By Rebati Adhikari
The unique topography makes Nepal extensively rich being home to 3.2% of world’s flora (as per Nepal’s fifth national report to the convention on biological diversity) covering only 0.1% of the earth.
According to Trade and Export Promotion Centre, in the fiscal year 2072/73, herbs worth Rs 1.24 billion were exported in contrast to Rs 1.63 billion in the fiscal year 2071/72. Rs 1.60 billion in 2070/71. Meanwhile, a study on the impact of Yarsagumba on Nepali economy done by Nepal Rastra Bank shows in the fiscal year 2070/71, Yarsagumba worth Rs 4.92 billion was collected from 11 districts of Nepal which is three times higher than the overall herbs export of fiscal year 2070/71. That means a vast resource of herbs remains untapped.
The government of Nepal has recorded the availability of 800 species of herbs in the country. We take pride in the affluence but unfortunately we have been unable to exploit the resources to make it a major source of income for the country. Where is the loophole – in the policy, in the production or in the trade?
It is not that nothing has been done. A Memorandum of Understanding was signed in 1999 between the Department of Plant Resources, Ministry of Forests and Soil Conservation and the Central Department of Botany, Tribhuvan University and international partners to publish 10 volumes on the flora of Nepal. The first volume on Flora of Nepal was published in 2011 and other volumes are known to be in the process of publication. Several other documents have been published by the Department of Plant Resources meanwhile. But government efforts on herbs promotion are clearly lackluster in effect. “There are only few indepth researches done so far on herbs because Nepal doesn’t have highly equipped standard laboratories nor a conducive policy. Collaborative research is rare. Most of the research are carried out at individual levels by the Department of Plant Resources, the private sector, Nepal Academy of Science and Technology (NAST),” says Yadav Uprety, Program Officer at Research Centre for Applied Science and Technology (RECAST). According to Uprety, the problem lies in every part of the chain – herbs production, collection and trade. Illegal trading to Tibet is one of the major predicaments. “There is a mechanism for monitoring herb trading but we lack resources. Besides, during the documentation of available herbs, all parts of the country are not covered. There could be more than 50% herbs that remain yet to be documented.”
Department of Resources had allocated Rs 2,70,63,000 budget in the fiscal year 2072/73 for the study, investigation and marketing of the herbal plants which is to a large degree very less for a country which is endowed with infinite herbal resources. However, only Rs 2,60,30,000 out of the total amount, was spent. Uprety informs that most of the her researches are funded by external sources. Projects are initiated, performed and concluded in collaboration with other countries. “Department of Plant Resources has identified 270 herbs as medicinal plants while research shows 700 species are of medicinal nature. The department has not been able to do enough research. It’s the responsibility of the nation to evaluate, estimate the resources of the country, or else how can the country harness from it”, questions Govinda Ghimire, President of Nepal Herbs and Herbal Products Association.
When researchers visit villages in the course of research, they seek assistance of locals in terms of the special traditional use of the herbs and their names. Based on information provided by locals, they further their study on herbs, collect the species, especially the valuable part of it and test it in the lab. If the chemical properties of the herbs are verified as claimed by the locals, it qualifies as a herb.
India is the largest consumer of Nepal’s herbs. 70-80% of the products are exported to the southern neighbour. And it is largely unprocessed. “In fact India does not want to import processed herbs. May be it wants to promote cartels,” suspects Ghimire. After India, Hong Kong, France, Belgium and China are the major importers of Nepali herbs particularly essential oils. According to the Trade and Export Promotion Centre of the Ministry of Commerce, some prominent essential oils and extracts which are commonly produced in Nepal are Citronella oil, Palmerosa oil, Sugandha Kokila, Lemongrass oil and Lichen extract. “Of the total production, only 5-7% is used here as we lack the industries. The monopoly of Indian medicines both in Ayurveda and allopathic front has impeded the growth of Nepali industries. It is difficult to compete with Indian companies as “there is no subsidy for cultivation or loan facility or custom waiver on import of technology or in packaging materials. We need to import paper from India even to make cartons. To make medicines, we need high quality ISO standard packaging materials. With 35 to 45% custom duty added with 13% VAT, there is no room to breathe for business people. There is no separate herbs export policy either. We are working with the most entangled policy collaborating with and taking approval from five to six government bodies,” laments Ghimire. When it comes to policy, export of crude herbs is hassle free than value added products.
“No other herbs come on par with that of Nepal in terms of the quality. Diversified geography and climate has earned Nepali herbs the distinction of being the best in terms of quality. At present, Nepal’s essential oils hold 0.1 % market share in the international market. Unfortunately we don’t have infrastructure to maintain the quality. People lack awareness about harvesting, processing, packaging and promotion and marketing of the end products. Moreover, some are pre-harvested, improperly stored and the dearth of warehouse and proper transportation facility makes it subject to contamination. The private sector is doing as much as they can within their capacity. “Plant species are rich in itself but lack of knowledge on proper handling has been eroding the quality of the herbs,” states Ghimire. He deplores the government for only caring about revenue and not carrying out duties like declaring pocket zones, keeping tab on the amount of collection. Summarising the government duties towards promotion and preservation of herbs, Sishir Panthi, Information Officer at Department of Plant Resources says, “We are developing cultivation technologies and transferring them to farmers. We are providing trainings and running different subsidy programs. According to Panthi, subsidy is provided to farmers on herbs farming, fertilisers and free seedlings have been distributed to earthquake affected districts. The volume of the subsidy depends on the budget of the district office and the number of interested farmers. On the conservation part, the government collects herbs that are on the verge of extinction and cultivates it in Godawari Botanical Garden maintaining a suitable climate.
It is estimated that a large chunk of the population of Nepal depends on herbs collection for their livelihood. However, all of them are not registered. Farmers collect herbs, they bring it to road-head traders, it is then transported to small or big entrepreneurs, which is packaged for export. In ‘Study on Domestic Market of Medicinal and Aromatic Plants (MAPs) in Kathmandu Valley’ Uprety states that herbs business is one of the secret businesses where the trade channel is kept confidential because of illegal trade. “When there are step by step obstacles, it does give space to illegal trade,” states Ghimire. Herbs market is a free market. Nobody fixes the price of the herbs. But Ghimire demands that minimum standard, value, price should be fixed by the government as in the case of sugarcane.
Patanjali, an Indian herbal brand, has been able to stir the Nepali market in a short span of time. The rise of Patanjali is associated with its marketing strategy – using the value of Yoga Guru Ramdev. Nepali herbal products however have failed in cashing in on the demand. Ghimire alleges that the government does not have any marketing strategy in any product, not even agricultural products, the sector Nepal’s economy heavily relies on.
Ministry of Commerce did enlist herbs as high potential and formulated a strategy to encourage some products. But there is no input at the production level, neither strategy nor vision to reach the international market. Nepal Trade Integration Strategy (NTIS) 2010, an initiative of the government developed to enhance the export of the country, had listed medicinal herbs/essential oils on seventh position as product with export potential. In the revised NTIS 2016, medicinal herbs/essential oils climbed up to third place.
Herbs have made 5% contribution to the GDP. Ghimire claims this figure will double in just another two years if only policy hurdles are cleared and new investors brought in. He demands for separate export ministry so that trade can excel through a one window system.
Herbs and NFTP development policy is one of the primary policies governing production, cultivation and export of herbs. The to do list of the policy includes adopting good harvesting practices, preservation of to be extinct herbs, management of export of herbs identifying the demands of national and international markets, declaring particular areas as herb areas, easing taxation system and certification of herbs produced by the private sector, creating favourable environment for the sale and distribution of herbs produced by the private sector, handover of suitable technology to the locals for commercialisation of herbs, identifying commercial prospects and more. Likewise, Forest Sector Policy 2000 talks about passing regulations discouraging the export of unprocessed products and encouraging the export of high value added products and promoting the commercialisation of non-timber forest products. “The policy is in itself very good but the implementation part has been poor because it has not assigned tasks to the respective bodies. The complexities of the current policy and issues with taxation system are being addressed through the upcoming National Forest Policy,” states Panthi.