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

Why in the News?

Assam has constituted a Multi-Departmental Task Force to promote its agarwood sector and is working towards a dedicated policy for the industry. 

• The first task-force meeting and stakeholder consultation were held recently. Assam has an estimated two lakh hectares of agarwood plantations, giving the State a significant resource base. 

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. 
• 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. 

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.

What is Assam planning?

• The State has constituted a Multi-Departmental Task Force for the Promotion of Assam’s Agarwood Sector, bringing together the Agriculture, Industries, Forest and other relevant departments.
• Agriculture Minister, Industry Minister and Forest Minister, along with senior officials, participated in the initial consultation with farmers, growers, traders, processors and industry representatives. 
• The proposed policy approach seeks to develop the entire value chain, covering cultivation, scientific harvesting, processing, product development, branding, domestic marketing and exports.
• The initiative can help convert agarwood from a largely traditional activity into a high-value rural industry, generating employment and improving incomes for farmers and plantation owners.

Existing policy framework

• 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.

Why is the sector important for 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.

Key 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.

Exam Hook –Prelims

Consider the following statements about agarwood:

1. Aquilaria malaccensis is listed in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
2. Agarwood is produced from the resinous heartwood of Aquilaria trees.
3. International trade in the species is completely prohibited under the Convention.

Which of the statements given above is/are correct?

Answer: 1 and 2 only.

One-line takeaway: Assam’s agarwood push can turn a traditional forest-linked resource into a high-value rural industry, but only through sustainable cultivation and regulated trade.