Previous Page Table of Contents Next Page


Commercialization of aromatic and medicinal plants in Nepal


Introduction
Status of aromatic and medicinal plants in Nepal
Scope of the medicinal and aromatic plant industry in Nepal
Aromatic and medicinal plants for poverty alleviation
Value of production
Market structure
Constraints and strategies
Recommendations
References


Rana Bahadur Rawal
General Manager
Herbs Production & Processing Co., Ltd., (HPPCL)

Introduction

Despite its relatively small size, Nepal is well-known for its biodiversity. The different physiographic zones resulting from attitudinal variation have given rise to vegetation ranging from the subtropical to alpine. About 7,000 species of plants have been reported in the country so far, out of which approximately 700 species have medicinal properties (HMG/IUCN, 1986). Some of these medicinal plants are also aromatic.

The use of medicinal plants in ancient cultures is well documented in the "Rigveda," part of the Hindu scriptures. The traditional method of healing, or "Ayurveda," is still practised today in Nepal, India and Sri Lanka. It has been reported that almost 30 percent of modern allopathic drugs are either directly or indirectly derived from plants (Marino-Bettolo, l 980). Thus, the significance of medicinal plants in contributing to health needs is self-evident.

In Nepal, the rural populace has been involved in the collection, or harvesting, of wild aromatic and medicinal plants since ancient times. This activity has supplemented their meagre incomes from subsistence agriculture, although they have not been able to receive their due share because of the manipulation and exploitation by traders and middlemen.

Both the men and women of rural Nepal are engaged in the collection of wild aromatic and medicinal plants. The harvested products are dried and graded and then transported to the nearest trading center to be sold to middlemen, who in turn resell the crude drugs to Nepali or Indian businessmen. Sometimes the middlemen purchase the raw material right at the village. The rural household uses the income it generates from this activity to purchase essentials (clothes, salt, food).

However, environmental degradation now threatens the sustainability of this practice of harvesting from the natural ecosystem.

Status of aromatic and medicinal plants in Nepal

The collection of wild herbs from the forests, or the natural environment, has been practiced in Nepal for centuries. The aromatic and medicinal plants present in the natural environment are the property of the government. However, every Nepali citizen is free to collect these raw materials if he/she applies to. the Department of Forests and pays the appropriate government royalty.

With a view to improving forest management, His Majesty's Government of Nepal introduced the Community Forestry Development Program. Under this program, certain forest areas have been handed over to local rural communities where user groups manage and utilise the natural resources present in the forest. In such areas, only members of the local user groups are entitled to harvest the non-timber forest products (including aromatic and medicinal plants) and outsiders are not eligible for such activities.

The Department of Forests, under the Ministry of Forests and Soil Conservation, is the legal authority that oversees the harvesting of wild aromatic and medicinal plants. Its activities and responsibilities include the collection of royalties on harvested items and regular monitoring of the natural reserve of indigenous flora. Illegal collection/harvesting or export of timber or non-wood forest products is punishable under existing laws.

Some valuable species of medicinal plants are facing the threat of extinction due to the indiscriminate collection for swift monetary gains. Endangered species whose collection has been officially prohibited include "panchaunle" (Dactylorhiza hatagirea) and "yarshagumba" (Cordyceps sinensis) Five additional species which can only be exported after processing within the country are: (a) Nardostachys jatamansi, (b) lichens (Parmelia nepalensis, Usnea spp., Ramalina spp.), (c) Valeriana wallichii, (d) Sugandha kokila (Cinnamomum glaucescens), and (e) Rauwolfia serpentina.

Another method of protecting the natural ecosystem is the establishment of national parks and wildlife reserves, which now occupy 14 percent of total land area. This measure is not supported by everyone on the grounds that valuable natural wealth in the form of medicinal and aromatic plants and other important species which are sources of vital drugs, useful dyes, and flavour-fragrance materials are off limits to needy people. Also, the rural population is deprived of potential economic benefits from the collection of NWFPs. The positive impacts of such a measure, however, far outweigh the negative ones. The most significant impact is the protection of the gene pool of the vast flora endemic to the particular region.

Scope of the medicinal and aromatic plant industry in Nepal

Only a minor proportion of the collected herbs is processed within the country. The bulk is exported to India, where it is processed for use in the pharmaceutical and flavour-fragrance industries. Some of the processed items are eventually exported to Europe. The organized processing of medicinal and aromatic plants in Nepal began in 1981 with the establishment of Herbs Production and Processing Co. Ltd. (HPPCL), a government undertaking.

In the past few years, a number of private sector enterprises have sprung up, manufacturing essential oils, resinoids and Ayurvedic medicines.

HPPCL covers an area of about 300 hectares for the commercial cultivation of aromatic plants on its different herbal farms and under several extension programs. It produces in excess of 20 tons per annum of essential oils, excluding turpentine.

HPPCL has pioneered the commercial cultivation of several exotic species of aromatic plants such as palmarosa (Cymbopogon martini), citronella (Cymbopogon winterianus), lemon grass (Cymbopogon flexuosus), japanese mint (Mentha arvensis), german chamomile (Matricaria chamomilla), French basil (Ocimum basilicum), and a few indigenous species such as tagetes (Tagetes minuta). Domestication of Nardostachys jatamansi, Valeriana wallichii, and Swertia chirata is being considered. Jatamansi oil and Xanthoxylum oil (from Xanthoxylum armatum) are also commercially produced. Commercial distillation of Sugandha kokila oil (from Cinnamomum glaucescens) has been patented by HPPCL.

Aromatic and medicinal plants for poverty alleviation

In accordance with the guidelines prescribed in the Master Plan for the Forestry Sector (HMG/FINNIDA, 1990), several herbal centres have been established in different regions of the country where cultivation and processing activities are carried out with the involvement of user groups.

Processing of wild species by steam distillation (e.g., Gaultheria fragrantissima, Rhododendron anthopogon, Artemisia spp., and Curcuma zedoaria) has been facilitated by the establishment of distillation units for operation by the local people. This activity has given the rural low-income populace a new means to generate income on a somewhat permanent basis.

At present, about 5,000 to 6,000 tons of pine resin are tapped from Chir pine (Pinus roxburghii) distributed in the warm-temperate belt across Nepal. This activity engages around 2,000 villagers. There is ample scope for expansion of the rosin and turpentine industry. Consequently, employment could be generated both in the rural and urban areas through resin tapping, processing, and fractionation of turpentine oil for aroma chemicals.

Value of production

Table 1 gives the quantities of wild aromatic plants available for processing and the quantities actually processed within the country. Table 2 shows the quantities of herbal extracts, resinoids and essential oils produced by HPPCL for the six years from mid-July, 1987 to mid-July, 1993. Table 3 shows the annual turnover of HPPCL for the last seven fiscal years. Table 4 shows the quantities and values of the exports of medicinal and aromatic plants to India in F.Y. 1990/91. Table 5 illustrates the export of herbs to overseas markets in F.Y. 1 989/90.

Market structure

The marketing channel for crude herbs (aromatic and medicinal) is quite complex. At present, HPPCL has bilateral contracts, renewable annually, with the village and rural processors. Thus, the company, to some extent, shields the local processors from the uncertainties and fluctuations in the international markets with regard to the prices of the essential oils and extracts. In the case of raw materials (botanicals), however, local and regional price fluctuations seriously affect the income of the true village collector who is at the mercy of the middleman or village trader.

Nepalese essential oils have been well-received in the regional and European markets. The conventional oils such as palmarosa, citronella, lemongrass and tagetes have a growing demand from foreign customers. The case is similar with certain newly introduced unconventional items like oil of Rhododendron anthopogon. Oils like Jatamansi oil and Xanthoxylum oil require greater effort for successful export. The future of the essential oil industry looks promising, with foreign firms entering Nepal for the manufacture of soaps and detergents.

Table 1. Major aromatic plants available for commercial processing and approximate quantities processed in Nepal

Species

Quantity available (metric tons)

Quantity processed (metric tons)

Gaultheria fragrantissima (leaves)

400

200

Nardostachys jatamansi (rhizomes)

200

80

Lichens (Parmelia nepalensis, Usnea spp., Ramalina spp.)

300

60

Xanthoxylum armatum (fruit)

400

50

Rhododendron anthopogon (leaves and twigs)

80

20

Juniperus indica (berries)

30

X

Cinnamomum glaucescens (berries)

100

80

Table 2. Production of rosin, menthol crystals, herbal extracts, resinoids and essential oils by HPPCL, 1987-1993 (tons)

Product

1987/88

88/89

89/90

90/91

91/92

92/93

Rosin

92.50

155.00

151.00

112.86

110.50

49.89

Menthol crystals

0.16

0.02

0.20

0.36

0.31

0.20

Extracts







Vasaka liquid*

0.54

0.52

1.58

2.96

-

-

Aconite*

-

0.70

-

-

-

1.01

Belladonna*

0.22

-

0.20

-

0.24

0.21

Resinoids







Lichen

1.09

1.36

0.79

1.09

0.74

0.41

Valerian

-

0.05

0.19

-

0.51

-

Essential oils







Citronella

0.51

0.85

1.03

2.20

1.62

5.18

Palmarosa

3.20

3.28

4.41

2.91

2.06

1.08

Lemongrass

0.18

0.21

0.30

0.71

0.61

1.33

Mentha

0.59

0.63

0.72

0.81

0.47

1.14

Sugandha kokila

1.35

0.73

-

-

-

-

Jatamansi

0.04

0.17

0.39

0.01

-

0.23

Juniper berry

0.01

-

-

-

-

-

Calamus

0.18

-

-

-

-

-

Tagetes

-

0.04

0.06

0.01

-

0.04

Wintergreen

-

0.10

-

0.47

0.13

0.69

Matricaria

-

-

0.01

-

-

0.02

Xanthoxylum

-

-

-

-

0.19

0.45

Turpentine*

16.80

29.05

29.50

-

23.78

11.10

Source: Marketing Dept, HPPCL.
Note: * in kilolitres.

Table 3. Annual turnover of HPPCL for the last seven fiscal years (thousands of rupees)

Year

Domestic

India

Overseas

Total

1987/88

2,144.87

7,873.13

289.71

10,307.71

1988/89

2,266.78

2,947.68

344.71

5,559.17

1989/90

8,493.42

1,292.77

1,711.78

11,497.97

1990/91

4,311.91

1,809.15

902.21

7,023.27

1991/92

3,746-16

3,041.44

2,461.26

9,248.86

1992/93

6,592.23

5,044.06

4,919.44

16,555.73

1993/94

4,947.39

3,089.66

3,841.08

11,878.13

Source: Marketing Dept., HPPCL.

Table 4. Exports of medicinal and aromatic plants to India, FY 1990-91

Plant

Quantity (kgs)

Value (Rs.)

Acorus calamus

5,777

109,000

Asparagus racemosus

78,450

909,000

Bergenia ligulata

49,773

669,000

Cinnamomum tamala

129,371

1,132,000

Lycopodium clavatum

17,057

149,000

Orchis spp. (Gamdol)

921

17,000

Picrorhiza scrophularaeflora

43,050

548,000

Rubia cordifolia

22,147

225,000

Rheum emodi

5,906

36,000

Swertia chirata

125,205

1,854,000

Terminalia spp.

1,150

8,000

Nigella sativa

33,307

165,000

Grand Total:

512,114

5,821,000

Source: Foreign Trade Statistics, F.Y. 1990/91, His Majesty's Government, Ministry of Finance, Department of Customs, Kathmandu.

Table 5. Export of crude herbs from Nepal (excluding India), FY 1989-90

Herb

Quantity (kgs)

Value (Rs.)

Lycopodium (Lycopodium clavatum)

6,960

1,046,727

Rhubard (Rheum emodi)

6,000

129,960

Spikenard (Nardostachys jatamansi)

2,000

89,176

Chiretta (Swertia chirata)

200

3,976

Grand Total:

32,284

1,712,203

Source: Trade Promotion Centre, Kathmandu.

Constraints and strategies

The successful marketing of products derived from aromatic plants (e.g., essential oils) must overcome certain constraints. The constraints and recommended strategies are listed below:

1. Aromatic plants yield essential oils, oleoresins, resinoids, concretes or absolutes which mainly depend on the external market for consumption. The internal demand for these items is met through imports from India, France, Germany, the Netherlands, and Switzerland. The imported products are chiefly blends of synthetics or mixtures of synthetic aroma chemicals and natural essential oils. Domestic processors, therefore, should develop blending techniques to cater to Nepal's consuming industries (foodstuffs, beverages, confectionery, soaps, pharmaceuticals).

2. Reaching the customer is not an easy task. Firms in developed countries usually have their own reliable suppliers and are hesitant to switch to new suppliers for fear of poor-quality products, faulty delivery schedules and lack of guaranteed long-term supply. Essential oil producers, therefore, have to approach the fragrance/flavour compounding firms (the large-scale consumers of aromatic products) through trading houses (importers) in the respective countries. The development of trust over a long period of time will sometimes enable producers to sell directly to consumers. Thus, the entrepreneurs in this field should have a long-term commitment and be willing to develop long-term strategies for success.

3. Acceptance of novel, or unique, essential oils by the world market takes a longer period (at least 2-3 years) than conventional items. This is so because of the numerous tests carried out by the consumer's laboratories on the usefulness of the particular oil, its safety (freedom from toxicity), its stability and competitiveness over similar established products. HPPCL has had to face this situation in the case of essential oils like Jatamansi oil and Xanthoxylum oil.

Recommendations

1. National priority should be given to medicinal and aromatic plants. Policies should be formulated to facilitate the judicial and sustainable utilization of aromatic and medicinal plants. If harnessed effectively, this sector can make a significant contribution to the national GDP.

2. There is an urgent need to develop agrotechnology for the domestication- of wild aromatic and medicinal plants, especially those species which are exploited heavily.

3. Access to commercially viable processing technology is important. Product diversification and manufacture of finished products (pharmaceuticals, cosmetics) are important commercial avenues. Local and regional markets should not be overlooked.

4. Multi-national companies and joint-ventures with foreign firms should be promoted for the rational utilization of these valuable resources.

5. Villagers need to be trained in postharvest techniques (drying, storage) to minimize wastage and unnecessary losses.

6. The currently practiced trade pattern, where the true collector is exploited, needs to be rectified.

7. All research activities carried out within the country should be coordinated by a national agency which should also function as a liaison between national and international institutes and organizations for sources of information and technology. New findings on NWFPs and medicinal plants should be shared among the concerned agencies organizations

8. The determination of royalties on collected herbs should be based on a more realistic approach in order to promote local processing. The ideal method would be to have the lowest royalty on plant parts that could be collected with the least impact on the plant's natural growth (e.g., fruits), with increasing royalties on plant parts that endanger the survival of plants (e.g., roots and rhizomes would command the highest royalties).

References

HMG/IUCN. 1986. Building on sources. the National Conservation Strategy for Nepal. HMG & IUCN. Kathmandu.

HMG/FINNIDA. 1990. Master Plan for Foresty Sector. Kathamandu.

Marino-Bettolo, G.B. 1980. Present aspect of the use of plants in traditional medicine. Journal of Ethnopharmacology (2):5-7.


Previous Page Top of Page Next Page