Syllabus: GS – III & V: Agro-based Industries 

Why in the News?

Assam exported its first legally approved consignment of agarwood chips to Saudi Arabia and the United Arab Emirates, marking a major milestone for the State’s agro-forest economy.

Key Highlights

• The consignment included 100 kg of agarwood chips to Saudi Arabia and 12 kg to the United Arab Emirates.
• The shipment, valued at ₹2.35 crore, was dispatched from Lokpriya Gopinath Bordoloi International Airport.
• The export received mandatory approvals including CITES permit and restricted export licence from the Directorate General of Foreign Trade.

About Agarwood

• Agarwood or Sanchi (Aquilaria malaccensis) is a highly valuable and aromatic resinous wood,  native to Assam and South East Asia. 
• It has a mythic reputation with a revered mention in Mahabharat, Buddhist birth stories and Hadiths in Islam. 
• It requires warm humid and sub-tropical climate as well as soft and sandy soil.
• It is suitable and preferable for plantation at a temperature between 22 C to 43C with 70% sunlight and 1800-3500 mm rainfall per annum.
• Agar is classified as critically endangered on the IUCN Red List and is listed under Appendix II of the CITES. 
• This listing ensures that the trade of agarwood adheres to sustainable limits, allowing export only if it does not harm the species’ survival. 

Production of Agarwood

• The cultivation of agarwood has a catch as healthy Aquilaria trees do not produce these fragrant compounds.
• Agarwood is produced when Aquilaria trees are bruised by external factors such as physical injury, insect attack, bacterial/fungal infection that they form agarwood in defense. 
• The resin is produced as an immune response to attack from fungi or injury by insects called borer (Neurozerra confertal). 
  • Borer is naturally found in Assam’s districts of Sivasagar, Golaghat and Jorhat.
• In natural forests, only up to 10% of trees become infected and produce agarwood. 
• Farmers use artificial inoculation methods to produce aromatic resins in agarwood by drilling holes in trees and injecting fungal inoculants. 
  • This triggers an immune response in the tree, leading to resin formation.

 Agarwood Production in Assam

• Assam is known as the “Agarwood Capital” of India. 
• The climate and landscape of Assam are best suited for agar tree plantations. 
• Assam is home to over 82% of India’s agarwood trees, amounting to 11.437 crore trees outside forest areas, showcasing Assam’s dominance in this sector.
• Assam’s Golaghat district holds the highest concentration of Agarwood Trees (4.5 crore trees). 
  • Other key districts include Jorhat, Sivasagar, Karimganj and Cachar. 
• In contrast, Tripura holds the second-largest agarwood population in India with just 1.515 crore trees. 

Significance of Agarwood

• Agar is a high value tree commodity and has a great potential for creating a new ‘Green Revolution’ in Assam after tea.
• Preferred Cash Crop: The low input for management and growth and intercropping adaptation makes agar a preferred cash crop. 
• Employment Creation: It can create a large number of employment opportunities in sectors such as:
  • Agarwood Oil Sector
  • Perfume Industry
  • Cosmetic Industry
  • Medicinal Use
  • Agarwood chips
• Export Potential: Agarwood has high international demand, particularly in Gulf countries.

• Example: Top-grade agarwood fetches up to $33,000/kg.
• Cultural Significance: Sanchipat, known as ‘Sanchi Puthis’, manuscripts, historically made from agarwood, are an integral part of Assamese heritage.
• Agarwood plantations promote reforestation and environmental conservation.

Challenges 

• Long Gestation period: Agarwood trees take 15-25 years to mature and produce commercially viable quantities of resin. This discourages potential investors seeking quicker returns. 
• Illicit Felling and Smuggling: The high value of agarwood tempts illegal logging and smuggling posing a threat to sustainable cultivation and fairtrade practices. 
• Lack of Scientific Knowledge: Limited research and knowledge about optimal cultivation practices and disease management hinder production efficiency.

Initiatives taken by the Government

• Policy Reforms:
  • Assam Wood-Based Industries (Promotion & Development) Rules, 2022: Regulates sustainable growth of wood-based industries.
  • Assam Trees Outside Forest (Sustainable Management) Rules, 2022: Supports the sustainable management of tree resources.
  • Assam Agarwood Promotion Policy, 2020: Focuses on developing agarwood as a key economic sector.
• Trade Promotion:
  • Establishment of the International Agarwood Trade Centre in Golaghat to facilitate global trade and promote the agarwood industry in Assam.
  • Participation in national and international exhibitions and trade fairs is encouraged to boost marketing and attract potential buyers.

Exam Hook: Prelims Question

Agarwood, recently seen in news, is mainly valued for:
(a) Medicinal minerals
(b) Aromatic resin and perfume production
(c) Textile fibre production
(d) Biofuel extraction

Answer: (b)

One-Line Wrap

Assam’s first legal export of agarwood chips highlights the growing importance of sustainable forest-based industries, regulated trade, and export-oriented rural entrepreneurship in Northeast India.