East Indian sandalwood was the first sandalwood to be traded extensively in its native area. The demand for sandalwood, especially in China, led to a search for alternatives and the exploitation of many of the natural stands of sandalwood in the Pacific and Eastern Indian Ocean regions. For example, on the island of Timor, exploitation started with the Portugese in the 1600s, passed to the Indonesians in 1975, and by 1990 most of the trees had been harvested and none replanted. In the early 1800s in Hawaii, King Kamehameha I traded enormous amounts of sandalwood for luxury goods, forcing his people to collect the sandalwood he needed to pay the bills. Succeeding leaders continued the trade, taking on huge debts to buy expensive, over-priced goods and paying in future harvests of sandalwood, which was becoming harder to obtain. Pressure by creditors to pay the debts kept the sandalwood flowing for some time, but by the 1940s most of the island's harvestable trees were gone. By 1820 Fiji and the Marquesas were all but stripped of their sandalwood and in the late 1800s uncontrolled harvesting in Vanuatu had taken its toll and trade in sandalwood was reduced to a trickle.
Perhaps because it has been so intertwined with Indian culture and heritage, the people of India were quicker than others to recognize the need to make sure this important resource was not lost. Although the government took control of the nation's sandalwood trees with the Sultan of Mysore's declaration of sandalwood as a "royal tree" at the end of the 18th century, forest conservation efforts have depended on many different governments over the years, so progress has been quite uneven. Experimentation with cultivating sandalwood and replanting in forests met with limited success. Problems with fire, browsing and spike disease have interfered with natural regeneration. Smuggling has undermined government efforts to control the harvesting and trade of sandalwood. With the death in 2004 of the most notorious and successful smuggler in recent history, sandalwood prices rose sharply, adding to the temptation for unscrupulous poachers. India continues to struggle to create a sustainable sandalwood industry by limiting the age and number of trees that can be harvested, continuing replanting efforts and controlling the export of wood and lumber.
Australia's history of sandalwood exploitation of native species began in the 1840s and continued until the 1950s when decreasing supplies and low prices made it no longer a profitable trade item. Regulation of the sandalwood industry began in 1923 on royal land and included annual quotas, export licenses, an increase in royalties, and appointment of forest rangers to curb illegal harvesting and begin reforestation.
In 1984 Australia's Forest Department completed a comprehensive resource evaluation, mapping existing Western Australian sandalwood trees and determining natural and artificial regeneration requirements. As a result, changes in management and sustainability practices were undertaken. Today the Forest Product Commission (FPC) is the body responsible for ensuring the sustainability of Australia's sandalwood. The FPC has initiated and funded land management practices that facilitate natural regeneration. In addition, quotas are set on the amount of sandalwood that can be harvested. Current quantities are 2000 tons a year with about half of that dead wood (trees that have already died). Pullers (people who harvest sandalwood, so called because the whole tree is pulled from the ground in order to get the high-oil content of the roots) are required to plant 12 sandalwood seeds near suitable host plants for every tree harvested. An external audit system certifies that all sandalwood planning, harvesting and forest management is in accordance with ISO 14001, the environmental management regulations of the International Organization for Standardization.
The Australian government is working with natural regeneration and plantation planting of sandalwood trees. Much has been learned from research into soil types, rainfall, elevation and other growing conditions. Also researched are the best types of host species, seeding rates, germination factors and survival. Other important factors are protection from grazing, fire and drought. The FPC initiative for farming Western Australian sandalwood is a collaboration with the farmer to provide land for the planting of trees in exchange for cash payments and a share of the timber profits. The Australian program utilizes years of sandalwood management research to successfully establish sandalwood tree farms that will replace harvesting from the wild.