VANADURGIAGARWOOD NEWSLETTER(Translated from Kannada version to English by Dr. V. Bhaskar)

Editorial

Under the aegis and guidance of the VANADURGI AGARWOOD CO., more than 2000farmers have undertaken cultivation of Agarwood tree in Western Ghat region. We aim tocontinue this effort with similar mutual trust, cooperation and utmost transparency. Hencein order to promote agarwood cultivation and for the benefit of Agarwood growers, we arebringing out ‘Vanadurgi Agarwood Newsletter’. We intend to provide complete informationon Agarwood from time to time through this Newsletter.

We are providing information related to the experience of agarwood farmers,activities of the Company, problems faced by farmers, farmers workshop and other matters.Our board members and scientists to provide suitable advice and answers to the farmers’questions and problems. We have open mind to receive the suggestions of farmers. Wevalue their contribution in the form of articles and notes. It is hoped that this Newsletterwill serve as a bridge between the agarwood farmers and the Company. We wish you willextend whole hearted support in our venture.

In this issue:

Agarwood as a commercial crop in Western Ghats

After care of Agarwood plants during summer

Clarification regarding subsidy for Agarwood cultivation

Experiences of Agarwood farmers

Model Agarwood plantations

Request to Forest Department

Agarwood as a mixed crop

Coffee estates are most ideal for Agarwood cultivation

Progress made during last few months

Future plans & projects in ensuing months

Questions and Answers, Suggestions from FarmersAgarwood as a commercial crop inWestern GhatsIn Malnad region, most of the farmers depend upon a few traditional commercial

crops like Arecanut, Coffee, Pepper, Cocoa and Cardomom. Uncertainty in market rates forthese crops, increasing cost of cultivation and non-availability of agricultural labourers haveput these farmers in hardship. As a result, many farmers have shown interest in resorting tosuch crops which do not require much expenditure and labour. Under these circumstances,it has become a necessity to have diversity in agriculture and try alternative new crops. Butwho has to do it ? In this context, Vanadurgi Agarwood Ltd. Co., is introducing andpromoting an Indian tree, Agarwood, for cultivation in Western Ghats which are best suitedfor it. Agarwood is a very valuable commercial crops. Possibly, in future this tree is goingto fetch good returns to the farmers.

As the Agarwood is a forest tree, it does not demand much care and expenditure andit is less labour dependent commercial crop. It does not demand special care starting fromplanting until harvest. Agarwood trees can be grown as a mixed crop in coffee estates, indisease affected areca gardens, in the borders of estates and gardens and it could even begrown as a monocrop.

The Company managers have toured in agarwood growing countries and gatheredsubstantial information. As a model, the agarwood trees were introduced for cultivation inMalnad region 5 years ago and after getting good results we were convinced that WesternGhats are ideally suited for its growth.

With a view to encourage Agarwood cultivation, the Company has taken theresponsibility of distribution of seedlings and signing Agreement with farmers for buyback ofthe product for further marketing. The Company has made agreement with Internationalimport and export Agencies and research institutes. The Compancy has acquired knowledgeon all aspects of cultivation and processing technologies. The Company has madeagreement with agencies which have patented technology of inducing agarwood formationby artificial incoculation methods, if necessary. Our mail goal is to make agarwoodcultivation more profitable to the farmers, processing and marketing of value products andalso to create employment opportunities for thousands of people.

Already Agarwood is being cultivated in countries, including India, like Indonesia,Laos, Malaysia, Thailand, Myanmar, Vietnam and Australia. The major countries whichimport agarwood and its high value products include, Canada, China, Aegypt, Hong Kong,

Taiwan, India, Japan, Korea, Kuwait, Moracco, Kathar, Soudi Arabia, Singapore, Spain, USA,Pakistan, Israel, U.A.E. and European countries. Thousands of crores Dollar worth agarwoodand its high value products are transacted in these countries.

The farmers may grow as many agarwood trees as possible by them and take care ofthem as one among several cash crops, so that it will improve natural green cover in malnadarea and also fetch them good income. There is no doubt it is going to change the entireagricultural, social and economic scenario in the region. At this time when farmers arereluctant to practice agriculture in malnad region, agarwood is surely going to be a bliss tothem.

* * *After care of Agarwood plants duringsummer Agarwood plants do not require much care one year after planting.

If the seedlings are planted in open sun, shade should be given in the first year.

Soil working may be around plants to remove weeds if any and mulching donewith litter to reduce evaporation of soil moisture.

Agarwood does not demand much water. But in the first year of planting,watering may be done 4 to 6 times during January to May.

If the plants are prone to cattle damage, some thorny guards may be pitchedaround the plant.

Plants which have attained 2 – meters height, do not need any special attention.

HELPLINE (for various services of the Company)

SMS service: Some people may not get SMS. You may inform any mobile No. or Phone No.

Phone call service: Please inform if you have not given any phone No., if there is any changein phone No., if the Company’s promoters have not visited your plantation or if they havenot given proper guidance or if there is any misstate in the Farm Diary.

Agarwood Newsletter: We intend bringing out 3 issues in a year. Please inform if you havenot received them.

Services on Farmers’ request: You may call if you have any problem related to Agarwoodcultivation or related aspects.

Technical advice from Scientists: If you want to ask any information on agarwood cultivationaspects, including diseases and pests etc. contact: 99000 66400.Clarification regarding subsidy forAgarwood cultivationThe Govt. of India is providing subsidy for such medicinal crops which have good

market under ‘National Medicinal plants Mission’ through State Horticultural Department.Accordingly, the Department of Horticulture, Government of Karnataka have recommendedsubsidy for Agarwood cultivation as detailed in Annexure – 3. As per this, they have fixedRs. 12, 436/- for 170 trees per acre.

The Dept. Has recommended to give 50% of subsidy during first year, 20% during 2nd yearand 30% during 3rd year. That means grower gets Rs. 73.15 as subsidy per tree. In 2009,National Medicinal Mission of Central Govt. have released subsidy amount to the StateHorticulture Dept. to be given to Agarwood farmers. But they have requested differentstates to give different costs of cultivation for cultivation of sandal wood and agarwood. It isdesired that a common subsidy rate is fixed in all the states in the country. Therefore, theCentral Committee has is likely to direct all the states to give same cost of cultivation. Dueto this reason, the Horticulture Dept. in the state has not distributed subsidy received during2009 to either sandal wood or agarwood growers. Honourable Minister of Agriculture andthe Director of Horticulture have requested the Central Subsidy Committee to expeditefixing of subsidy rate.

The Vanadurgi Agarwood Company is in constant touch with the Dept. ofHorticulture and we shall contact all the agarwood farmers once the confirmation isreceived. The Agarwood growers may kindly note that for getting subsidy from the Govt.they need to furnish purchase bill, buy back agreement, RTC and other related documentsand the Company will assist the farmers in this regard.

* * * *Experiences of Agarwood farmersThe tree which is botanically called ‘Agar’ has great importance. It is found to be a

most ideal tree crop for Malnad region. Therefore, the farmers can think of growing thistree scientifically. At present, areca growers in malnad region are facing acute problemslike, 1) labour problem and 2) yellow disease. In addition, the prices for areca are also goingdown. Therefore, agarwood trees can be grown as a subsidiary crop in areca gardens. Thistree needs little care during first two years. There are no pests or diseases to this tree.Therefore, agarwood trees do not demand much labour and it is easy to grow them.

It is known to be highly profitable and stands number one in the internationalmarket. The prevailing rate for 1 kg of agar powder is about 1.00 lakh and it is progressivelyincreasing every year due to its rarity and increasing demand.

Although, agarwood tree is native to India, it is in the verge of extinction due to over-exploitation. This tree is like ‘kalpa vriksha’ to the farmer. Every part of the tree is useful.After 8 years of growth, the tree starts developing deep dark coloured wood inside due tonatural or artificial inoculation of fungi through wounds. This dark wood is the commercial‘agarwood’. Oil is extracted from this wood which contains oleioresins and used inPerfumes and medicines. The residual wood material could be used as a raw material inpaper and agarbatti industries.

Farmers in malnad region may start cultivating agarwood trees in the yellow disease-affected areca gardens as a mixed crop and also as a border crop. Most of the farmers inmalnad region would have sprinklers and drip irrigation facility which can be extended toagardwood trees also. Therefore, agarwood is a nature’s gift to farmers in malnad regions.

Balakrishna Baipadithaya

(Agar farmer)Model Agarwood plantations

There are totally 3500 agarwood trees in Vanadurgi Estate, near Sringeri. Trees are2-year, 3-year and 4-year old trees are maintained here without much after care. Sometrees have already attained more than 20 ft. height and about 40 cm girth. Interestedfarmers who wish to visit may contact: 9448434561. There are model agarwoodplantations in most of the malnad districts. Interested farmers may contact the respectivepromoters to visit and get more information.

* * * *Request to Forest DepartmentThe Vanadurgi Agarwood Co. Ltd., has introduced Agarwood tree which does not

occur naturally in the forests of Karnataka but native to India.

Thousands of farmers in malnad are already growing agarwood in their private lands.In future, when the trees come to harvesting, it involves permission of the the Forest Dept.as per the Karnataka Tree Preservation Act. However, as it is, the Govt. has exemptedcertain trees cultivated by farmers which include silver oak, Acacia, Eucalyptus or nilgiri,Haluvana, surve and others and there is no need to seek permit from the Forest Dept. forharvesting and transport.

In the same way, in order to obtain exemption for Agarwood trees also, theCompany has submitted a request letter to the Karnataka Forest Department and the Dept.has shown positive response in this regard.

Agarwood as a mixed cropSri Neernalli Seetaram Hegde has grownAgarwood as a mixed crop in Arecagarden and is optimistic about gettinggood returns from it. In just 1 ½ years,agarwood trees have grown to a heightof 10 to 12 ft. This progressive farmer isplanning to grow Agarwood trees as amonocrop and grow cocoa under itsshade.

People are seeing with curiosity the tall grown trees in the midst of areca gardengrown by Sri Neernalli Seetaram Hegde. Mr. Hegde explains to them that they areagarwood trees which is used in agarbatti industry and could be grown as a mixed crop inareca garden.

Sri Seetaram Hegde is progressive farmer and has a big name in dairy industry forwhich he is given a national award. He always wants to try various newer technologies inagriculture. From the beginning he was aware of use of agarwood in agarbatti industry andhe used to enquire about the rates of agarwood. After he read an article in a paper aboutthe cultivation of agarwood in Vanadurgi Estate near Sringeri, that its seedlings are alsobeing distributed and that the information on its cultivation and marketing are available, hemade a visit to Vanadurgi estate and obtained all the required information. Then hedecided to grow agarwood tree in his areca garden. Now, there are 500 agarwood trees inhis areca garden.

Sri Seetharam Hegde has reasons for chosing to grow agarwood trees. Firstly,agarwood trees do not demand much care, but just little care is required during first 2 years.Except the labour required at the time of planting, no much labour is required later. In hisown words, “excepting the cost of seedling, there are no other special expenditures orattention required. If it is planted amidst areca plants, the agarwood tree also automaticallyreceives the care. More than all, I have planted agarwood tres with a hope of getting goodincome in future”. In areca gardens, agarwood seedlings may be planted at 18 ftinterspace. Sri Hegde has planted agarwood saplings in 15 acres during 2009.

Sri. Hegde has dug pits of the dimension of 1 ½ x 1 ½ x 1 ½ ft and added 1 kilocowdung for each pit and 2 kilos of green manure, before planting. He has added organicmanure 20 days once and later after every 3 months. Drip points given to areca trees havebeen extended to each agarwood plant and irrigation is given only during January to May.Till now, he has not noticed any pest or disease on agarwood plants. The agarwood plantshave now attained 8 – 10 ft height.

Sri Hegde has grown Banana, cocoa, pepper and other crops in the areca garden andhe has not noticed any adverse effect of agarwood plant on areca trees or other crops undermixed cropping method. The crown canopy of agarwood plants have not spread more than7-8 ft and the he feels that there will be no bad effect on any other crop including the maincrop areca.

According to Sri. Hegde, it is better to grow agarwood as a mixed crop instead of asa monocrop and economically one would be getting income from the main areca crop andwhatever income one gets from agarwood will be additional only.

Sri Hegde is having plans in future to grow agarwood trees first at 500 plants peracre with an interspacing of 9 ft x 9ft and then introduce under its shade cocoa. He wants togrow agarwood in this way in about 6 acres.

*****Coffee estates are most ideal forAgarwood cultivationAgarwood plants are ideal to be grown in coffee estates along with orange, Silver

oak and other shade-giving trees. It has thin leaf structure which turn into organic manurevery soon. It has a non-competitive root system and promises ten-fold returns in less time.Today, agarwood plants are being grown as a mixed crop in Arabica and Robusta coffeeestates.

Articles are invited fromfarmers and other writerswho are interested inagarwood cultivation and whohave experience in agarwoodcultivation. – Ed.Progress made during last few months

During 2010-11, more than 1300 farmers from all Taluks in 5 districts of Malnadregion have undertaken agarwood cultivation. The company delivered seedlings to thefarmers’ doorstep. The Company has not promoted its cultivation in the rest of the Districtsin Karnataka. However, some of the farmers from Dakshina Kannada, Mysore, Haveri,Chitradurga, Chamarajanagara and others have planted on their own interest and Companygave seedlings to them.

The Company conducted meetings in more than 50 places for the benefit ofagarwood farmers who have planted agarwood during 2009. Farmers who plantedagarwood seedling during current year also also attended these meetings on their owninterest. Slide shows on agarwood were arranged in these workshops.

Field inspection work is also in progress in the agarwood plantations raised farmersduring 2010. The field staff of the Company are providing required guidance and advice tothe farmers. They are recording their visits and activities in the separate farm diariesbelonged to both farmers and the Company. Issue of records related to buyback agreementand to make farmers shareholders in the Company is also in progress.

In additioin, field inspection of lands where agarwood seedlings were planted byfarmers during 2009 is continued and observations are being recorded in the diaries.

The Company has launched “Phone Call Service” for the benefit of agarwood farmersand with an aim of calling them and enquire regularly about the performance and growth ofagarwood plants and problems if any and maintain them in ‘Database Book’.

Annual General Body Meeting: All agarwood growers are going to become shareholders of the Company. The Company will call for All Shareholders meetingduring May in a suitable place.

Seminar on Agarwood: Company will organise workshops/seminars onagarwood in selected places.

Farmers meeting: The Company is planning to organise meeting of agarwoodfarmers during May in six places coming under respective circles.

North Kanara Circle: venue - Sirsi (Sirsi, Siddapura, Yellapura, Khanapura parts)

Shimoga Circle: Venue - Thirthahalli (Sagar, Thirthahalli, Hosanagar, Shimoga)

Chickmaglore Circle: Venue – Chickmaglore (Chickmaglore, Mudigere parts)

Kodagu Circle: Venue – Madikeri (Madikeri, Somavarpet, Kushalnagar parts)

Hassan Circle: Venue – Sakleshpura (Alur, Belur, Sakleshpur parts)

Sringeri Circle: Venue – Sringeri (Sringeri, N.R. Pura, Koppa and other Districtsother than those covered above).

Note: The Company will inform all well in advance. All are requested toparticipate and give suggestions and directions.

Future plans & projects in ensuingmonthsThe Company wishes to improvise its services and performance and strengthen its

activities towards promoting agarwood cultivation in the future days to come. Keeping thisin view, the Company has approached various Government Institutions and resourcefulscientists and individuals to obtain advanced knowledge on agarwood. Already, we are incontact with esteemed institutions like CIMAP (Central Institute of Medicinal & AromaticPlants), Bangalore, Department of Forestry in GKVK, Bangalore and Forestry College,Ponnampet, of the University of Agricultural Sciences, Coffee Board and others. Thescientists in CIMAP, located at Bangalore have shown interest in taking up research onagarwood jointly with the Company.

We have conducted a few programmes in collaboration with Ponnampet ForestCollege. On our request, the Chairman/President of the Coffee Board has agreed to pay visitto agarwood growing places and examine and he has agreed to extend all possible help fromthe Board.

Though the field inspection and share agreement works are going on in full swing,some might have been left out. We will try to correct it.

It is intended to organise agarwood workshops and farmers meetings in 6 placesduring May wherein farmers can discuss openly with the staff of the Company, promotersand scientists and also can suggest solutions to the problems, if any, so that, it will makepossible to the Company to perform and serve the farmers better.

Most of the seedlings distributed by the Company during 2009 are coming up well,but a few farmers have complained that a few plants have died. We are examining toprovide free seedlings to the extent of 10% of the died plants.

We wish to improvise phone call service and SMS services in the future days. Verysoon, the Company will arrange to send the Share certificates to the farmers by RegisteredPost.

In addition to the above, the company is paying more importance towards marketingof agarwood. This will be discussed openly in the forthcoming growers’ workshops.

Wanted

1. Promotion Managers – 2 posts

2. Field Inspectors – 3 posts

Preference is given to candidates having

agriculture background.

Better salary and Allowances given

Contact immediately:

Ph.: 92418 00232

Those who are interested in getting comprehensive information on agarwood cultivation maycontact : Mobile No. 92418 00232Questions and Answers (FAQs)

Ravikumar, Sagar

We had planted 100 plants in our garden. Few seedlings died within few days after planting.What are the reasons ?

No diseases have been noticed on Agarwood plants. There are chances of damage toseedlings during transportation. There are possibilities of damage to seedlings if neem cakeis added to pits more than required quantity at the time of planting.

Ranjan Chinnappa, Kodagu

Company staff have not visited our plots or contacted us in any way after giving seedlings.

We regret for the lapses. The Company felt that the plot visit during summer months ismost preferable because the plants may die for want of proper care and hence there is delayin the visit. Field inspection has been started now and soon our field staff will visit your plotand also provide the share agreement etc.

Satish Hegde, Sirsi

Whether the residual parts of the tree after extracting agar are useful in any way ?

The residual parts of the tree after extracting agar like branches, bark and other parts areusable in paper industry as raw material. Hence, farmers will get some income from suchresidual parts also like bamboo and Acacias.

Note: Agarwood growers may send questions to this part on management of agarwoodtrees, share agreement etc.

Suggestions from FarmersDr. Pradeep, Shreenandi Estate

You are giving seedlings raised in small polythene bags. Therefore, I suggest to transferthem to bigger bags and distribute to farmers after one year.

We regret for distributing seedlings raised in small bags. Our only intention was to reducethe cost of transportation. The roots develop quickly in agarwood plants and seedlings alsoput up fast growth. If they have to be maintained for 1-2 years, they need to betransplanted to very big bags which is going to add more cost to the seedlings which will bea burdon to farmers. Hence, from this year, we will try to rebag the seedling and maintainfor 3-4 months before distributing to farmers.

Murali, Nambala, Thirthahalli Taluk

If you over promote agarwood planting and if farmers grow too many plants, will it notlead to marketing problems ?

Our Company has a definite target which is also dependent upon how much to be harvested.Hence, we want to promote only certain fixed numbers of agarwood plants to be plantedand will not supply seedlings in an unlimited manner. In order to introduce our agarwoodproducts in the international market it is essential to produce a definite quantity of wood.Keeping this in our forethought, without producing excess wood or less wood, we arepromoting agarwood planting in Malnad region.

Note: Farmers can send written suggestions to this Section.