SAKON NAKHON, Thailand: At this time of year, the land across Thailand’s upper northeast is awash with green. The annual monsoon feeds and sustains these agriculture-driven provinces.
But despite first appearances, things are not right. Across dozens of sustainable agarwood plantations, trees are dying en masse. These are not regular trees, but some of the most valuable in the world.
For thousands of years, the fragrant resin known as oud that sometimes forms naturally inside wild aquilaria trees is highly prized. Referred to as “liquid gold”, the trees’ resin is distilled and used as one of the world’s most luxurious ingredients for perfume.
The essential oil, with a musky aroma, is one of the most expensive of its kind in the world - it varies in price based on purity, but can attract about US$200 per ml - due to the difficulty of harvesting it and its rarity. Other byproducts of agarwood are bakhoor and incense, long used in China, India and the Middle East.
In Sakon Nakhon, a province that flanks the border with neighbouring Laos, agarwood - also known as the wood of the gods - now appears to be a failing industry.
Drought has bitten hard on one small aquilaria plantation, visited by CNA. Row after row of trees have been left brittle and parched, able to be simply pulled out of the ground and piled onto a heap by workers.
At another plantation nearby, damaging floodwaters have left similar results. A small cluster of trees, close to maturity, appear close to being ready for harvest; the rest are dead.
“The trees have been growing well over the last three or four years. But they have faced drought and flood. Previously the weather was okay. No drought. But in recent years, it’s worse. They have gradually died,” said Thaowan Pha-inn, a 60-year old plantation worker.
“Rain does not come in its season. The amount of water is not adequate. The groundwater is not sufficient,” he said.
The trees grow fast, but are sensitive to changes in their environment. Too much heat, dryness or water can stunt their growth or cause them to die. That is exactly what is now occurring right across northeastern Thailand, where climate change is starting to wreak havoc.
It is a strange phenomena to witness for workers like Thaowan, who have always depended on the rhythmic weather patterns of dry and wet.
“When I was child, the land was fertile. It rained in the rainy season. We could start rice farming in April. Rain was consistent. That’s the past. But these days I have no idea what is happening.”
THE MOST VULNERABLE AREA
The owner and operator of these agarwood operations is Asia Plantation Capital (APC), which began expanding in northeastern Thailand from 2010. It purchased large swathes of land and converted them to growing aquilaria trees - it also grows the species in Sri Lanka, and more recently, in Malaysia.
The decision was based on a series of expert scientific surveys of the Isan region, taking into account the weather and local environment. But things have since changed.
“We did all the normal routine things like soil tests, rainfall checks and so on and so forth. It ticked all of the boxes but obviously as you can now see, several years hence, it has gone through the worst droughts in 40 years and followed then by horrendous flash floods as well,” APC CEO Steven Watts told CNA.
“We wouldn’t be going into an area where we didn’t think we could make money. Subsequently, we’re now learning other things,” he said.
This part of Thailand is especially prone to the adverse impacts of climate change, where significant changes in rainfall and increasing temperatures are forecast for the years ahead.
It is already the region that experiences the most extreme temperatures in the country, and future rise will further jeopardise agricultural production, including rubber, cassava, rice and sugarcane.
“The northeast of Thailand, of course, is the most vulnerable area,” said Dr Seree Supratid, director of the Climate Change and Disaster Center at Rangsit University.
“The first reason is because they have not many reservoirs. The second one is that for most of the land, the quality of the soil is not as good as the middle parts (of Thailand).”
“In the northeast...they have the sabai sabai life. The comfortable life in the past cannot continue on in the future, with these climate extremes. It is a pity for them,” he added.
For APC, the expected outcome, Watts admits, is that further investment in agarwood in northeastern Thailand is now over. The company directly recorded financial losses of US$36 million in 2019/20 and faces major delays in future profitability, putting under direct threat 90 of the company’s 130 Thai plantations that are in Sakon Nakhon.
The situation has put the livelihoods of some 500 seasonal plantation workers in peril. Already half of them are not currently being hired, Watts says.
Suphee Buphasiri has been working for APC since 2012, and has watched her efforts cultivating the agarwood amount to very little.
“I have income to sustain my family and send my children to school. When my income is decreased, the direct impact is that it doesn’t cover my household expenses,” she said.
“If we can’t plant trees, we don’t have a job. If the drought lasts for a long time, agricultural jobs will be less or will totally disappear.
“We have to suffer more. I teach my children that we must spend less. They understand.”
If agarwood fails in plantations, it puts the entire species at greater risk of extinction.
In the wild, the trees are endangered due to illegal poaching. Given that only a small percentage of trees produce resin, and the whole tree needs to be cut down to check for it, populations across Southeast Asia have plummeted.
APC’s strategy is to protect the species, while also making a profit, through its plantations. Its inoculation process ensures that each individual tree produces resin, and harvesting takes place once the tree reaches maturity after seven or eight years.
Sustainability, adaptation and science are central company philosophies, but even using technology to mitigate climate change is proving problematic.
“In the long-term, selective breeding of flood-resistant and drought-tolerant crop varieties is an option. However, since tropical tree life cycles are extremely long, such programs would require many generations to develop,” said Dr Kodi Isparan Kandasamy, a plant biotechnologist and special advisor to APC’s Scientific Advisory Board.
“It is almost impossible to anticipate the imminent and future impact of climate change, which makes adequate preparation problematic,” he added.
In the meantime, further investment is going into coconut, pineapple and papaya plantations, environmentally friendly species with multiple uses and a growing global demand. Species diversification is increasingly seen as a way of reducing risk and building local resilience.
Watts says the company is looking at alternative crops for Sakon Nakhon and is doing small-scale experiments with various cash crops to chart a path forward in the area, and ensure local workers are not abandoned.
“We’ve created those mini-economies and the employment that goes with it and the financial rewards that go with it, so we’re very keen to make sure we look after those people up there. Depending on what crops we end up going with, we’ll be hoping to re-employ those people,” he said.
“We’ve looked at contingency plans in terms of finance, extra funds, whatever we might need. We’re slightly crystal ball gazing because nobody knows what the next crisis may be in terms of the weather.”
Additional reporting by D Kanyakumarii and Thanit Nilayodhin.