The state-run soap factory Karnataka Soaps and Detergents (KS&DL) is betting on buy-back arrangements with sandalwood farmers to ensure future supplies of the depleting fragrant wood for its famous Mysore sandal soap.
Over the past couple of years, KS&DL has entered into MoUs with 210 farmers who have planted sandalwood on about 2,000 acre in the state.
A tonne of sandalwood in the government auctions can fetch above Rs 40 lakh a tonne depending on the quality and more farmers have evinced interest to invest in sandalwood, a long-term crop that needs a minimum of 15 years for harvesting.
The company had started a campaign to encourage sandalwood cultivation after the state liberalised rules in 2001, which allowed private ownership of the tree, though the owner can only sell to the forest department or designated agencies such as KS&DL or the handicrafts corporation. But awareness on cultivation has increased since 2008 when a government notification on ownership was issued, according to V S Venkatesha Gowda, deputy general manager (R&D), KS&DL.
?It is picking up momentum,? said Gowda, adding that many farmers are availing subsidies or loans under schemes for inter-cropping of medicinal and horticulture plants that include sandalwood.
The company, which had revenue worth Rs 200 crore in 2009-10, also has agreements with a few public sector companies and institutions such as Bharat Earth Movers and the Central Power Research Institute to buy sandalwood that grows on their campuses, said KS&DL managing director DS Vishwanath.
?Which other crop will give a return of Rs 1 crore per hectare?? asked T N Vishu Kumar, who started a 4.5 acre plantation in Tarikere town of Karnataka??s Chikmagalur district in 2005.
Kumar, who does not have any tie-up with buyers such as KS&DL, plans to add another 10 acre this year and said 20 more farmers have planted sandalwood in about 100 acre near Tarikere after him. Along with farmers in districts like Mysore, Bangalore, Shimoga and Mangalore, Kumar plans to launch a forum for sandalwood growers to exchange information on cropping techniques.
As sandal is a root parasite which needs a host plant, it can be inter-cropped with ginger, maize, potato or other timber crops, said HS Anantha Padmanabha, a Bangalore-based forestry consultant, and a retired scientist. According to him, a few corporate houses based in north India have raised plantations in about 6,000-7,000 acres across the country mostly for their captive needs that include fragrances for pan masala, agarbathis and perfumes.
Most of India?s sandalwood production comes from the forests of Karnataka and Tamil Nadu, where the species grows naturally. But the natural stock has been depleting rapidly over the years while strong demand for sandalwood oil is pushing prices up.
Declining sandalwood supplies has forced the 94-year-old KS&DL to diversify into herbal soaps. The company, whose sales come mostly from Karnataka and Tamil Nadu, plans to expand its reach into the northern and eastern parts of the country. ?Now, we are going in for modernisation of plant and machinery for new soap lines,? said Vishwanath.
However, demand for sandalwood seedlings for raising plantations is also coming from farmers in states including Gujarat, Maharashtra, Andhra Pradesh and Madhya Pradesh.
?We have a reason to believe that the traditional base will shift,? said Syam Viswanath, a scientist at the Institute of Wood Science and Technology in Bangalore which has sold some two lakh seedlings in the last four years. He added the interest was mainly from farmers who had the resources and wherewithal to sustain themselves till the crop can be harvested.