Business

Business behind red sandalwood: the endangered plant species

The killing of 20 people in the forests of Seshachalam, Andhra Pradesh, for allegedly cutting endangered plant species – the Red Sandalwood (Red Sanders), is a story which is filled with greed for money, struggle for survival and apathy from the rulers, all linked with the business of smuggling the red wood.

A report on April 7, the day 20 people hailed from Tamil Nadu were shot dead by Andhra Pradesh inside Seshachalam forest, stated that an auction of nearly half of the red sanders stocked,  which were seized from smugglers in the recent years, by the Andhra Pradesh government fetched around Rs 1,000 crore in December 2014.

This translates to Rs 27.41 lakh per tonne, a trader says a good variety of redsandal wood can even fetch Rs 70 lakh a tonne in the international market.

Tamil Nadu officials have said that around Rs 450 crore worth of seized products are lying in godowns in the state.

Why so much interest in red sandalwood?

Demand for red sandalwood is mainly in the overseas market, said a trader and it comes mainly from countries like China, Japan, Myanmar and other others in East Asia.

The red sandalwood has medical advantages. According to Institute of Wood Science & Technology the wood gives cooling effect when applied externally for inflammations  head-ache, bilious affections and skin diseases and improves treating headache, skin diseases, fever, boils, scorpion sting and to improve sight.

On the business side, it is a good raw material for music instruments and luxury furniture, according to Indian Journal of Applied Research. It also yields Santaline dye, which finds use in colouring foodstuff and pharmaceutical preparations and additionally, the extracts obtained from the tree bark and wood are known to have several medicinal properties, said the study by A Bhagyaraj, research scholar and D V Ramana, professor, Department of Management Studies, Sri Venkateswra University, Tirupati.

Traders also said it is even used in shipbuilding and it was reported that its been used to reduce the radiation of Nuclear reactors.

The hunt begins

Smuggling took off after the overexploited tree was put on the endangered list in 2000, and the Centre banned its felling, movement, sale and exports. It is smuggled out in ship containers or as air cargo, often masquerading as foodstuff, allegedly with the collusion of customs officials.

Many of the crackdowns on red sanders end up in arrest or shoot out on wood cutters from Tamil Nadu, working on wages to cut and transport wood from the deep forest of Andhra Pradesh to unknown destinations. Red Sanders bearing formations are estimated to extend over around 5,160 kms in its principal geographical range. About 23 per cent of red sanders formation is dense, 34 per cent has moderate cover and the remaining is open.

Because the wood brings so much of money for everyone involved — the agents make around Rs 75,000 per week as commission — the smugglers often take desperate action to evade arrest. Two Andhra Pradesh forest rangers were hacked to death in the Seshachalam forests last December. This prompted the Andhra police to form a special task force that, in the recent past killed at least twenty four Tamil villagers including the twenty in this month, and arrested thousands and seized over 20,000 tonnes of red sanders.

The frequent crackdown and the resultant shortage in the market may push the prices of red sanders in the international market, says a farmer, who once traded in the wood but gave up when he was unable to meet many of the legalities post the 2000 ban. Sale of old stocks is permitted but with stringent conditions. There were reports that in government storerooms across the country, there is over Rs 5,000 crore worth of the wood.

Poverty, greed

With Chandrababu Naidu taking charge as the new Chief Minister of Seemandhra (Andhra Pradesh), the Andhra Pradesh Police and Forest Departments are in a “massive” hunt for the smugglers of red sanders (Pterocarpus santalinus). Naidu has been one of the targets of these smugglers. In 2009, a bomb was planted targeting Naidu by Naxalites and it was alleged that it was funded by the red sanders smugglers as Naidu was in big time mood of cracking down these smugglers.

The main target for these smugglers are Andhra Pradesh, especially the hills of Seshachalam and Nalgonda forests. To cut these trees, agents source people from Tamil Nadu especially from districts like Tiruvannamalai and more from the tribal villages of Javadumalai (Javadu Hills).

An official from the Forest Department, on condition of anonymity, said they (the agents) target villages, which are hit by drought and where there are large number of illiterates. He noted that three men last year who were gunned down by the AP officials were dependent on sugarcane farming, but due to poor rain and closure of mill here they fell on the agents’ trap and the sad part is that they dont even know what they are doing is illegal. They were offered Rs 10,000-15,000 for three days of work.

Reports stated that about two agents in each of the 274 small villages, which are close to the Andhra borders, ensure a steady stream of labour for the smugglers. According to sources, around 3,000 people were involved in smuggling red sanders.

They fall for the fancy income of around Rs 10,000-15,000 for three days, without knowing the consequences. Sources said the villagers hired to cut the trees and lug them out were paid handsomely at Rs 3,000 for a six-foot log. The agents make around Rs 75,000 to Rs 1 lakh per week, as commission on smuggling the timber.

One of the major challenges for the officials in curbing the menace is the limited availability of staff. For instance, Gudiyatham, a forest where there is around Rs 20 crore worth of red sanders is growing, has a presence of around 50 forest officials.

The economics of red sanders

Most of the people hired for the ground job are unaware of the real price of of their luggage which they deliver putting their life at stake. “Nobody has told us what the real use of these red woods are,” said a villager in Aathimur.

“A tonne of red sanders fetches up to Rs 20 lakh in India but its international landing price is above Rs 50-80 lakh,” a forest officer from the Vellore range said last year.

“It is smuggled out in ship containers or as air cargo, masquerading as foodstuff, mostly with the collusion of customs officials. Sometimes air passengers carry them as luggage, from Chennai to Kuala Lumpur or from Delhi to Beijing.”

The racket became a law-and-order problem when a gang of north Tamil Nadu villagers hacked two Andhra forest rangers to death in the Seshasalam forests last December.

Good for legal business?

The exports business for the legal players became tough with the trade rules being made stringent internationally for the endangered species. “While there are a few farmers still handling the legal sales of red sanders, many of them stopped because of this. Those who are operating are collecting smaller quantity from the farmers who have one or two trees in one survey number, which are grown up naturally in their land,” said a source.

There used to be bulk buyers who were capable enough to dole out Rs 40-50 crore for bulk purchase and exports and to collect the necessary nods from the legal authorities and export the red sanders through legal channels. These bulk buyers use to buy around 300-400 tonne in a single go from various farmers.

However, there is still scope for legal exports and with the last date for sales of the confiscated red sanders falls in the second half of the year, more players are expected to get into the business, said the source.