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Cultivation of Medicinal Plants in Uttarakhand

Due to excessive extraction of medicinal plant species in high altitude areas, Uttarakhand has seen a serious depletion of its biological resources. The state government has introduced policies to promote the conservation of these species and encourage farmers to cultivate them and supplement their incomes. This paper examines the impact of the Uttarakhand government's promotional policies and also looks at a project that has built a supply chain to cultivate these plants for export to Europe.


Cultivation of Medicinal Plants in Uttarakhand

Ghayur Alam, Lucian Peppelenbos

Due to excessive extraction of medicinal plant species in high altitude areas, Uttarakhand has seen a serious depletion of its biological resources. The state government has introduced policies to promote the conservation of these species and encourage farmers to cultivate them and supplement their incomes. This paper examines the impact of the Uttarakhand government’s promotional policies and also looks at a project that has built a supply chain to cultivate these plants for export to Europe.


Economic & Political Weekly

march 7, 2009 vol xliv no 10

he mountainous state of Uttarakhand is endowed with a rich variety of medicinal plants, many of which are in great demand in the domestic and export markets (Government of India 2000). A large proportion of this demand is met by collection from the wild. This is particularly true for plants found in high altitude areas, which are generally characterised by fragile ecosystems. As a result of intensive extraction many species of medicinal plants are now seriously depleted. For example, according to collectors in the Johar Valley in Pithoragarh district known for its rich biodiversity, the average dry weight of atish (aconitum heterophyllum) collected by them in one day declined from 200 grams to 70 to 100 grams during 1998 and 2002 (Alam and Belt 2004).

1 Introduction

Recognising the threat to a number of species of medicinal plants, the Uttarakhand government has formulated a series of policies for their conservation. These policies have two main components: regulation of the collection of medicinal plants from the wild to protect biodiversity, and promotion of cultivation to meet demand and provide farmers with new income opportunities (Government of Uttaranchal 2002). The policy to promote the domestication and cultivation of medicinal plants has met with very limited success. In the following paragraphs we review this policy and examine the constraints faced in its implementation. We then describe a project set-up in the Uttarkashi district to support the cultivation by small farmers, and remove many of these constraints through collaboration between the public and private sectors. Third, we analyse the socio-economic conditions of the farmers involved in the project and examine how the cultivation of medicinal plants fits into their farming systems and livelihood strategies. Finally, we discuss the insights, lessons and policy recommendations derived from the project.

2 Policies and Constraints

The cultivation of medicinal plants is considered to be of great importance for the safeguarding of biodiversity and contribution to rural livelihoods in Uttarakhand. It is hoped that cultivated medicinal plant material will provide an alternative source of supply to the market, and thereby reduce the need for collection of these plants from the wild. Cultivation will also provide an additional source of income for the state’s rural poor. This is especially important as 80% of Uttarakhand’s working population depends on agriculture, but poor land quality and the small size of landholdings lead to low rural incomes. For example, half of the farming households own less than two acres, and only 5% own more than five acres (Maikhuri, Rao and Semwal 2001). Farming is mainly subsistence-oriented and market access is


restricted due to poor roads and communication infrastructure. As returns from traditional crops decline, the cultivation of medicinal plants is seen by many as an important source of farm income. Compared to bulky and perishable agricultural commodities, medicinal plants have a higher value per unit volume, which makes them particularly attractive for remote, mountainous areas with transport limitations.

The state government’s enabling policies include (a) popularising the idea of cultivation of medicinal plants among farmers;

  • (b) providing technical support and training; (c) establishing nurseries to propagate and supply planting material; and
  • (d) streamlining the process of registering farmers as growers of medicinal plants.
  • These policies have been in place for the last five years. However, our research shows their impact has been small and little cultivation is actually taking place in the state (Alam and Belt 2004). Some of the reasons for the limited success of the p olicies are:
  • (a) Technological constraints: The domestication of high altitude medicinal plants has proven to be difficult, as it requires a specific kind of soil, climate and moisture conditions and interaction with other species. Various research institutes in Uttarakhand are working on identifying suitable planting material, efficient cultivation practices and post-harvest management techniques. However, the small technological and financial resources of these institutes are inadequate for the fulfilment of these goals. Weak linkages with farmers and the industry have further limited the outreach and impact of their work.
  • (b) Regulative constraints: Understandably, the state government is keen to ensure that plants collected from the wild are not sold as cultivated material; growers and traders, therefore, need a permit from the state government for the cultivation and/or trade of protected species. In the past, this used to be a cumbersome procedure, as a number of government agencies were involved with the registration process, leading to considerable delays and difficulties. The procedures have been streamlined during the last two years, and the number of farmers registered as growers of medicinal plants has increased. Currently more than 6,000 farmers are registered in the state as growers of medicinal plants. The procedural complexities and delays are no longer important constraints.
  • (c) Economic constraints: Long gestation periods, low yields and low prices are important economic constraints in the cultivation of medicinal plants. Most farmers are poor and therefore reluctant to take the risk of investing in unfamiliar crops. Further, many medicinal plants can be harvested only after three years or more, particularly at high altitude. For poor farmers it is a great sacrifice to wait this long for returns. The tendency is either to convert a small area or to use distant plots (which are often neglected) for growing medicinal plants. The size of plots on which medicinal plants are cultivated ranges between 0.05 and
  • 0.10 acre. As the expected benefits of growing medicinal plants on a small area are limited, the farmers lack the motivation to look after the plantation.

    (d) Supply chain constraints: The informal nature of the m edicinal plant sector is one of the central problems faced by farmers wishing to cultivate these plants. The domestic industry sources the material through a myriad of wholesalers and traders, many of whom belong to the informal sector. The companies choose their suppliers merely on the basis of price and attach no value to traceability or sustainability within their procurement policies. Furthermore, the low cost of collection from the wild, both legal and illegal, puts a downward pressure on market prices. Moreover, in many wholesale markets there are only a handful of traders, and evidence suggests that they collude to fix low prices (Virdi 2004). The farmers feel that the prices do not compensate for the difficulties and uncertainties of cultivation.

    Considering these constraints, it is clear that the cultivation of medicinal plants requires a multifaceted approach. The following section of the paper describes how this is being attempted in a project to promote the cultivation and export of kutki (picrorhiza kurrooa) by small-scale farmers in Uttarkashi district. Through close collaboration between actors from public, private and civil society sectors, the farmers are being provided with a secure market outlet, attractive prices, and technical and regulatory support to establish a sustainable supply chain.

    3 Sustainable Supply Chain

    Kutki is a high altitude perennial herb that grows between 2,500 and 4,600 metres. Its many medicinal uses include treatment of influenza, diarrhoea, jaundice and cirrhosis. It is also considered to be a valuable bitter tonic. The selection of kutki as a pilot crop was made for a number of reasons. First, it can be cultivated on poor quality land where other crops do not grow. This would enable farmers to increase their income without unduly affecting their existing crops. Second, there is a significant market demand for kutki from producers of both allopathic and traditional medicine. India is the main supplier on the global market, exporting around 100 MT/year, while domestic consumption is around 300 MT/year. Finally, kutki is listed in CITES-Appendix II (Convention on International Trade in Endangered Species of Wild Fauna and Flora) and the Indian Red List of endangered species. This puts serious restrictions on the trade of non-cultivated and non-traceable kutki obtained from the wild. It is therefore likely that fully traceable, officially registered, cultivated kutki would fetch a large price premium, especially in developed countries where restrictions on the trade of listed species are strictly adhered to. In fact, it is largely this factor that has attracted a Dutch firm to support the project and commit itself to purchase the kutki at a premium price for a minimum of five years.

    The project involves 50 farmers in two villages, Sukhi Top and Jaspur, located at an altitude of 2,700 metres, at about 200 km distance from the state capital Dehradun (an 11-hour drive along the Ganges river). Sukhi Top, located on the main road, has 136 inhabitants in 23 households. Jaspur has 77 inhabitants in 14 households, and is located at a distance of one kilometre from the main road. The socio-economic profile of the villagers and their livelihood strategies are examined later in the paper.

    The project involves a number of actors. These include the farmers

    – represented by two growers’ groups – the buyer Ayurveda Health (The Netherlands); KIT Royal Tropical Institute (Amsterdam) and Centre for Sustainable Development (Mussoorie). Ayurvedic

    march 7, 2009 vol xliv no 10


    Health is a Dutch company that has been importing ayurvedic herbs from southern India for a number of years. It distributes these in Europe to chemists, pharmacies, health shops and therapists. Through the project the company intends to broaden its supply base to northern India, where conditions for growing high altitude medicinal plant species are favour-

    Table 1: Size of Landholding (% of households)

    able. Ayurveda Health is particularly inter-Village Up to 1 Acre 1.1 to 2.5 Acre More than 2.5 Acre and aged. A significant number of families ested in procuring CITES-listed medicinal Jaspur 14 50 36 were also engaged in trade with Tibet, sellplants that are cultivated and traded in a Sukhi 13 61 26 ing grain, clothes and metal goods in return

    Total 14 56 30

    fully traceable supply chain. This is reflected for salt and wool.

    Source: Village survey by the authors in 2006.

    in the attractive conditions with which the company has agreed to purchase kutki (and other species at a later stage) from farmers. These include: a purchase guarantee for all kutki produced during the first five years; a farm gate price which is almost twice the domestic farm gate price and an additional 20% price premium to set up a community fund for social projects in the villages. The company can afford to pay these prices because it expects to gain an important advantage in the European market, as it will be the only supplier of traceable kutki. Furthermore, as the cost of raw material accounts for only 2% of the cost price of the end product, the high price paid by the company will not affect its returns significantly.

    The Centre for Sustainable Development (CSD) and KIT are responsible for designing and monitoring the kutki supply chain. They jointly facilitated the business partnership and mobilised the required inputs and services, such as planting materials, technical assistance and certification from the Herbal Research Development Institute and the forest department. Furthermore, they provide research inputs and examine the impact of the project on various actors, particularly the farmers. They also hope to contribute to poverty alleviation and sustainable development and generate knowledge about the workings of publicprivate partnerships.

    The expected benefits of the project include:

  • (a) Fifty farmers in Jaspur and Sukhi Top villages will have a secure and profitable market for their kutki; this will encourage other farmers to grow kutki and other medicinal plant species;
  • (b) The two village communities will benefit from the social fund;
  • (c) The villagers will be less inclined to collect kutki from the wild, leading to its conservation;
  • (d) The buyer, Ayurveda Health, will have a secure supply of high quality cultivated kutki from a fully traceable source;
  • (e) The exporter, Himalayan Organics, has a secure export market enabling it to operate as a socially and environmentally responsible enterprise;
  • The next section describes the socio-economic condition of the two villages, and the relevance of kutki cultivation for the farming systems and livelihood strategies of farmers in these villages. This section is largely based on a survey conducted by the authors during 2006.

    4 Five Decades of Change

    The inhabitants of Jaspur and Sukhi Top have gone through profound changes in their livelihood situation during the last five decades. Until the late 1960s a majority of the villagers were agro-pastoralists. While the men looked after livestock, which

    was the main source of income, women farmed to supplement their household incomes. During the summer men would pasture their goats and sheep on the meadows and in the forests, and in the winter migrate to grazing areas in the foothills. The women stayed in the villages for the most part of the year, cultivating food crops and taking care of the children

    The trade with Tibet ceased after the 1962 Indo-China war. Moreover, the forest department began to impose serious restrictions on grazing of livestock, due to concerns about rapid deforestation in the mountain areas. Access to forest pastures could still be obtained through permits, but the number of permits was restricted. This forced the villagers to look for new sources of income beyond animal husbandry.

    Agriculture and horticulture are increasingly playing a major role in bridging the income gap caused by the declining importance of animal husbandry and trade. As is common in mountainous areas, farming is carried out on small terraced fields, most of which are scattered over large distances. The majority of the villagers are small landholders. The average landholding is

    2.3 acres; only 30% of the households own more than 2.5 acres (Table 1). The area has no irrigation facilities, and rain-fed farming is practised by all farmers.

    Agriculture accounts for 38% of total income in the villages (Table 2). Farming is particularly important in Jaspur where it accounts for half of the total household income. This is followed by horticulture (apple orchards) which provides 31% of the total

    Table 2: Importance of Income Sources (% of Average Household Income)

    Village Agriculture Horticulture Wages Business Livestock Other

    Jaspur 51 10 20 11 8

    Sukhi Top 33 41 13 10 3

    Total 38 31 15 10 5

    Source: Village survey by the authors in 2006. Table 3:Importance of Crops (% of Cultivated Land)

    Village Apple Potato Rajma Chaulai Vegetables for Market Medicinal Plants

    Jaspur 21 34 28 13 1

    Sukhi 44 30 15 10 0

    Total 36 32 20 11 1

    Source: Village survey by the authors in 2006. Table 4: Importance of Cash Crops (% of total sales)

    Village Potato Apple Rajma Chaulai Vegetables Medicinal Plants

    Jaspur 45 31 9

    14 2

    Sukhi 30 13 0

    56 1

    Total 34 18 2

    45 1

    Source: Village survey by the authors in 2006.

    income. The third most important source of income is “daily wages” earned by villagers by working for each other or for public agencies such as the forest and public works departments. Livestock accounts for only 5% of the total income.

    Agriculture in both villages is focused on cash crops, notably potatoes, rajma (red kidney beans), chaulai (amaranthus) and apple (Tables 3 and 4). Grains and other staple food crops are purchased from markets in the foothills, especially in Rishikesh.

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    Remarkably, the villagers continue to maintain strong links with the markets and depend on them for most of their food supplies and other needs. This is clearly a continuation of the times when the inhabitants were largely traders and pastoralists and bought their food and other provisions from the markets in the plain. While the village economy changed radically in a few decades, substituting farm production for trade and livestock, the farming system did not go through

    Table 5: Most Profitable Crops (Net profit)

    a stage of food self-suffi- Crops Rupees/Acre

    ciency. The villagers con-Apple 1,17,942

    tinue to maintain market Vegetables 53,526

    Rajma 36,586

    integration as an underly-

    Potato 28,050

    ing livelihood strategy,

    Source: Village survey by the authors in 2006.

    producing cash crops to

    sell in the markets and Table 6: Distribution of Households According to Number of Apple Trees (%)

    buying staple foodstuffs

    Village None 1 to 50 51 to 100 More than 100

    in return.

    Jaspur 36 7 36 21

    As shown in Table 5, ap-

    Sukhi Top 0 17 35 48

    ple is the most important

    Total 13 14 35 38 and profitable cash crop Source: Village survey by the authors in 2006.

    in the two villages. Taken

    Table 7: Age of the Apple Orchards (% of Trees)

    together, 87% of all house-

    Village Before 1991 1991-95 1996-2000 2001-05 2006

    holds have apple orchards,

    Jaspur 25 3 48 24 0

    covering 36% of the culti-

    Sukhi Top 27 16 11 43 4

    vated land. It is particu-

    Total 26 13 20 38 3 larly important in Sukhi Source: Village survey by the authors in 2006. Top where all the house-

    Table 8:Distribution of Households According

    holds have these orchards.

    to Yearly Income (in %, Rs 1,000)

    Their role is less important Village 10 or Less 10.1-25 25.1-50 More than 50

    in Jaspur, where more Jaspur 21 50 21 7 Sukhi 0 35 43 22

    than one-third of the vil-

    Total 8 41 35 16

    lagers (36%) do not have

    Source: Village survey by the authors in 2006.

    apple orchards (Table 6). Also, the average size of apple orchards is larger in Sukhi Top than in Jaspur: 0.90 acre (146 trees) compared to 0.54 acre (74 trees). The importance of apple production as a source of income is likely to increase in the near future. This is because many of the apple orchards are of recent origin and have yet to bear fruit. As shown in Table 7, 41% of the apple trees were planted after 2000 and will begin full production in about 2010. Once these trees start giving fruit fully, the importance of apple as a source of income will increase considerably. This is particularly true for Sukhi Top, where almost half the trees were planted after 2000. Also, considering the relatively high profitability of apple orchards, it is likely that the average income in these villages will increase significantly in the near future.

    As the livelihood strategies of both villages are market oriented, it is not surprising that, in spite of the long distances and poor roads and communication infrastructure, the system to market farm produce is relatively well developed. The farming system caters to market demand, and villagers have the well developed skills required to operate in markets. These skills include: acquiring market information; grading of the product; acquiring working capital; hiring trucks for transport; direct selling in the wholesale market. The villagers say that they have no serious marketing problems.

    To illustrate the above, we discuss the marketing practices for the main cash crops, potatoes and apples. Potatoes are sold largely in wholesale markets in Uttarkashi, Dehradun and Delhi. The villagers normally sell around 80% of the potatoes they produce, keeping the remainder for themselves. Usually a group of four to five farmers hire a truck to transport potatoes and sell collectively. They grade the potatoes before loading the truck. One farmer goes with the truck to sell in the wholesale market through a commission agent who charges around 4% . Often the commission agent provides an advance payment to cover expenses for weddings, sickness, the purchase of seed and the hire of trucks. While there is no legal obligation on the part of the farmers to sell through the same agent, the general tendency is to maintain a long-term relationship with one dealer/commission agent as this facilitates access to credit. Also, as all commission agents charge the same rate of commission, there is no economic incentive to change agents.

    Apples are sold in two ways. Poorer farmers with small orchards sell to contractors from towns in the plains, such as Saharanpur. The larger farmers with bigger orchards prefer to sell directly in wholesale markets through commission agents. They grade and pack the apples and also organise transportation. The capital needed for packaging and transport is often provided by the commission agent on interest. The average annual income in the two villages is slightly more than Rs 47,000 (Table 9). However, there are important differences between households: 41% of households survive on less than half of the average income. Only six households (16%) had a yearly income of more than Rs 50,000 and five of these were in Sukhi Top (Table 8). The average income in Jaspur is almost 25% lower than in Sukhi Top. Considering the average household size of 5.7 persons, the daily budget per person in the two villages is around Rs 23 (approximately 60 US cents). Taking into account the monetary value of products saved for household consumption, we estimate that the daily budget per person is around Rs 40 (about 95 US cents).

    A large number of households reported that their income was not adequate to cover their expenditure. The gap between income and expenditure was particularly wide in Sukhi Top:

    Table 9: Income/Expenditure Balance (Rupees/year)

    Village Total Average
    Income Expenditure Balance Income Expenditure Balance
    Jaspur 4,98,150 5,16,185 -18,035 35,582 36,870 -1,288
    Sukhi Top 10,90,125 12,62,190 -172,065 47,397 54,878 -7,481
    Jaspur and Sukhi 15,88,275 17,78,375 -190,100 42,926 48,064 -5,138

    the average household expenditure was Rs 54,878 against an average income of Rs 47,397 which implies an annual incomeexpenditure gap of 16% (Table 9). As a consequence many households take loans to meet their expenditure: 62% of the households in these villages were in debt (Table 10). The proportion of indebted households was especially high in Jaspur with 79%, though the loans they take are only one-

    Table 10: Degree of Indebtedness

    fifth of the average loans in Village Total Amount % of Average of Loan Villagers Amount of Sukhi Top. The average loan (Rs) with Loans Loan (Rs)

    taken by households in the Jaspur 1,77,000 79 16,091

    two villages together was Sukhi 9,75,000 52 81,250 Total 11,52,000 62 50,087

    slightly more than Rs 50,000.

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    The intensity of debt is particularly high in Sukhi Top where loans amount to 170% of the yearly incomes of households. The comparative figure for Jaspur was 45%.

    5 The Niche for Kutki

    The income/expenditure data clearly show that the villagers need to increase their income to balance the household budget. At present one of the main ways this is done is through the collection of medicinal plants from the wild. As it is illegal, this source of income is not disclosed by villagers and is not included in our survey. However, informal conversations with them suggest that at least one-quarter of the households, notably the poorest, are engaged in the collection of medicinal plants from the wild. Informants say that during one harvest season an experienced collector can gather up to 150 kg of kutki and five kg of atish. Considering that local traders pay about Rs 150 and Rs 2,000 per kg of kutki and atish respectively, the collectors can earn a sizeable income from the collection of medicinal plants. This represents about one-quarter of the total income of the poorer households in these villages.

    It is hoped that the cultivation of medicinal plants will provide villagers with a more sustainable way to bridge the income gap. As kutki is being cultivated either on fallow land or inter-cropped with apple, the income from it is seen by farmers as an addition to their current farm income. For this reason they are prepared to accept relatively low returns from kutki. According to our study, farmers expect an average income of Rs 19,094/acre, which is equivalent to 68% of their income from potatoes or 16% of their earnings from one acre of apple. This suggests that if the cultivation of kutki as an intercrop or on neglected land is successful, farmers will accept it in spite of comparatively low returns. It is, however, important to note that given the complex and comparatively limited market for herbs, the cultivation of kutki cannot be expected to become a large-scale activity and compete with other crops. Furthermore, as income from apple increases, the farmers’ interest in cultivating kutki is likely to decline.

    6 Performance of the Project

    The project started in 2002 with preliminary research by KIT and CSD and initial contacts with the Dutch buyer. In 2005 the farmers were selected, buying contracts between the farmers groups, Himalayan Organics and Ayurvedic Health were signed, and kutki was planted. It was expected that the crop would be harvested during 2007, but for a number of reasons the first harvest was delayed. Only after the technical and commercial feasibility of kutki cultivation is fully established will the project be up-scaled to include more farmers and be diversified to include more products. The main reason for the delay in obtaining the first harvest is the high mortality suffered during the first two years of the project. The following reasons have been responsible for this:

    – Poor quality of planting material. In spite of the state government’s claim to the contrary, it is difficult to obtain good quality planting material in Uttarakhand. The project procured kutki cuttings from two sources: a research institute, reputed to have expertise in the propagation and cultivation of kutki, and the state forest department, which has a number of nurseries set up

    Economic & Political Weekly

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    to propagate planting material of important species of medicinal plants. The planting material supplied by both these sources was of poor quality and led to high mortality during the first year. This caused a certain degree of disappointment and loss of motivation among the farmers.

  • Small size of cultivation. The average size of the kutki plantation is less than 150 square metres. This reduces incentive among the farmers to look after the plants.
  • Lack of irrigation.
  • Farmers are more interested in receiving subsidies and other benefits from external agencies such as the state government and its departments and non-governmental organisations (NGOs). Some of the farmers planted kutki hoping to receive additional benefits from the project. They were not seriously interested in the cultivation of kutki and other medicinal plants.
  • Learning from the experience, a special effort has been made to procure better quality planting material. This has led to a considerable decline in the mortality rate, leading to increased motivation among the farmers. Furthermore, pipes have been provided to farmers (at 50% of the cost) to irrigate the kutki fields. This is expected to reduce mortality further.

    It is expected that with the benefit of experience gained during the last three years, the performance of the project will improve considerably.

    7 Conclusions

    The study shows that the cultivation of medicinal plants can play an important role in the livelihood strategies of the villagers in Jaspur and Sukhi Top (and many other high altitude villages in Uttarakhand). As all households in the area have farm land, the cultivation of kutki can benefit most households in these villages. Further, as many of the villagers are engaged in illegal extraction of kutki, its cultivation can contribute directly to the conservation of biodiversity. At the same time, it is clear that the success of cultivation will largely depend on the returns from kutki, compared to other crops. The situation is complex, as the comparative returns from various crops can change over time, and alter the incentives. In fact, this is already happening in these villages as the income from apple orchards is increasing fast. However, for poor farmers who do not have the option of increasing their income through apple orchards the cultivation of kutki and other medicinal plants can still be an effective strategy. Our data confirms that cultivation of medicinal plants is a viable option to improve the livelihoods of poor farmers and thereby curtail the incentives to collect from the wild.

    It must, however, be pointed out that, compared to other agricultural products, the global market for most medicinal plants (including kutki) is small and could be saturated by the production of a small number of farmers. The potential of the cultivation of kutki and other medicinal plants as a widespread source of livelihood may therefore not be as high as usually assumed.

    The study shows that, in order to be successful, efforts to cultivate medicinal plants depend on a number of factors. The most important of these are:

    (1) Choice of medicinal plants with a large market potential: It is important to promote the cultivation of those medicinal plants


    which can receive a premium in the market. The species which are listed in CITES are an obvious choice for this reason. As things stand, by and large it is the consumers in developed countries who are prepared to pay a premium for products which are environmentally friendly and not associated with depletion of scarce bio-resources from the wild. At the same time these markets require documented traceability, i e, information about the product’s origin and the conditions under which it is produced. Efforts to support the cultivation of medicinal plants should take these requirements into account from the outset. At present these conditions do not apply to the Indian domestic market. Nevertheless, considering a rapidly rising purchasing power and increasing concerns for health and sustainability, efforts should be made to identify consumer segments in the domestic market with a demand for traceable, certified products.

    (2) Choice of a suitable area with favourable agro-ecological conditions and relatively low levels of economic development: For successful domestication medicinal plants require specific microclimatic and ecological conditions, which are often difficult to duplicate in farmers’ fields. Failure to create these conditions makes it difficult for farmers to cultivate medicinal plants. Research needs to be carried out to understand and replicate favourable agro-ecological conditions conducive to the cultivation of important medicinal plants.

    As medicinal plants compete with other crops (and other sources of income), their cultivation is more likely to be successful in areas where incomes are low. As economic activities and incomes can change over a period of time, it is important that a long-term and dynamic view of economic activities is taken when an area is chosen for the promotion of medicinal plants. The importance of this is clearly shown by the emergence of apple orchards as an important source of income in the villages under consideration. This has lowered the attraction of kutki as a source of income.

  • (3) Identifying a buyer who can guarantee to purchase the whole production at a premium for at least the entire gestation period: The cultivation of medicinal plants is a risky activity, returns from which can only be expected after at least three years. In fact, our experience shows that it can take even longer than three years before the first harvest is obtained. The farmers will be willing to take this risk only if they are certain of a guaranteed market at a price which will provide higher profit than other crops.
  • (4) A consistent, long-term commitment from supporting agencies to support the farmers through the entire gestation period and the first years of marketing.
  • (5) Coordination with public agencies to ensure access to highquality planting material and official registration as growers of medicinal plants.
  • The role of the partnership facilitator is often neglected in public policies. There are few policy instruments that support the work of the facilitator in selecting appropriate business partners, bringing them together in a business agreement and assisting them in the pilot stage of chain development (which in our case has taken five years). Rather than providing production subsidies, which distort the market, government policy should focus on supporting the pilot stages of chain development, so that private parties can find each other and set up viable business ventures. Such an approach will be likely to reconcile business interests with environmental protection and pro-poor growth.


    Alam, Ghayur and John Belt (2004): “Medicinal Plants Sector in Uttaranchal: Findings of a Recent Study” in Ghayur Alam and John Belt (ed.), Searching Synergy: Stakeholder Views on Developing a Sustainable Medicinal Plant Chain in Uttaranchal – India, Bulletin, 359 (Amsterdam, The Netherlands: KIT Publishers).

    Government of India (2000): “Report of the Task Force on Conservation and Sustainable Use of Medicinal Plants” (New Delhi: Planning Commission).

    Government of Uttaranchal (2002): “Marketing of Medicinal Plants: Status and Action Plan”, Horticulture and Rural Development Department, Government of Uttaranchal, Dehradun.

    Maikhuri, R K, K S Rao and R L Semwal (2001): “Changing Scenario of Himalayan Agro-ecosystems: Loss of Agrobiodiversity, an Indicator of Environ mental Change in Central Himalaya”,

    The Environmentalist, 21: 23-39.

    Virdi, Malika (2004): “Wild Plants as Resource: New Opportunities or Last Resort? Some Dimensions of the Collection, Cultivation and Trade of Medicinal Plants in the Gori Basin” in G Alam and J Belt (ed.), Searching Synergy: Stakeholder Views on Developing a Sustainable Medicinal Plant Chain in Uttaranchal, India, KIT Bulletin 359 (Amsterdam, The Netherlands: KIT Publishers).

    Review of Industry and Management September 27, 2008 Trends and Perspectives on Corporate Mergers in Contemporary India – P L Beena Foreign Ownership and Subsidiary Performance – Pradeep K Ray, Sunil Venaik Mergers and Impact on Operating Performance – Pramod Mantravadi, A Vidyadhar Reddy Concentration-Markup Relationship in Indian Manufacturing Sector – Pulak Mishra MOU and Appraisal of the Public Sector – R Venkatesan Academic Rigour and Entrepreneurship – Abhijit Bhattacharya For copies write to Circulation Manager Economic and Political Weekly 320-321, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013. email:

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