Medicinal and Aromatic Plants (MAPs) sector of Nepal has always been surrounded by several altercations since its inception. This behavior exists due to different reasons which are valid yet inappropriate. For instance, the communal assumptions related to this sector which often interrogates the ethics of a private sector stakeholder.
The assumptions have lead to ignorance to these stakeholders at different stages. Sometimes this faith has stripped them from their rights and potential income opportunities. Many people mostly comment about the sector not performing adequately or full of its potential (My Republica). We can say not entirely but this hostility has vital role to blame for such losses.
The customary labeling for these medicinal plants private sector stakeholders are as follow.
The stakeholders either collect medicinal plants from wild sources or cultivate it. People believe it is easy to collect and trade medicinal plants since all traders or collectors just need to pluck the herbs and stock it at one place.
The collection of these medicinal plants is way more complex procedure than the assumptions. A collector needs to submit an application to District Forest Office seeking permission for collection (Section 11, Sub rule 1 (Forest Regulation 2051 , 1995)). The officials grant collection permit on behalf of Department of forest work plan. The Regional Forest Director of the respective Regional Forest Office submit this work plan to Ministry of Forest and Soil Conservation (MoFSc) per annum before the collection commence (Section 5, Sub rule 1 (Forest Regulation 2051 , 1995)). The applicant has to submit levied royalty as per the rate assigned by Government of Nepal (GoN) under gazette to the commodity (Section 8, Sub rule 3 (Forest Regulation 2051 , 1995)).
The collection area is generally very remote which lack proper infrastructures like road, transportation. The collectors/farmers stock their collection and start contacting traders. Mostly in such areas they use traditional modes like horses, labors to transport the collected herbs. They bring the products from collection areas to the place where road connectivity is available. Sometimes they need to travel miles away from collection areas.
Similarly for exports, the traders need to submit an application to their respective District Forest Office seeking permission to export to foreign nations (Section 13, sub rule 1 (Forest Regulation 2051 , 1995)). The officials verify the product through Gazette of Nepal whether it is ban or not. Once verified, they grant permit to the exporter to proceed further with exports.
Requirement for Export
Exporting Medicinal plants is very complicated task. The exporters need to abide with several international standards like Plant Quarantine and Prevention of Food Adulteration. When these exports take place to third countries like Europe, USA, Japan, the companies need to provide explicit lab assessment of the products with proper documentation. They should be aware of the chemical constituents of the herbs. On behalf of it, they prepare Product specification, Technical Data Sheet (TDS) and Material Safety Data Sheet (MSDS) for their importers.
High operating Profit
It is very common to listen from people about the income of traders working in Medicinal plants. This is widely believed that the private sectors operate at high profit and the nutshell stakeholders like farmers or collectors earn less. On the contrary, the reality is very different. I am sure it may sound strange to many but the farmers or local collectors are the real gainers in this chain.
Market Price of Medicinal Plants
There are approximately 50 medicinal plants which are in trade circulation in Nepal consistently. The commodity price of Medicinal plants in Nepal is under influence of India and China. It is because these markets are close to the country and comparatively easy to access. The national wholesalers of Nepal quote their prices with respect to the prevailing price in these places (www.ansab.org). With intervention of various organizations, now the farmers and collectors are aware of the prices which again empower their negotiation.
The international market competition, availability of product and demand influence the price. The products like Soapnut, Bay leaves have reputation of cheap product in international market where the exporters face cut throat competition with suppliers from other nations. The scenario extends for other products as well. There are few products which are expensive in Nepal but cheap in International market like Morels, Purified Shilajeet. This happens because there are other countries which offer the products at cheaper price.
Therefore, the traders buy products from farmers/collectors at certain price which is fix over the market price; above it, they are liable to bear the charges of legitimate documents, transportation, labor, additional processing which is generally required by their respective buyers. As a result, the amount and value of a consignment of medicinal plants may appear in millions but in reality the operation cost is very high. Most of the time traders work at very low margin like Re. 1 or Rs. 2 and sometimes they trade without any profit just to save their capital.
High Market Risk
Furthermore, another biggest threat to this trade is the fluctuating price of products. This is very unpredictable and again is influenced by international market. Irrespective of the purchase and sales, the traders/collectors are always haunted by rise and fall of price.
People often label Medicinal plants trade as illegal business. I do not deny the malpractices attempted by few individuals whereas there are certain loopholes which should not be ignored on this ground. Obviously, generalizing facts to entire sector is clearly not fair. There are evidences when officials were also found guilty in such scenarios (Perception or reality? A case study of corrupt practices in the forestry sector in Nepal, 2015) (The Himalayan Times). Therefore, putting the entire blame on private sector for everything is little too much.
Incapacitate Domestic Market
Moreover, the nation’s policies for this sector encourage such malign practice to an extent. It appears surprising but that is persistent reality. For example, the collection permit of herbs for which Government has made value addition mandatory for exports like Jatamansi, Sugandhkokila. The current system does it on the basis of work plan inventory. Since the value addition is compulsory the decision makers should be aware of the domestic industry consumption and the collection permit should release accordingly.
Unfortunately, this is not the practice. So, say the domestic consumption is 100 tons and stakeholders have collection of 500 tons what are they going to do with rest 400 tons. As per the rule, they cannot export it. As matter of fact, they are bound to take such steps. In addition to this, sudden ban forced on trade like recently implemented CITES rule is also an influence for such activities. I have covered this in detail in my previous blog, you can read it in attached wlink.
Apart from this, attempting illegal trade in forest products of Nepal is very critical. The documents and collection is monitored closely at each and every step. Besides forest officials, Nepalese Police also has right to scrutiny such resources in case of any doubt (Section 58, Sub rule 1 (Forest Act 2049, 1993)).
Another reason which strengthens this concept is absence of adequate data of collection and trade. The statistics presented by several related Government line agencies is itself contradictory and appears unreliable. For example, as per the data published by Department of Forest in F.Y. 2071/72 3079.023 metric tons (30, 79, 023.40 Kg) medicinal plants were collected (Hamro Ban, 2071/72). On the contrary, the TEPC data of same year shows export of 4294.065 metric tons (42, 94, 064.512 kg) (Annual Trade Data for Fiscal Year 2071/72), 2071/72). Besides this, customs data of the same year shows export of 4321.089 metric tons of herbs (43, 21, 089 kg) (Nepal Foreign Trade Statistics, Part II, 2071/72).
Again the biggest altercation to these statistics is export data of Jadibuti Association of Nepal (JABAN) which shows export of 4609.287 metric tons (46, 09, 287 kg). JABAN is an organization formed by union of trader of herbs in Nepal. It is very astonishing to find how the statistics of each and every organization conflict with each other. This variation of statistics with respect to each organization shows the ignorance of decision makers and trivial fate of the sector.
Other than this, before raising any accusation over the trade or stakeholders the person should investigate the evidences they have to question. At present, the 354 million worth medicinal plants has been exported from Nepal (Kathmandu Post, 2017). Simultaneously, the most important feature of this sector is the contribution it has in the stakeholder’s livelihood. It has provided them support of income and medicine both.
People often believe that the collection of Medicinal and Aromatic Plants (MAPs) is unsustainable. Nowadays, private sector has become very aware and concerned about the resources. In fact, there are circumstances where people have understood economic benefit of the herbs with their support. Consequently, the farmers have started sustainable practices. Further, the exporters are more vigilant and accountable for such practices. The reason behind it is that Nepal has started focusing on International market for which social and environmental responsibility is utmost requirement. In absence of these, they may fail to find potential business partnership.
Foreign Trade Statistics of Nepal (Annual Trade Data for Fiscal Year 2071/72). (2071/72). Retrieved from TEPC Website: http://www.tepc.gov.np/news_events/full_story/foreign-trade-statistics-of-nepal-annual-trade-data-for-fiscal-year-207172
(1993). Forest Act 2049. Kathmandu, Nepal: Ministry of Forest and Soil Conservation.
(1995). Forest Regulation 2051 . Kathmandu, Nepal: Ministry of Forest and Soil Conservation.
(2071/72). Hamro Ban. Kathmandu, Nepal: Department of Forest.
Kathmandu Post. (n.d.). Retrieved from eKantipur: http://kathmandupost.ekantipur.com/news/2017-06-17/export-earnings-from-ntis-products-drop.html
Kathmandu Post. (2017). Retrieved from eKantipur: http://kathmandupost.ekantipur.com/news/2017-06-04/herbs-worth-rs542m-exported-to-india.html
(2071/72). Nepal Foreign Trade Statistics, Part II. Kathmandu, Nepal: Department of Customs.
Perception or reality? A case study of corrupt practices in the forestry sector in Nepal. (2015). European Bulletin of Himalayan Research , pp. 9-34.
The Himalayan Times. (n.d.). Retrieved from https://thehimalayantimes.com/nepal/forest-staffers-helping-boulder-smugglers/