The growing global demand for medicinal and aromatic plants could help drive Nepal's green economy, while improving livelihoods in its poorest communities, according to a new study released by the United Nations Environment Programme (UNEP) in collaboration with the Government of Nepal.
The report, BioTrade: Harnessing the potential for transitioning to a green economy - The Case of Medicinal and Aromatic Plants in Nepal, analyzes the country's BioTrade sector and, specifically, its trade in Medicinal and Aromatic Plants (MAPs), which are often grown in the country's poorest regions.
Nepal is home to about 700 species of medicinal plants, about 250 of which are endemic to the country. This vast haven of biodiversity presents opportunities in commodity BioTrade (essential oils and plants extracts, natural ingredients for cosmetics and pharmaceutical products, native fruits for juice, wine and jam), trade in goods (bamboo products, gums and resins, spices and flavours, dyes and tans, natural pesticides, wild mushrooms and health foods), and services (ecotourism).
Today, more than 100 types of MAPs are harvested in Nepal and traded in international markets. In 2008, the recorded value of the exported MAPs was around USD 3 million, and by 2009, it had increased to USD 9.8 million.
"The growing global demand for natural and environmentally-friendly products today, speaks of the vast potential of BioTrade to contribute to the strengthening of the country's economy and rural livelihoods," said Lal Mani Joshi, Secretary of Nepal's Ministry of Commerce and Supplies.
Given Nepal's high degree of biodiversity, the study confirmed the country's significant potential to develop its BioTrade sector. The study focuses on the cultivation, processing and trade of high-value MAPs, which are found in the forests and grasslands of the mountains in the northern part of the country.
"By harvesting these plants sustainably, and improving their value-added activity so collectors receive a fair share of the profits, the trade could contribute to social equity, environmental conservation and economic prosperity," said UNEP Programme Officer Asad Naqvi, who oversaw the study.
However, the report also cites the challenges of developing a sustainable trade in MAPs, including the lack of value-added activity and quality control mechanisms. MAPs are currently sold through long marketing channels with high transaction costs and most of the value-added processes in the production chain occur outside of Nepal.
In addition, inadequate infrastructure, such as limited access to electricity, transportation facilities, water and technology, results in a lack of productive capacity and hampers developing the trade in MAPs.
The report makes several recommendations to assist policymakers, development agencies and entrepreneurs in developing the country's BioTrade in MAPs in a responsible and sustainable manner.
For example, the report cites a need for:
- An inventory system, with regular updating, to provide much needed information on the stock of available resources and how much can be sustainably harvested.
- Appropriate technologies for transforming Nepali raw materials into value-added products.
- Well-equipped laboratories to test plants and products in order to meet sanitary and phytosanitary measures (SPS) requirements and provide easy access to lucrative international markets.
- Implementation of appropriate policies that facilitate adequate incentives for entrepreneurs to promote and encourage formal trade in MAPs.
The study is part of Capacity Building for BioTrade (CBBT) project, which is implemented by UNEP with financial support from GIZ, and has conducted similar studies in Namibia and Peru.
The International Centre for Integrated Mountain Development (ICIMOD), the Ministry of Commerce and Supplies, the Ministry of Environment, the Ministry of Forestry and Soil Conservation, and National Planning Commission of Nepal also contributed to this study.