Agarwood farming profit by $100,000 Per Kilo – Plantations in India

Agarwood is one of the most expensive raw products in the world and was listed at over 100,000 USD per Kilo in 2010. While good quality Agar can cost you $100,000, Sub par agar are available in plenty and are available for as less as $100 per kilo. Today, Agarwood is one of the most exploited trees in the world. Over 95% of all trees naturally were cut down, exploited and thus extinct. The remaining 5% of the natural trees are preserved by the government and various organisations. With limited agar trees, Plantations started thriving in various parts of india and other parts of the world

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Agarwood Plantation in India

The largest plantations of agarwood is in the southern part of India and is growing to be one of the largest in the world. Karnataka, Kerala and Tamil Nadu are key contributors to agar plantations, with Karnataka taking the major share. Contract farming of agarwood is very common with companies promising to purchase the produce once the trees are ready. Today, more and more farmers are taking up agarwood as a secondary crop in coffee plantations and other plantations which requires shade.

Requirements For agarwood.

Agarwood requires certain characteristics to produce the resin which is of value. While we can control the growth and health of the tree, there are certain parts of the process which cannot be controlled or can be overlooked. Agar is produced by inducing an infection in the tree to produce the resin. The tree has to be over 6 years for the resin to be produced. It requires a certain weather condition suitable for the infection to take place. It also requires that the plant be infected first. 

With a lot of research going into Agar wood, we have certain ways to assure that agar trees  can be infected artificially, without the help of insects, birds or other pests. That is just the easier part. The weather required is key to the growth of the resin too. Agarwood requires good rainfall, hot summers and really cold winters. This is not usual in most parts of the world. Tropical weather does not assure cold winters, while good monsoon and hot summers are common. The right area to grow agarwood is also very important in these cases and a few places in karnataka and tamil nadu actually meet the weather conditions.

Problems with intercropping Agarwood

Most of the agarwood farms in india , which are a part of a plantation do not have agarwood in its natural farm. Its a plantation, with intercropped plants like coffee or cardamom. Agarwood requires hot summers with no water at all. The problem with plantations is that they require that the coffee or other plants are watered during the summer. Irrigation for other plants directly affects the agar plants. The result is low quality Agar produce. This is a very common pitfall in Agar plantation. Agar is one of the few plants which are best when left in its natural habitat and having agar in a plantation requires that you compromise on your other produce or the quality of the agar. 

Buying Agar Plants

Agar plants vary in price. If you check your local area, the agarwood plant could cost from anywhere near Rs.25 to Rs.300. The quality of the plant is to be determined and while some plants which fall in the range of Rs150 and rs.200 have been found to be good, there are a few which were sold for Rs.300 which were very low quality. Know the plants before you purchase them. Hybrid plants are usually not the best option when it comes to Agar. Knowing the company/nursery where you purchase Agar is very important. The Nursery down the road, will usually have no idea where the agar plant is coming from. Purchase plants from reputed and well known companies with a past record.

What not to do when planting agar

It may seem like a good idea to plant 20 acres of agar but thats the worst thing that could be done. Considering the evolution of the agar trees, its impossible to determine if the agarwood tree would be suitable for your climatic conditions, soil and other natural factors. Agar takes up to 8 years to produce any form of revenue. So you will be completely blocked from resources for 8 years. Agar requires that they be induced to produce the resin. This requires a range of pests and birds if its to happen naturally. Your other option is to induce it artificially. This requires expertise. Overall, you are looking at a very complicated set of skills if you really need to profit from agarwood. 

Growing agarwood is not as simple as planting seeds and letting it grow. It takes a lot more skills and efforts to profit from it. 

Go small, use space where there is no cultivation. Wastelands which cannot be used, which does not require irrigation is the best way to go. You may have a few patches in the farm which requires no water, is often overlooked and where you don’t grow anything at all. This may be the right place for agarwood. Chances are you may have only 5-10 spots  and each spot may just be able to accommodate only 1 or 2 plants alone. That should be good enough to start with. Planting agar in such spots assure that you don’t invest a lot. It also ensures that the agar is in a place which is as near to its natural habitat. Inducing the agar for its resin would still require some form of human intervention. Ask an expert to help you with it when it’s time. You can be assured , if the climatic conditions are correct, that you produce the best quality agar possible in your area leaving agar to its natural ways as much as you can.

Agarwood Plantation Risks Vs Profit

Its all about the risks you take when it comes to agarwood plantation and no amount of statistics and science could help you with that. Intercropping of agarwood will almost certainly affect the quality of the resin produced by the agar, so using the area for other crops is almost always a bad idea if you are looking at agar as a profit source. Poor quality agar is not going to get you anything more than a few thousand rupees per kilo and most often , not even that. Growing agarwood as a plantation with nothing else on the plot is the risk worth taking, if you are sure that the climatic conditions are perfect for the plant. This of course results in no other crop being grown in that patch for at least 8 years of no revenue. You may end up with a good quality agar resin after 8 years or maybe you would get nothing. That’s a risk you should be willing to take. 

Should farmers take to agarwood plantations?

Most companies offer agarwood plants as an intercrop with a buy back offer. The buy back clause is usually not for all the trees, but only for those which are worth or has the required quality. This may be 10% of the trees planted or 90% of them. What if only 10% of the trees are actually purchased by the companies. What happens if the value of agar is low after 10 years when your trees are just mature? How about climatic conditions which may affect your plant in the course of the next few years? 

Large scale plantation of Agarwood is not a practical option for farmers. Agar is also a produce which may be of value today but has a very niche market and a normal farmer will never be able to sell their produce in the local market.