who have planted Agarwood in the recent years.
- Farmers who become members are in a long-term association with the company.
- For inoculation in the members’ plantation, the company invests half the cost of inoculation, while the other half is borne by the member farmers.
- Members get all the services of the company such as field inspection, free magazines etc.
- Members of the company are assured of a realistic purchase price and a transparent processing system.
A NOTE OF CAUTION
- Cultivate Agarwood only in an ideal climate.
- Keep the investment as low as possible.
- Plant only the right variety of seedlings.
- Adopt the right inoculation techniques.
- Have buy-back assurance with standard organisations.