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6.1 Opportunities
6.2 Constraints
6.3 Potential

The demand and supply potential of the medicinal plant trade in South Africa has in the past been largely unknown and consequently poorly developed. The past racially-based policies of the South African Government created a narrow perspective of agriculture, nature conservation and health care. The plant trade and utilization has consequently been ignored by formal health and agricultural services, while conservation agencies have focused on trying to limit the impact of the medicinal trade on biodiversity.

Furthermore, the users and traders themselves have done little to develop the potential of the medicinal plant trade, probably a result of underdevelopment of the associated population, aggressive competition between various market players, and an abundant supply of wild plants. These factors have prevented any unified approach to the development of the industry.

As a consequence of the various perspectives of the indigenous medicinal plant industry and especially the lack of any organized marketing, few of the potential opportunities have been developed. The opportunities, constraints and potential of the medicinal plant market are therefore critical issues to consider in developing the industry.

6.1 Opportunities

6.1.1 Demand opportunities
6.1.2 Supply opportunities

6.1.1 Demand opportunities

As shown in Section 4.1, the demand for indigenous medicine in KwaZulu-Natal is considerable, with an estimated 84% of the black population, or 70% of the total population making use of traditional medicine. There are over 6 million indigenous medicine consumers in KwaZulu-Natal.

Indigenous medicine is a basic consumer good for which there are limited alternatives. This statement is supported by the frequency of visits to healers, the relatively high costs of a consultation and their use by people in a broad range of economic strata. Black clinic patients indicated that 40% of the health care services they used per annum were from indigenous practitioners and cost on average US$ 8.22 (R 37) a consultation, seven times greater than the cost of a clinic visit. Given the willingness to pay relatively high fees for indigenous medicine, the current level of demand (for example, 1 500 tonnes per annum in Durban or 4 300 tonnes for KwaZulu-Natal) is unlikely to decline.

In addition to the limited variability in overall volumes demanded, there is also likely to be limited variability in the demand for specific species. Interviews with healers indicated that the use of alternative species was largely unacceptable (see Figure 6.1). Producers are therefore assured that consumption of selected species is unlikely to change through the use of alternatives. These guaranteed consumption patterns serve to lower the risks for cultivation initiatives, especially for longer term crops such as Warburgia salutaris.

In addition, the demand for medicines is relatively price inelastic. Some 78% of the healers indicated that their customers generally accepted the prices charged for medicine and 78% of the healers' patients indicated that they would continue to use indigenous medicines in a similar way even if the price was to increase (see Figure 4.18). The price inelasticity provides an indicator to producers that there is flexibility in the prices that can be charged for medicinal plants or associated products.

There are considerable differences in prices for various popular plants, further evidence of a willingness to pay for more expensive products in the market. The higher prices also provide an opportunity for cultivation and processing to develop within the medicinal plant market.

The demand for medicinal products is also likely to grow. Between 40% to 60% of the healers interviewed indicated that demand for the popular nine species assessed in the study had increased (see Figure 5.4). Furthermore, in eight of the nine species, 60% or more of the healers indicated that they were using these plants for the treatment of new diseases, such as AIDS (see Figure 5.2). Increasing urbanization is likely to fuel the demand for indigenous medicine, as urban conditions promote the spread of disease and incidence of stress-related ailments. The relatively large numbers of young people visiting indigenous healers indicates that the culture of indigenous medicine use has not being significantly reduced through development and acculturation. This trend combined with a steadily growing population in South Africa, suggests that demand for indigenous medicine is likely to be increasing.

Healers also indicated that they required higher levels of stock for the nine popular species (see Figure 6.2).

Figure 6.1: Percentage of healers reporting acceptability of substitute medicinal plants [n = 31]

Figure 6.2: Percentage of healers reporting on the desired level of stock of medicinal plants [n = 39]

The consumers of indigenous medicine come from a wide range of social strata, with significant differences in belief systems and buying power. However, the market only supplies a uniform range of raw or semi-processed products, with practically no choice in quality of product, processing and packaging. This implies that there are considerable opportunities to supply different types of medicinal products to suit the demands of a diverse consumer group. The market survey identified that:

100% of healers' patients wanted to be treated in more modem facilities,
99% of healers' patients wanted medicines to be certified for quality, and
98% of the patients indicated a need for hygienic and modem packaging.

There are clearly significant opportunities in the diversification of products for the market.

The use of traditional medicine is dynamic, with both consumers and healers adapting the use to new circumstances. Not only are new diseases treated but also new products may be used in the evolving practice. For example, plants alien to South Africa, such Calamus and Camphor, are incorporated into the healers' dispensary. Furthermore, there is widespread acceptance of the use the cultivated medicinal plants due to the shortages that are occurring in the market. For example, 98% of the healers' interviewed indicated that they would be interested in buying cultivated medicinal plants, and 83% said that there was no difference between cultivated and wild plants, or that they were not able to tell the difference between the two. Healers" patients indicated similar sentiments, with 94% saying that they would not change their use patterns if medicinal plants were cultivated.

Apart from local demand there is also a growing international demand, from African countries and developed countries in the north [Lange 1997]. In Africa there are similar demand patterns as in South Africa with, in many cases, greater reliance placed on indigenous medicine due to declining abilities of many governments to maintain western-based health care systems. Experiences in Mozambique, Namibia and Mali have confirmed that rural and urban populations rely on indigenous medicines [Mander 1997b; Pollett et al. 1996; Mander unpublished). A medicinal plant investigation in Namibia by the author 1996 revealed that healers' in Windhoek12 relied on South African medicinal plants for their practices. Some healers' estimated that up to 80% of the plants they used were from South Africa. The USA, Japan, and several European countries also import South African products for research and consumption.

12 Windhoek, the capital city of Namibia.

The above discussions on consumer demand highlights the potential in the indigenous medicine market which is attributed to:

· the considerable size of demand,

· the strong probability of a growing demand,

· a culturally entrenched demand,

· indigenous medicine is a basic consumer good,

· demand is relatively unresponsive to price changes,

· the willingness to pay high prices for more scarce items,

· there are few accepted alternatives,

· consumers prefer better quality products,

· consumers prefer more modem and hygienic packaging, dispensing locations and retail outlets,

· the dynamic nature of indigenous medicine and adaptability,

· the widespread demand for indigenous medicinal products in African and northern hemisphere countries, and

· the different standards required by different consumer groups.

6.1.2 Supply opportunities

Supply opportunities from wild plant populations (non-cultivated plant populations)

Due to the local extinctions of popular plants in areas close to urban markets, communities in remote localities in communal areas have opportunities to harvest and trade scarce plants. Some of these communal areas are located in Mozambique, Swaziland and Lesotho, and could supply scarce plant products to South African markets. The relatively high prices being paid for scarce plants offsets the greater transport costs and makes the more distant localities a feasible option. Communal areas could continue to provide an important source of plant species which are not currently in great demand. Management of these non-scarce plant populations could provide a sustainable source of material for the market. More appropriate harvesting techniques and enrichment planting could contribute to greater yields from wild populations.

Commercial farms, with valuable wild plant populations which have been relatively lightly harvested, could be managed and harvested to provide the grassland and savannah species currently demanded. Small volumes of forest species could be produced on commercial farms, and this could be enhanced through enrichment planting within existing forest areas. The higher prices paid for scarce species could help offset management costs. Furthermore, the continued importation of scarce species is likely to be limited by conservation actions and the Convention on International Trade in Endangered Species (CITES), thereby reducing foreign competition for local medicinal plant production.

State forests in the south western Cape could provide one additional source of bark for at least two of the most popular bark species. Commercial timber extraction results in the felling of mature Ocotea bullata and Curtisia dentata trees. Bark from felled trees could be harvested and transported to market outlets.

Land use changes such as dam developments, afforestation, transport infrastructure development, establishment of new crop lands and any other large-scale developments may make large numbers of doomed plants available for market supply.

Supply opportunities from cultivated plants

South Africa is endowed with sophisticated agricultural, horticultural, silvicultural, chemical processing, industrial and business technology which could contribute extensively to developing indigenous plant resources, processed products and indigenous medicine enterprises. All these industries are large, with a wide range of technologies and skills available, and could be harnessed to produce products for the indigenous medicine market.

There are several international initiatives in medicinal plant cultivation which could provide examples for local suppliers. Production initiatives in India are likely to provide the most useful insights into plant production given the similarities in the economies and cultural use of medicines in India and South Africa [Lambert et al. 1996].

Commercial farmers in South Africa are seeking new economic opportunities. This is due to the anticipated reduction of trade barriers that are associated with South Africa becoming a member of the General Agreement on Tariffs and Trade (GATT). There are also many progressive farmers who would be prepared to speculate on new crops. The opportunity exists for progressive farmers to enter into new economic ventures associated with the medicinal plant trade.

The opportunity exists for subsistence farmers to enter into the production of crops that have high value, such as Siphonochilus aethiopicus and Haworthia limifolia. Indigenous medicinal plants require relatively little attention, and are well suited to low input agricultural systems [Mander, Mander and Breen 1996]. These farmers are also situated within the consumer community, requiring little transport and marketing, with sales taking place at the farm gate. The land reform process in South Africa has resulted in many disadvantaged farmers acquiring previously commercial farms, and they too are seeking economically viable opportunities. The production of medicinal plants is increasingly being considered as an economic option for developing farmers [Mander, McKean, McKechnie and Makhaye 1997].

The extensive reliance on wild populations for supply, results in seasonal and scarcity-related shortages. Cultivation provides an opportunity to provide a regular supply and to make plant available at times when they would be scarce in the markets.

The current plant gatherers represent an important opportunity in the production of cultivated plants. There are an estimated 16 000 gatherers in KwaZulu-Natal who currently harvest plant material for the market. These rural women have expertise in farming given that in most subsistence households in KwaZulu-Natal, it is the women who do most of the agriculture. The gatherers also have a good understanding of the markets for plants and would be well placed to meet the demands of various user groups. The plant species are generally restricted in distribution due to their specific habitat requirements. Gatherers understand the habitat requirements of many of the plants harvested, and therefore could also structure the cultivation systems in ways to meet plant requirements. The involvement of these women in the markets also means that the market provides an opportunity for promoting training and sharing of propagation resources, and enhancing communication and market knowledge.

A pharmacopoeia is being developed in South Africa that can help to standardize the prescription of plants and quantities used in indigenous medicines [Eagles pers. comm. 1997]. This will serve to promote greater degrees of self-medication, and open the market for more individually packaged products. By having a known and accepted dosage available to the market, products could be legally produced for self-medication. In a similar vein, the Medicines Control Council is expected to relax its policies governing 'folk medicine', making it easier for trade in processed indigenous medicine [Gericke pers. comm. 1997].

There are several organizations in the province, such as the Institute of Natural Resources and Durban Parks Department, which have been investigating the medicinal markets, testing the cultivation of medicinal species, and propagating medicinal plants for the last decade. The experiences of these organizations would provide an important resource for supporting any future production initiatives.

In summary, the opportunities for the supply side of the indigenous medicine market include:

· availability of scarce medicinal plants in remote locations,

· availability of medicinal plants on commercial farmlands,

· availability of bark products from logging operations in other parts of South Africa,

· availability of plant supply from changing land-use,

· availability of medicinal plants on managed communal lands,

· availability of a wide range of cultivation, processing, and marketing expertise,

· access to international examples of medicine production for traditional markets,

· a large demand for new agricultural opportunities on commercial farms, subsistence farms, and redistributed farms,

· availability of progressive farmers with access to resources,

· robust nature of indigenous medicinal plants which require few agricultural inputs,

· a wide range of sites for product distribution, ranging from farm gate to urban processing factories,

· ability to supply specific species at times of the year when they are usually not available,

· a large number of plant gatherers with appropriate knowledge that could promote the cultivation of plants for the market,

· an established market system that could provide a communication mechanism for any proposed market developments,

· documentation and establishment of accepted guidelines for use and dosages of medicinal plants,

· several organizations have experience in indigenous medicine markets and in the cultivation of medicinal plant species in farming and nursery systems.

6.2 Constraints

Policy constraints

National and provincial government support for the medicinal plant trade is extremely limited. The National Departments of Agriculture, Health, Trade and Industry, and Environmental Affairs and Tourism are doing little to support the medicinal plant trade in South Africa. At a provincial level in KwaZulu-Natal, the leadership within the Departments of Agriculture and Health have expressed an interest in the trade13. These two large departments have no policy to support the production of materials for the trade, with all their resources focusing on conventional products. The two provincial conservation agencies in KwaZulu-Natal, have taken different actions with regards to the trade. The Natal Parks Board has recently been taking a 'hands-off approach to the trade and has supported small-scale growers around protected areas. The KwaZulu-Natal Department of Nature Conservation has on the other hand, taken a law enforcement approach and has attempted to limit the trade in plants. The local government in Durban has perceived the medicinal trade to be a serious urban management problem, as most of the trade takes place on the streets in busy transport nodes, creating health, traffic and trade control problems.

13 A result of discussions initiated by the author.

All three tiers of government lack appropriate policies to support the medicinal plant trade. Consequently, initiatives for promoting the marketing of plants would have to develop official support. This is unlikely as there may be vested interests in all departments who would probably not support any change in the allocation of resources away from established activities. The challenge of having a previously unrecognized activity being allocated a budget, is enormous given the current priorities, established power structures, limited funds and bureaucratic momentum that exists within government departments.

Institutional constraints

The Medicines Control Council currently places restrictions on the trade in all medicines [Folb pers. comm. 1997]. While the medicinal plant trade has been largely informal, authorities have ignored the implementation of regulations. It is that any formalization of the trade and products would become a target of the authorities, due to the ease with which a formal establishment could be identified and prosecuted.

The previous apartheid government in South Africa contributed to the development of narrow perspective of indigenous medicine in academia, formal business, and all tiers of government. This has contributed to widespread ignorance within a wide range of institutions, and in many cases rejection, of indigenous medicine and the associated trade in products. Negative perceptions of the trade and use of indigenous plants in medicine have become entrenched within institutions in South African society, resulting in indigenous medicine becoming marginalized. There are therefore considerable barriers to any formalization of indigenous medicine and trade.

The declining supply of indigenous plants in communal lands can be strongly linked to the inability or unwillingness to enforce property rights associated with natural resources, including indigenous plants. Any management that attempts to promote the more sustained use of medicinal plants in these areas will face major constraints in that the open access or common property institutions are culturally entrenched and in most cases supported by traditional leaders.

Furthermore, the lack of property rights regarding indigenous knowledge creates considerable suspicion between the market players and outsiders, limiting the opportunities for research and development.

Constraints due to competition

This study has identified considerable competition throughout the indigenous medicine industry, including competition between healers themselves, healers and gatherers, shop traders and gatherers, pharmaceutical companies, and wholesalers. The degree of competition can often be extreme leading to intense trade secrecy or to considerable antagonism between the market players. The aggressive competition has a destructive influence on the industry with little or no cooperation taking place, and consequently there has been little development of the industry.

The divisive competition also weakens the lobbying ability of the industry in government, allowing the industry to be dictated to at most levels of government. Disunity within the industry promotes the marginal position of indigenous medicine in society.

Competition is likely to increase as more market players enter the market at different levels. Market observations in KwaZulu-Natal (this study) and Mapumalanga [Mander 1997a] indicate an increase in entrants and/or interest from gatherers, street traders, indigenous healers, subsistence farmers, commercial farmers, forestry companies, drug processing companies and international bio-prospectors. The increase in market players, combined with the limited stocks of plants, is likely to reduce the income per market player, especially at the gatherer and trader levels in the market.

Supply constraints

The supply of popular plant species is declining as result of intense harvesting pressure on wild populations in communal areas in the eastern region of southern Africa. The declining plant populations result in irregular supply and reduce the opportunities for developing products associated with these species. The decline in forest species is the most acute, and is further exacerbated by the long period required to grow usable trees for the market.

The intensity of use has also led to several local extinctions, resulting a decline in the genetic diversity within the species. The reduction in genetic diversity may result in the loss of valuable variations within the species that may have significant agricultural, medicinal and industrial potential.

High value plants such at Siphonochilus aethiopicus and Warburgia salutaris have been intensively harvested from a wide range of properties, including private, state and communally owned. Consequently, there are few populations of these high value plants which could form the basis of new products. The cultivation of these scarce species would probably be the only option for producing sufficient quantities for experimental processing and marketing.

There are few established indigenous medicinal plant production centres, with a few demonstration farms and nurseries producing information and source materials for interested farmers and healers.

Medicinal plants are also relatively slow-growing species with most of the popular species taking at least several years to develop to a size currently traded in the markets.

The total reliance on wild populations for market supply results in both an irregular supply of plant quality and quantity, making product and market development more difficult.

Skills constraints

There are major skills limitations in the whole area of medicinal plant production and marketing. The plant gatherers and informal traders have low literacy levels, which may limit development of the market. The introduction of new concepts, such as the large-scale cultivation of medicinal plants and the processing of raw materials, could be limited by the current skills within this group.

As the market has been largely informal and strongly traditional, there are few skills in business management, with a large number of market participants having limited understanding of the business approaches required to exploit the wide range of opportunities which are present in the market. The decline in market share that has occurred within the shop trading segment and their ineffective reaction to trying to retain their share, can be seen as an example of the limited skills available in the market.

There are also few skills available regarding the management of wild populations and the cultivation of medicinal plants within farming and conservation systems. Current harvesting has largely focused on maximizing the extraction of products for sale to the market, resulting in the establishment of destructive harvesting approaches. The establishment of a culture of destructive harvesting is likely to limit the development of more sustainable methods in the future.

Marketing information constraints

There is little coordination in the marketing of medicinal plants and products. The most common marketing activity is practised by the healers and consumers, who may inform gatherers or traders of the plants they require. The supply of these ordered products can take a long time, with the gatherers having to return to their collecting areas and then returning to the market with the desired material, should they be able to locate the product.

In may cases, gatherers may bring materials to the market which are already available in large quantities, resulting in wastage if products are perishable, or resulting in very low prices being realized.

The street traders do not even have a telephone which gatherers could phone to enquire about the stock required in the market. The trade is largely based on chance, with gatherers not knowing (unless they have scarce plants) that they will be able to sell their products for a reasonable price. Market information is largely shared by word-of-mouth, leading to a long turn-about time in the market, contributing to a high-risk situation where suppliers may not know whether the requested products are still in demand by the time they reach the market. Many of the traders have indicated that the market requires a telephone where they can enquire about current sales and demand.

There is also little recent information available regarding the stocks of common wild bulbs and trees on commercial farms, creating an uncertain market for any cultivation initiatives and for resource management activities. Farmers cultivating medicinal plants may be competing with other farmers who may be 'mining' their plant resources, resulting in a lower prices being charged by the 'mining' system and creating substantial risks for the cultivation of medicinal plants.

The economic feasibility of cultivating plants for markets is currently unknown. There are no economic models which can identify the financial feasibility of medicinal plant species in South Africa14. The lack of financial models limits the willingness of financing institutions to support the indigenous medicine industry.

14 This market study is however part of a broader study (being undertaken by the Institute of Natural Resources) investigating the economics of cultivating medicinal plants for local markets.

Spatial constraints

The dispersed nature of the wild plant resources and the demand for plants, creates a market where there is extensive transportation of materials between producers and consumers. The transport of material may also be across international boundaries, with further barriers. The marketing of plant resources from wild plant populations therefore contributes considerable costs to marketing.

In summary, the constraints facing the indigenous medicinal plant market include:

Policy constraints

· a policy environment which is negative towards the industry,

· no government recognition of the opportunities offered by medicinal plants to promote development,

· government departments who may facilitate market development already face severe budget constraints within existing priorities,

· vested interests within existing government departments to maintain the status quo,

· common property or open access rights regimes in large areas which frequently promote resource degradation,

· bureaucratic controls concerning the formal trade of indigenous medicines, which may limit product development to only highly sophisticated operations with massive financial resources,

Awareness limitations

· a narrow perspective of indigenous medicine in academia, business and government,

Industry development limitations

· an industry with aggressive competition within and between market segments, resulting in the industry having limited lobbying ability,

· competition which is likely to increase and reduce returns for the lower end of the market,

· competition within the industry that undermines rather than develops the industry,

Plant supply limitations

· an almost total reliance on wild harvested plants for the trade,

· declining plant populations which results in many high value species becoming increasingly inaccessible,

· diminishing product development opportunities due to limited access to sufficient plant stocks,

· local extinctions are resulting in a decline in the genetic variation within high value species,

· the supply of plant products is irregular, in quantity and quality,

· forest resources are extremely limited and will provide few of the scarce species in the future,

· the distances between major markets and various plant sources are large, generating large costs in the trade,

Production constraints

· there are few production initiatives in the province,
· many high value species are slow-growing,

Skills limitations

· the literacy of a large number of market players is poor, creating limitations for developing the industry,

· business skills are poorly developed in a number of the sectors,

· there are few skills in the sustainable use of medicinal plant resources,

Poorly developed market information systems

· there are inefficient market information sharing systems in the industry,

· there is little knowledge of the financial opportunities in cultivating and managing stocks of medicinal plant species,

· the lack of information regarding financial feasibility discourages financing institutions from supplying credit,

· there is little known of the availability and condition of plant stocks on privately owned farms.

6.3 Potential

6.3.1 The scenarios
6.3.2 Summary of potential opportunities

The potentials within the medicinal plant markets are best examined in various scenarios. The potentials within the market depend on the outcomes of interaction between key uncertainties and the fixed factors in the market.

There are a number of fixed factors in the market which can also be considered the 'rules of the game'. These fixed factors are conditions in the market which are unlikely to change significantly in the short term15, and constitute the foundation of any scenario which may develop. Such fixed factors include:

· a large and growing demand for medicinal plants,
· a steadily declining supply forest species in the short term,
· a fluctuating supply of grassland and savannah species in the short term,
· an increase in the price of scarce plants,
· the plants' environmental requirements and production potential,
· an increase in numbers and diversity of market players,
· the majority of the market players having limited business skills in the short term.

15 The short term refers to a period of time within the next five years.

In contrast to the 'rules of the game', there are variable factors which will to a large extent determine how the market will change in the future and what potentials in the market could be achieved. In the medicinal plant trade the key variable factors are the actions of the different market players and the associated authorities. The key uncertainties include:

· the degree to which the current market players cooperate to develop a common vision and lobby for government support,

· the responses of government departments (Health, Agriculture, Trade and Industry, Water Affairs and Forestry, and Environment and Tourism) to the indigenous medicine industry,

· the responses of national, provincial, and local political leaders to the indigenous medicine industry,

· the response of formal business to the opportunities in the industry, and

· the quantities demanded by consumers for different levels of processed, certified, standardized, and packaged products.

The combinations of the 'rules of the game' with the various actions of the market players will determine the range of scenarios which could unfold.

6.3.1 The scenarios Scenario 1 - No intervention - A continuation of the current trends Scenario 2 - Industry driven intervention - Where big business takes the initiative Scenario 3 - Collaborative intervention - Where current market players, business and government collaborate

A wide range of scenarios could develop depending on the actions of the various role players. In order to illustrate the range of possible scenarios, three scenarios will be developed and include:

· Scenario 1 - No intervention - a continuation of the current trends,
· Scenario 2 - Industry driven intervention - where big business takes the initiative,
· Scenario 3 - Collaborative intervention - where current market players, business and government cooperate.

These scenarios are gross generalizations but will serve to show potentials and as well as market needs. Scenario 1 - No intervention - A continuation of the current trends

With a growing demand and diminishing supply, there will be an accelerated decline in the availability of popular plant species, with forest species, in particular, becoming unobtainable. Price increases will encourage the 'mining' of wild plant stocks by more sophisticated means and with greater involvement of commercial enterprises. 'Fly-by-night' operators will be encouraged, focusing on profit maximization in the short term by harvesting and trading high value species. The importation (legal and illegal) of scarce plants will increase from countries where plants continue to be available.

Excessive competition in the market is likely to increase, fuelling division within the industry. The government is unlikely to recognize and support an industry where there is considerable disunity, and it would be more inclined to focus on limiting and controlling the industry.

The lack of guaranteed quantities and quality of plant species supplied will limit the development of processed products, promoting the continued trade in raw products. Large pharmaceutical companies, with a growing interest in the indigenous medicine trade16, are likely to focus on a narrow range of species which could be produced in the short term. Slow-growing species are unlikely to be produced by commercial enterprises.

16 The indigenous medicine trade has been one of the few preserves of the black community which has not been penetrated by white or foreign commercial interests. With increasing access to information regarding the indigenous medicine trade, commercial businesses are becoming more interested in the large informal medicinal plant trade.

Such a scenario will result in an industry where:

· current market players become increasingly marginalized through the declining supply of plant materials,

· commercial producers and large companies will focus their marketing at the upper end of the market with a few products, such as Siphonochilus aethiopicus, Haworthia limifolia, Warburgia salutaris, Boweia volubilis and Alepidea amatymbica which may provide high returns,

· government will attempt to increase their control over harvesting, trade and dispensing of plants,

· plant resources will decline and slow-growing popular species or genera, such as Ocotea bullata, Curtisia dentata, Cassine, Boophane, Schlecterina and Stangeria may disappear from markets,

· healers and small-scale farmers will produce insignificant quantities17 of plant material for their own use or trade,

· commercial harvesters will access existing stocks of high value species in previously unexploited areas, such as commercial farms, forestry estates, and protected areas,

· lack of raw materials will promote the growth of other industries, such as first world pharmaceuticals, foreign exporting companies, and alternative synthetic producers,

· lack of raw materials will result in a decline in the industry,

· a few large producers/processors will dominate the market,

· an industry which threatens biodiversity.

17 While there is limited support from government, producers are unlikely to be able to grow sufficient quantities to make a significant contribution to the quantity demanded.

The potential opportunities in this scenario will be largely concentrated within the large processing companies and their associated plant producers. Foreign exporters and commercial farmers will also have opportunities to supply raw products in the short term.

The chances of this scenario developing are relatively high while the industry remains strongly divided and is unable to develop support from, and partnerships with, commerce and government. Scenario 2 - Industry driven intervention - Where big business takes the initiative

The resurgence of intensive bio-prospecting and the increasing interest from large commercial enterprises to seek new profit-making opportunities in previously unexploited markets, will stimulate commercial enterprises in the indigenous plant trade. Declining returns to conventional agriculture will result in increased interest in medicinal plants from the commercial agriculture sector. A more unified indigenous medicine industry will encourage the development of partnerships between current market players and more developed commercial interests.

Partnerships between large commercial interests and current market players will combine the expertise and resources available to both groups. The land and plant resources of black communities and/or commercial farms is likely to be combined with the sophisticated skills of processing and marketing which is present in the more developed commercial sector. Such partnerships are likely to be oriented to profit maximization, will be strongly market driven and consequently will be largely focused on the fast-growing plant species. Without partnerships, there is unlikely to be sufficient support from indigenous healers for the new products, and consequently demand may not be large enough to warrant investment in cultivation and processing.

An initiative led by business is likely to promote the partial development of a small number of current market players, with the formal business interests maintaining those skills and activities which are likely to deliver the greatest returns. Furthermore, business is likely to focus on a resource exploitation and their own company development rather than on resource management and industry development.

The industry will probably focus on a range of species greater than in the first scenario due to the relatively easy access to cheap land and labour resources. Popular but slowing growing species, and less popular species are likely to continue to be harvested from wild populations, with little effort directed at management of these stocks. Farmers and communities in communal lands will be encouraged to supply raw materials, while the value-adding processes are likely to be undertaken within the sophisticated commercial processing sector.

Such a scenario is likely to result in an industry which:

· produces high value products for the upper end of the consumer market,

· produces fast-growing species, such as Siphonochilus aethiopicus, Warburgia salutaris, Haworthia limifolia, and Boweia volubilis which can be produced relatively efficiently,

· limited numbers of small-scale growers and commercial farmers become involved in the market but for the production of raw materials only,

· consumers at the bottom end of the market will continue to use a dwindling supply of wild plants,

· wild plant resources will decline and slow-growing popular species will disappear from markets,

· commercial harvesters will access existing stocks of high value species in previously unexploited areas, such as commercial farms, forestry estates, and protected areas,

· there will be a reduction in the size of the market with fewer plant gatherers and a smaller group of traders selling declining quantities of wild plants and increasing quantities of products produced by large processing companies,

· produces a range of processed products for exporting to African, American, European and Eastern markets,

· market information will be largely confidential and inaccessible to the broader market,

· is dominated by producers/processors and traders/healers from the middle to upper end of the supply trade.

The potential opportunities in this scenario will be greater than in Scenario 1, but will still be limited to a restricted number of the current market players. Beneficiation will largely occur within sophisticated businesses but with the production of plant material taking place on commercial farms for few of the highest priced plants, and developing farmers producing high and moderate priced plants. The potential opportunities of this scenario will be limited to the better-off sectors of the current market, commercial farmers, and large and intermediate processing businesses.

The chances of this scenario developing are related to the ability of commercial enterprises (which have greater skills in accessing capital, production, processing and marketing) to develop partnerships with the current market players. It is possible that collaboration may occur in certain locations or sectors of the market.

Without government support for the widespread development of skills amongst the current market players, particularly at the lower end of the supply chain, it is likely that the best scenario which could develop would be Scenario 2. Industry development would be restricted to activities which could be profitable for the commercial sector. The sector not participating in new initiatives would probably decline and this would benefit the commercial businesses who would gain greater control over the supply of products to the indigenous medicine trade. Scenario 3 - Collaborative intervention - Where current market players, business and government collaborate

In this scenario, current market players, business and government collaborate to maximize the potential within the industry. Government recognizes the potential of the industry to promote economic development, provide wide access to affordable and culturally acceptable health care, and promote biodiversity conservation. Government develops an enabling environment for the industry through the development of appropriate national, provincial and local policies, and the allocation of resources to address development in the sectors which private enterprise would be unlikely to support. Government also supports organizations which promote the development of the industry, particularly those focusing on the less developed sectors.

In this scenario one could expect to see similar commercial activities as in Scenario 2, but with a broader participation of current market players. The development of skills at lower levels in the industry could see the development of a wide range of different resource management, production, processing and retail enterprises. A greater focus on skills development at the bottom end of the market could see individuals and cooperatives developing small enterprises that would retail products of an appropriate standard and price to the middle and lower end of the consumer market. Production could take place within the user communities, providing development opportunities and increasing access to essential medicinal products.

With appropriate assistance and direction, a wide spectrum of the market players could participate in the market, maximizing the opportunities which the industry could provide. Market information could be supplied by institutions in accessible forms, promoting the participation of a wide range of current market players in the industry. Government investment in the development of appropriate technology for production, processing and packaging could promote the participation of small-scale suppliers in the market, providing appropriately priced products for user communities.

The involvement and support of government could promote a greater focus on the management of wild stocks, support biodiversity conservation in the long term. Government could promote the production of slow-growing species which business would be less inclined to pursue. Government involvement is also likely to enforce 'rules of the game' which will result in greater responsibility towards natural resource use, intellectual property rights, and equitable partnerships agreements with less developed communities. Furthermore, the provision of incentives by government could ensure that beneficiation is optimized within rural areas and within South Africa itself, promoting a trade in high value processed products rather than a trade in low value raw materials.

Collaboration between current market players, business interests and government, could result in an industry that includes the following:

· establishment of a sustainable supply of fast- and slow-growing (Ocotea bullata, Curtisia dentata, Bersama) plant species,

· management and sustainable use of existing wild stocks,

· widespread cultivation of both slow- and fast-growing plant species in small- to large-scale agricultural systems,

· production of a wide range of raw materials and processed products,

· more efficient use of plant material harvested,

· more beneficiation (with greater levels of hygiene and certification) of products with better returns to suppliers and more satisfied consumers,

· greater levels of health care with more standardized quality products,

· production of goods throughout the year in different quality packaging, contents and retail outlets,

· establishment of production, processing, distribution, and retail enterprises to provide a range of goods for upper, middle and lower income consumers,

· establishment of enterprises focusing on local, national and international markets,

· provision of plants for testing, and developing market products,

· incorporation of medicinal plant production into conventional range management, forestry, horticulture and crop production programmes,

· involvement of a wide range of current market players in the diversification of the industry.

6.3.2 Summary of potential opportunities

In summary, the three scenarios offer three different potential opportunities to the market.

Scenario 1- No intervention - the continuation of the status quo - is likely to offer few large benefits to a few large companies, while most of the current market players continue to experience decreasing access to popular and effective plants. A narrow range of species would be cultivated, processed, and distributed for the upper end of the market. Biodiversity and health care may decline.

Scenario 2 - Industry driven intervention - collaboration between progressive current market players and big business interests - is likely to offer large benefits to large and intermediate companies and a limited number of current market players. Cultivation, processing, and distribution would occur for the middle and upper end of the market. Small-scale traders and gatherers are likely to continue to trade in wild plants, but supply is likely to decline as the consumption of cheap products continues at the lower end of the market. Biodiversity and health care may decline.

Scenario 3 - Collaborative intervention - collaboration between current market players, government and business interests - this could see the development of a wide range of processed products from simple rural products to sophisticated industrial products. Numerous market players could develop a range of different quality products for a wide range of consumers, with different prices which suite the consumers' budgets. Such a scenario, is likely to promote the growth of the industry, and promote development at a broad scale. Investment in resource management is also more likely in this scenario. Health care will also benefit.

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