TAG: GS 3: ECONOMY
THE CONTEXT: Recently India increased the quota for exports through the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES).
EXPLANATION:
Agarwood
- Agarwood is a highly valuable commodity known for its aromatic and medicinal properties.
- It is derived from the tree species Aquilaria malaccensis.
- It is widely used in the production of incense sticks, essential oils, and perfumes.
- This species has been under significant pressure due to overharvesting in the wild.
- It is classified as “Threatened” on the International Union for Conservation of Nature (IUCN) Red List.
- Recognizing its vulnerability, Aquilaria malaccensis has been listed in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) since 1995.
- This listing indicates that while the species is not currently facing extinction, it is at risk if trade is not regulated.
Historical Context and Challenges
- In India, Agarwood primarily grows in the protected areas of the Northeast.
- However, due to concerns over its sustainability, the Indian government imposed a ban on its export, which lasted until November 2021.
- This ban, combined with other trade restrictions, led to unintended consequences.
- The absence of a legal export quota prompted an increase in informal and illegal trade, driving up the prices of Agarwood products such as chips, oil, and powder in the global market.
- This situation placed significant pressure on the local populations and ecosystems where Agarwood is cultivated and harvested.
India’s Strategic Response: Non-Detriment Findings Report
- In 2024, the Government of India took a crucial step by submitting a Non-Detriment Findings (NDF) report to CITES.
- This report, coordinated by Director of the Botanical Survey of India (BSI), was commissioned by the Union Ministry of Environment, Forest and Climate Change (MoEF&CC).
- The NDF report is a scientific assessment required by CITES to ensure that the trade of a species does not threaten its survival in the wild.
- The report highlighted several key findings:
- Between 2017 and 2021, approximately 1.25 tonnes of Agarwood chips and six liters of oil/derivatives were recovered from six Indian states, pointing to ongoing smuggling activities.
- These states—Assam, Delhi, Kerala, Maharashtra, Telangana, and West Bengal—were identified as hotspots for Agarwood smuggling to countries such as Bahrain, Saudi Arabia, Kuwait, Thailand, and the United Arab Emirates.
Expansion of Agarwood Cultivation and Export Quota
- The NDF report provided a detailed assessment of the current state of Agarwood cultivation in India.
- It estimated that there are at least 139.89 million (13.989 crore) Agarwood plants under cultivation in non-forest areas, particularly in the northeastern states of Assam, Manipur, Nagaland, and Tripura.
- This widespread cultivation presents significant potential for the Agarwood industry in India.
- Based on these findings, the Indian government established a ‘zero’ export quota for wild-sourced Agarwood, ensuring that exports would only come from cultivated populations.
- This decision was pivotal in removing India from the Review of Significant Trade (RST) list by CITES, a list that had included India alongside four other Agarwood-producing countries in 2023.
- The export quota was significantly increased from the existing limit of 25,000 kg of chips and powder and 1,500 kg of oil to 151,080 kg of chips and powder and 7,050 kg of oil.
- This increase reflects India’s confidence in the sustainable management of its Agarwood resources and its ability to meet global demand without compromising the species’ survival in the wild.
Economic and Social Impact
- The removal of India from the RST and the subsequent increase in the export quota is expected to benefit lakhs of people involved in the Agarwood industry.
- These individuals are engaged in various stages of the value chain, including cultivation, maintenance, harvesting, processing, production, transportation, marketing, and export.
- The formalization and expansion of this industry provide significant economic opportunities for farmers and traders, particularly in the northeastern states where Agarwood is widely cultivated.
Recommendations for Sustainable Management
- To ensure the sustainable management of Agarwood, the NDF report recommended several measures:
- Mandatory registration of Agarwood trees before harvest and of processing units to monitor and manage the resource effectively.
- Active involvement of state forest departments in supplying healthy seeds and establishing nurseries to support cultivation efforts.
- Strict monitoring, verification, and control of both the import and export of Agarwood products to minimize informal trade and ensure that the increased export quota is utilized effectively.
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
- The Convention on International Trade in Endangered Species of Wild Fauna and Flora is a global agreement among governments to regulate or ban international trade in species under threat.
- In the mid-20th century, governments were beginning to recognize that trade in some wild animals and plants had a devastating impact on those species.
- These species were being driven toward extinction through unsustainable use for food, fuel, medicine, and other purposes.
- And while individual governments could control what happened within their borders, they did not have a way to address the impacts of international trade in these species.
- In 1973, 21 countries addressed this issue by signing the CITES agreement.
- CITES remains one of the cornerstones of international conservation.
- There are 184-member Parties and trade is regulated in more than 38,000 species.
- Representatives of CITES nations meet every two to three years at a Conference of the Parties (or COP) to review progress and adjust the lists of protected species.
- The protected species are grouped into three categories with different levels of protection:
- Appendix I –
- Includes the world’s most endangered plants and animals, such as tigers and gorillas.
- International commercial trade in these species, or even parts of them, is completely banned, except in rare cases such as scientific research.
- Appendix II –
- Contains species like corals that are not yet threatened with extinction, but which could become threatened if unlimited trade were allowed.
- Also included are “look-alike” species that closely resemble those already on the list for conservation reasons.
- Plants and animals in this category can be traded internationally, but there are strict rules.
- Appendix III –
- Species whose trade is only regulated within a specific country can be placed on Appendix III if that country requires cooperation from other nations to help prevent exploitation.
- CITES also brings together law enforcement officers from wildlife authorities, national parks, customs, and police agencies to collaborate on efforts to combat wildlife crime targeted at animals such as elephants and rhinos.
- Appendix I –