Opportunities for the smallholder sandalwood industry in ... - ACIAR

Socioeconomics of sandalwood production
The Vanuatu sandalwood industry has the potential
to develop a niche market based on the organic and
sustainable production of a highly valued natural
product, which benefits smallholder producers. Like
many forestry investments, the planting of sandalwood
is a medium- to long-term venture (e.g. commercial
Indian sandalwood plantings in Australia
are expected to mature approximately 15 years from
planting) (ITC 2009; TFS 2009). A 7-year sandalwood
rotation for the production of sapwood, which
can be used as an alternative filler in many agarbatti
products, has been raised as an option for commercial
smallholder production.
The objective of this study was to determine current
sandalwood planting activity by smallholders in
Vanuatu and assess the financial costs and benefits of
sandalwood cultivation under three different planting
models, relative to existing swidden agricultural
practice.
Sandalwood smallholder
interviews
Detailed interviews were held in July 2008 with
25 sandalwood producers from a range of socioeconomic
classes (Box 1). These growers represented six
different islands (Santo, Pentecost, Malekula, Efate,
Erromango and Tanna) across Vanuatu.
A total of 206 questions covered the following
seven broad topics: (i) land area and use, (ii) nursery
management, (iii) site selection, plantation establishment
and management, (iv) incidence of pests and
disease, (v) marketing, (vi) level of investment, and
(vii) input costs of garden and sandalwood farming
systems. The responses to the socioeconomic questions
were used to determine the average inputs and
the financial returns from eight planting scenarios:
• Scenario 1: smallholder garden (1 ha) with staple
vegetables worked over a 4-year rotation.
• Scenario 2: commercial smallholder garden (as
in scenario 1) interplanted with sandalwood at
a density of 3 m × 4 m (833 trees/ha) with 50%
harvested at 15 years and the remaining at 20 years
for heartwood.
• Scenario 3: sandalwood planting (1 ha) at a density
of 3 m × 4 m (833 trees/ha) with 50% harvested
at 15 years and the remaining at 20 years for
heartwood.
• Scenario 4: sandalwood planting (1 ha) at a density
of 2.5 m × 2.5 m (1,600 trees/ha) with all trees
harvested at 7 years for sapwood.
• Scenario 5: sandalwood planting (1 ha) at a density
of 3 m × 4 m (833 trees/ha) established each year
for 10 years. Harvesting of each annual sandalwood
planting for heartwood occurs at 15 years (50% of
trees) and 20 years (50%). The sandalwood plantings
at years 1, 4 and 8 are accompanied with a
garden, and each is worked over a 4-year rotation.
• Scenario 6: sandalwood planting (1 ha) at a density
of 3 m × 4 m (833 trees/ha) established each year
for 10 years. Harvesting of each annual sandalwood
planting for heartwood occurs at 15 years
(50% of trees) and 20 years (50%).
• Scenario 7: sandalwood planting (1 ha) at a density
of 3 m × 4 m (833 trees/ha) with all trees harvested
for heartwood at 15 years, followed immediately
with another sandalwood planting (1 ha) of equal
density and rotation.
• Scenario 8: sandalwood planting (1 ha) at a density
of 3 m × 4 m (833 trees/ha) with all trees harvested
for heartwood at 30 years.
Economic analysis
A cost–benefit analysis was undertaken to determine
the relative economic benefits for smallholders
of the seven sandalwood planting models and a smallholder
commercial garden on a single plot of land.
Labour demands in each of the scenarios are highest
in the first 4 years. In all scenarios, the smallholder
would have completed the most significant part of
the investment in 4 years and would engage in other
activities. The economic comparisons between the
planting models with shorter (scenarios 1 and 4)
and longer (scenarios 2 and 3) rotations reflect the
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