Agarwood’s potential should be fully explored and expanded. With a capitalization of only P2.2 million, it could produce P83 million in profits per hectare after five years. In addition, it makes use of our untapped natural resources, enhances our environment, produces jobs and reduces poverty.
The Philippines is known worldwide in areas such as boxing (i.e., Manny Pacquiao), beauty (i.e., Pia Wurtzbach, Catriona Gray) and singing (i.e., Arnel Pineda and Lea Salonga). If developed properly, the Philippines can be known globally for agarwood, just as Australia is known for kiwi and Spain for Iberian ham.
Consensus
This was the conclusion arrived at during the Jan. 30 weekly forum of the Agribusiness and Countrywide Development Foundation, led by president Kukius Barcelona and in partnership with the Management Association of the Philippines. These forums, covering various topics, have been conducted weekly for the last 21 years. You can view the latest one and other topics by visiting the foundation’s Facebook page. The most recent featured Dr. Ephraim Cercado, who spoke on agarwood as part of his presentation on building agroforestry business.
According to ChatGPT: “Agarwood, often referred to as oud or guharu, is a highly prized and fragrant resinous wood. It forms in the heartwood of certain species of Aquilarius trees when they become infected with a specific mold. The process of agarwood formation is natural and known to take years. The resin produced has a unique and captivating aroma, making agarwood highly sought after in the production of perfumes, incense and traditional medicines.”
Cercado spoke of agar with high credibility because of his background. He retired as a surgeon to pursue his passion for agroforestry. He is a value chain expert with Asian Development Bank, a clinical research specialist with Real World Evidence Novartis, and is currently the president of Dendrotonics Corp.
Dendrotonics Corp. is an agriwood and agroforestry company that has 51 partners in 74 sites nationwide. Its 95 hectares of land is planted with more than 66,000 native trees with a high survival rate of 88 percent. More than just a dark resinous wood used to produce incense, carvings and perfume, agarwood has a place in the history of humankind.
Cercado said it was the perfume used in Jesus’ body after crucifixion. It was also endorsed by Mohammed in the Quran to be used in the daily rituals of Islam. In other words, agarwood has a profound cultural and trade history in all of Asia. To be able to acquire agarwood, a Department of Environment and Natural Resources permit is needed. Per kilo, the price (not the black market price) depending on quality, ranges from P24,000 to P53 million.
So for a hectare with 833 trees, the expected average profit is P83 million after five years if a tree could produce P100,000 per kilo. Again, note that the capitalization is only P2.2 million for all five years.
Export business
Agarwood is an export business that requires sales contracts, consistent and large volumes and export permits and licenses. There are dangers from scams. But the main pitfall is a lack of understanding of the value chain.
This involves knowledge of survival methods, legalities, technology, marketing skills and bureaucracy. Since Cercado is also a value chain expert, he can be an excellent source to address these bottlenecks (you can email him at ephraimcercado@dentrotonics.com).
Instead of spending resources equally across products, the government should use a focused rifle, instead of a scattered shotgun approach. It should spend a significant percentage of its resources to support promising products like agarwood. By leapfrogging our agriculture to high-value products, we can compete globally and create the jobs we need for our people.
Last year, Thailand had agriculture exports of $42.3 billion, while we had only $7.1 billion. And yet our export development plan has set a goal of increasing our exports by $2 billion in the next two years. This kind of planning must change.
If agarwood’s potential is realized and properly promoted, it can be positioned as a Philippine flagship product proudly known throughout the world. INQ
The author is Agriwatch chair, former secretary of presidential flagship programs and projects, and former undersecretary of the Department of Agriculture and the Department of Trade and Industry. Contact is agriwatch_phil@yahoo.com