The potential of medicinal plant cultivation as an endogenous development strategy -A study based in Chitwan District, Nepal-

Author: Adina Roxana Munteanu First Supervisor: William Critchley Second Supervisor: Jetske Bouma Local Supervisor: Dharma Raj Dangol

Illustration on the cover: Some medicinal plants popular amongst cultivators, from left to right Aloe vera ; Ocicum sanctum , Matricaria chamomilla , Cymbopogon citratus.

Title: The potential of medicinal plant cultivation as an endogenous development strategy -A study based in Chitwan District, Nepal- Keywords: medicinal plant cultivation, Nepal, development

A thesis submitted for the master degree in “Environment and Resource Management” at Vrieje Universiteit Amsterdam; Faculty of Life and Earth Sciences, De Boelelaan 1085-1087 1081 HV Amsterdam. July 2010

Dedicated to: my mother, who taught me to appreciate every stage in life & my grandmother, who hardwired the love for land in my soul

i Acknowledgements

Writing this thesis gave me the opportunity to visit Nepal, an experience that I treasure and that made me a better researcher but also a better person. Many people helped me to succeed in writing this paper, and I would like to thank them as I could never have done any of this, without their support and encouragement. First, I would like to thank my advisor, William Critchley for his optimist tone and continuous support. Thank you for being such an inspiration and for giving me courage to start this research. If I do take the academic path, I only hope that I can be half the teacher and advisor that you have been to me. I would also like to thank Sabina Di Prima , for all the hard work on the field and the valuable advice. You endured the Chitwan heat to help me learn and give me confidence that I can do a good research, and for that I am be indebted to you. Thank you for being, for a few days, my Didi . I want to express my gratitude towards Dharma Raj Dangol, the local supervisor for his continuous support on the field. Thank you for receiving me as a student in your university, for helping me build a network of people that helped me with my research. Thank you for your patience and readiness to help every time. Many thanks to all the other professors and university staff that helped me during my stay in Chitwan, you made my stay enjoyable. I would also like to express my thanks to Jetske Bouma, my second advisor, for providing me with invaluable advice and comments on my research. I’ve also been fortunate to find group of great friends in Chitwan. They are the students who helped me with primary data gathering and translation: Kiran Baral, Dipak Bhattarai, Deepak Raj Joshi, Ananta Subedi and Roshan Subedi. Not only you helped me overcome the language barrier, worked with me since sunrise till after sunset, travelled with me until there was no road anymore but you also taught me about the culture and the Nepali way. Moreover, I am deeply grateful for the kindness and willingness to help of all the people I interviewed for my research. Some farmers like Shyam Hada, Nawaraj Adhhikari, Dambar Gurung, Komal Sapkota, Manoj Chaudhary gave me a deep understanding of the local context for which I am truly grateful. Many thanks to all my un-named teachers from Chitwan. Finally, I would like to thank my dear friend and fiancé, Alex Lefter for the continuous support during the entire process of writing this thesis. You gave me the strength to succeed. Thank you! There are many more people that contributed to this journey and research. Thank you all, and I hope this paper will prove that I deserved your support!

ii Preface This report is the final thesis for the “Environment and Resource Management” master programme at Vrieje Universiteit Amsterdam. The research was conducted between April 15 th and June 15 th 2010 in Chitwan District, Nepal. The report was completed in the Netherlands in July 2010. The research was carried out under the supervision of William Critchley and Sabina di Prima from CIS-VU. Jetske Bouma, from IVM, was the second supervisor. Dharma Raj Dangol, associate professor at Institute of Agriculture and Animal Science of Tribhuvan University, Rampur, was responsible with external supervision. Although the main purpose of this report is to obtain a master degree, it is hoped that the research per se has value as well. Parts of this report will be distributed to all the parties that solicited information such as farmers, NGOs, and government agencies. Photographs used in this report were taken by the researcher if not stated otherwise. Permission to quote and use the data was requested and received from all the people that mentioned in the report.

iii Executive Summary

In Nepal, medicinal and aromatic plants collecting and trade are centuries-old businesses and they provide people from rural areas with an important source of income (Olsen & Helles 1997). Therefore, medicinal plant cultivation, as an alternative to wild harvest, can provide income while at the same time helping the conservation efforts. In the scientific literature, there is very little mention of medicinal plant cultivation as a source of income. Moreover, no studies on medicinal plant cultivation in the study area were found. Therefore, the field of medicinal plants cultivation in Nepal was identified as a research gap. This study aims to fill this research gap by gathering information on medicinal plant cultivation and cultivators and by assessing to what extent this activity can lead to development. The study area was shaped by the fact that Rampur, Chitwan District was the starting point of all travelling and by the transportation facilities. Due to the lack of good roads, poor bus schedules, most of the time the only reliable means of transportation was the motorbike. Out of the 37 village development committees in Chitwan District, only 11 are represented in the sample: Bachhayauli, Dibyanagar, Fulbari, Gunjanagar, Jagatpur, Korak, Kalyanpur, Mangalpur, Meghauli, Saradanagar, and Shaktikhor. Primary data was collected between 15 th of May and 13 th of June 2010 in Chitwan and Ghorka Districts. Data was gathered from individual farmers that cultivate medicinal plants, community forest user groups, cooperatives and private companies but also from those that do not cultivate medicinal plants. According to the medicinal plants cultivators, having a good network of other cultivators is important for gathering information on cultivation practices and market. Most of the farmers have less than five years of experience in this activity which proves that this activity quite new in Chitwan District. Moreover, taking into account the cooperatives and the CFUGs that just started cultivation, medicinal plants cultivation seems to be a rapidly expanding activity. However, only farmers that are part of a network seem to be able to increase the cultivation area in time. The main driver for starting medicinal plants cultivation is income generation followed at a certain distance by the healing properties of the plants. The necessary investment per katha /season is mostly less than Rs 3,000 for an individual farmer. However, the income generated by this activity cannot sustain the household. On average the contribution of medicinal plants cultivation is 37% of the household income, and most households rely on at least one more source of income other than medicinal plants. Moreover, the fact that no farmer relies exclusively on the income generated by the medicinal plants and that most of the farmers start with a small area is proof those farmers are risk averse and that they need confirmation of the viability of an activity before investing. Only companies have the financial power to process medicinal plants and therefore they get a higher share of profit. For most cultivators the most important problem is the market, due to the unbalanced supply and demand, which results in fluctuating prices and the lack of transparency of information on the market. Considering the findings from the non-cultivators survey, traditional knowledge of medicinal plants is a relatively unimportant factor in the decision to start cultivation of medicinal plants. Income is the main driver of starting this activity followed by the understanding of the importance of medicinal plants. Moreover,

iv people that are willing to start this new activity realize that they need trainings, market knowledge, and approximately Rs 3,000 as the initial investment. The main product of the conducted research is presented in chapter seven, in the form of a project based on the endogenous development framework and the previously presented findings and analysis. The reasons for creating such a project are the recognition of the potential of medicinal plants cultivation as a income generating activity but also a conservation opportunity. From a donor’s perspective, an agency such as Compass that is willing to follow the endogenous development approach, this type of project creates the opportunity to involve people and put them in charge of their own development. The aims of the project are to promote small-scale community-based cultivation; as processing and medicinal plant marketing relieve pressure from wild sources but also to introduce best practices for wild medicinal plant collection and sustainable collection levels. The main objectives of this project are improving livelihoods, conserving and improve local knowledge and practice, preserve the medicinal plants species, and advocate for an enabling environment with the policy makers. In the next paragraphs, all these objectives are elaborated on.

v List of abbreviations

CFUG(s) community forest user group(s) CVIL Crystal Vision International Limited DADO District Agriculture Development Office DoF Department of Forests Ecoscentre Ecological Services Centre FORWARD Forum for Rural Welfare and Agricultural Reform for Development FUG Forest User Group GEF Global Environmental Facility IAAS Institute of Agricultural and Animal Science IC IOMD International Centre for Integrated Mountain Development INGO (s) International Non -Governmental Organization (s) MAP (s) Medicinal and Aromatic Plant (s) MLD Ministry of Local Development MPC Medicinal Plants Cultivation NGO (s) Non -Governmental Organization (s) NTFP(s) Non -Timber Forest Product(s) Rs Rupee VDC Village Development Committee VU Amsterdam Vrije Univestiteit Amsterdam SWAN Social Welfare Association of Nepal SECARD Nepal Society for Environment Conservation and Agricultural Research and Development Nepal

vi Glossary Bigha - unit of land area (1.5 bigha = 1 ha) Cultivator - a farmer that intends or that is involved in the cultivation of medicinal plants. Endogenous development - development based mainly, though not exclusively, on locally available resources, local knowledge, culture and leadership, with the openness to integrate traditional as well as outside knowledge and practices. It has mechanisms for local learning and experimenting, building local economies and retention of benefits in the local area. Farmer - any person that owns land and practices agriculture. Indigenous or local knowledge - knowledge generated, used and developed by people in a certain area. It is not limited to indigenous peoples and can include knowledge originating from elsewhere that has been internalized by local people through local processes of learning, testing and adaptation. It forms the basis of the art of identifying, combining, unfolding and protecting local resources. It is rooted in and stems from local practices, hence it is specific to the local context and often gender specific. Katha - unit of land area (20 katha = 1 bigha )

vii Contents

Contents

Chapter 1: Introduction ...... 4 1.1. Medicinal Plants ...... 4 Health Benefits of Medicinal Plants ...... 4 1.2 Problem Statement ...... 6 1.3. Research Question ...... 6 1.4 Limitations ...... 7 1.5 Thesis Outline ...... 8 Chapter 2: Background ...... 9 2.1. Recent History ...... 9 2.2. Economy of Nepal ...... 10 2.3. Cultural Aspects ...... 10 Chapter 3: Theoretical Framework ...... 12 Chapter 4: Methodology ...... 16 4.1 Description of Study Area ...... 16 4.2. Data Collection ...... 17 4.2.1 Primary Data Collection ...... 18 4.2.2 Secondary Data Collection ...... 19 4.3 Data Analysis ...... 19 4.4 Ethical Considerations ...... 20 Chapter 5: Findings ...... 21 5.1. Medicinal Plants Cultivation ...... 21 5.2. Community Forest User Groups ...... 26 Gyaneshwor Community Forest ...... 27 Baghmara Buffer Zone Community Forest ...... 27 Jankauli Buffer Zone Community Forest ...... 27 Mangaledevi Community Forest ...... 28 Satyadevi Community Forest...... 28 5.3 Cooperatives ...... 29 Praja Cooperative ...... 29 Swyabhiman Cooperative ...... 29 Prasiddi Cooperative ...... 30 Fulbari Cooperative ...... 30 Balgum Women Group ...... 30

Page 1 of 60 Contents

5.4. Individual Cultivators ...... 31 5.5. Non-cultivators ...... 38 Chapter 6: Analysis and Discussions ...... 43 6.1. Cultivator Profile ...... 43 6.2. Business Profile...... 45 Brief Market Analysis ...... 45 SWOT Analysis...... 46 Chapter 7: Recommendations for Project Design ...... 48 Objectives...... 48 Target ...... 49 Implementation ...... 50 8. Conclusions ...... 54 Suggestions for further research ...... 54 References ...... 56 Bibliography ...... 59

Page 2 of 60 Contents

List of Tables Table 1 The 12 leading countries of import and export of MAP material classified as pharmaceutical plants in order of average trade volume for the period of 1991-2003...... 5 Table 2 Matrix ranking exercise with the Fulbari group ...... 22 Table 3 Matrix ranking exercise with the Prasiddi cooperative group ...... 23 Table 4 Matrix ranking exercise with the healers group ...... 25 Table 5 Matrix ranking exercise with Crystal Nepal group ...... 26 Table 6 Stated criteria for choosing the species to cultivate ...... 41 Table 7 Correlation matrix for the explaining variables ...... 43 Table 8 SWOT Analysis of the business of medicinal plants cultivation ...... 47 Table 9 The stakeholders in MPC and their stakes ...... 52

List of Figures Figure 1 Activities in supporting endogenous development ...... 13 Figure 2 Location of Chitwan District in Nepal ...... 16 Figure 3 Location of data collection sites in Chitwan District ...... 17 Figure 4 Age/sex distribution of the cultivators ...... 31 Figure 5 Ethnicity of the medicinal plant cultivators...... 31 Figure 6 Size of the personal network of cultivators ...... 32 Figure 7 No of grown plants in homegarden...... 33 Figure 8 Individual farmers initial investment in medicinal plant cultivation (Rupees) ...... 34 Figure 9 Percent of total income generated through medicinal plant cultivation ...... 35 Figure 10 The number of additional sources of income, other than medicinal plants cultivation ...... 36 Figure 11 Sources of income, other than medicinal plants cultivation ...... 36 Figure 12 Age/sex distribution of non-cultivators ...... 38 Figure 13 Ethnicity of non-cultivators ...... 39 Figure 14 No of plants grown in the homegarden ...... 39 Figure 15 Reasons for starting the cultivation of medicinal plants ...... 40 Figure 16 Perceived needs for the start of commercial cultivation of medicinal plants ...... 40 Figure 17 Willingness to invest in medicinal plant cultivation per katha ...... 41 Figure 18 Reasons for not starting medicinal plant cultivation...... 42

List of Annexes Annex 1: Medicinal Plants Annex 2: Survey Data Annex 3: Focus Groups Transcripts

Page 3 of 60

Chapter 1: Introduction

This chapter starts by presenting some general things about medicinal plants. The second subchapter is dedicated to the problem statement and the following to the research question that this study tries to answer. Subchapter 1.4 shortly presents the limitations of the research process while the last subchapter presents the outline of this study.

1.1. Medicinal Plants

This subchapter presents generalities about the health benefits of medicinal plants followed by some information on the world market of medicinal plants parts and some of the projects that aim to conserve medicinal plants species worldwide. Health Benefits of Medicinal Plants Out of the 422,000 plant species documented worldwide, around 12.5% are reported to have medicinal value (Rao et al 2004). The World Health Organisation estimates that almost 80% of the population of developing countries still use traditional medicine derived from plants for treating human diseases (de Silva, 1997). Nepal is ranked ninth among the Asian countries for its floral wealth as more than 9,000 species of flowering plants are estimated to exist on its territory. Among the total flora of Nepal about 10% of species are reported to have medicinal and aromatic properties (Bhattarai & Ghimire; 2006). In Nepal, about 85% of the population relies on the herbal remedies (Dani 1986). According to Rao et al (2004), about 25% of the drugs in modern pharmacopoeia are derived from plants and many others are synthetic analogues built on prototype compounds isolated from plants. Since Nepal is a region with a significant number of medicinal plant species, this potential should be exploited by creating an opportunity for people to improve their livelihoods. Several studies (Dobriyal et al., 1997; Lacuna-Richman, 2002; Bussmann et al., 2007) documented the use of medicinal plants as alternative source of income for underprivileged communities. Medicinal and Aromatic Plants Trade The tendency to use medicinal plants is expected to raise globally, both in allopathic and herbal or traditional medicine (FAO, 1994). The causes for this upward trend are population dynamics, increasing popularity for ‘natural-based, environmentally friendly products’, increasing trend towards self-medication, renewed interest of companies in isolating useful compounds from plants, and marketing strategies by the companies dealing in herbal medicine are some of the other contributory factors enlisted by Lewington (1993). As many related botanical products sold as health foods, food supplements, herbal teas, and for various other purposes related to health and personal care, trade in medicinal plants is likely to continue to expand. Currently, about 100 species of medicinal and aromatic plants (MAPs) from Nepal are internationally traded. More than 95% of the roughly estimated export volume of 10,000-15,000 tons per year is harvested from wild populations (Amarya, 2000). Most of the trade is in raw materials (barks, leaves, tubers, roots, and fruits) and less in semi-processed products such as essential oils (Olsen and Bhattarai, 2005). MAPs are gathered by rural harvesters in forests and then sold along usually well-established marketing chains to the cities on the plains (Olsen and Bhattarai, 2005). As large quantities of MAPs are traded in developing countries, much of this is unrecorded in official statistics or poorly documented resulting in typically little awareness among decision-makers of the significance of the trade to the healthcare and economies of their

Page 4 of 60 Contents people, or about problems of unsustainability and the harmful impacts of wild collection on natural habitats (Hamilton, 2004). One of the main sources of MAP trade data is the United Nations Statistics Division, New York. Since 1962 this institution has been compiling foreign trade figures of almost 180 countries nowadays in the COMTRADE (=commodity trade statistics) database. The goods are classified according to the internationally agreed Standard International Trade Classification (SITC). For the purpose of this study we are interested in the 292.4 ‘Plants and parts of plants ( including seeds and fruits) of a kind used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not cut, crushed or powdered .’. Unfortunately, only authorized members have access to the COMTRADE database, and for the exemplification of the trade statistics, the literature review was the only available source. Table 1 The 12 leading countries of import and export of MAP material classified as pharmaceutical plants in order of average trade volume for the period of 1991-2003. Country of Quantity Value (USD) Country of Quantity Value (USD) import (tonnes) Export (tonnes) Hong Kong 59,950 263,484,200 China 150,600 266,038,500 USA 51,200 139,379,500 Hong Kong 55,000 201,021,200 Japan 46,450 131,031,500 India 40,400 61,665,500 Germany 44,750 104,457,200 Mexico 37,600 14,257,500 Rep. Korea 33,500 49,889,200 Germany 15,100 68,243,200 France 21,800 51,975,000 USA 13,050 104,572,000 China 12,550 41,602,800 Egypt 11,800 13,476,000 Italy 11,950 43,006,600 Bulgaria 10,300 14,355,500 Pakistan 10,650 9,813,800 Chile 9,850 26,352,000 Spain 9,850 27,648,300 Morocco 8,500 13,685,400 UK 7,950 29,551,000 Albania 8,050 11,693,300 Malaysia 7,050 38,685,400 Singapore 7,950 54,620,700 Total 320,550 930,524,400 Total 368,100 847,980,800 Source: Lange (2006) quoting COMTRADE database, United Nation Statistics Division, New York Lange (2006) analyzed the foreign-trade statistics of 110 countries of the commodity pharmaceutical plants (HS 1211 or SITC.3 292.4, respectively) for the period 1991-2003 and drew several conclusions. First, the trade in pharmaceutical plants is dominated by only few countries as the first 12 countries make up ca 80% of both the exports to and the imports of the world market. Secondly, the major markets are in the developed countries, while the bulk of the botanicals are exported from developing countries. Finally, source countries export mainly raw plant material, often of wild origin; the benefit for it is relatively low. The processing, i.e. the value-adding takes mainly place in consumer countries and trade centres. Moreover, the same study of Lange (2006) warns about the lacks of statistics in the MAP trade. He argues that knowledge of the features of the (international) trade in botanicals is essential for assessing the trade’s impact on the plant populations concerned and required for conservation concepts and measures that have to meet future supply and the provisions of species conservation. Increasing pressure on wild plant resources creates the need for serious conservation efforts including development of cultivation techniques. Lewington (1993) mentions that serious over-exploitation of many medicinal plants has already occurred. Moreover, conservation of medicinal plants is receiving increased attention in view of resurgence of interest in herbal medicines for health care all across the globe (Franz, 1993; Gupta et al., 1998).

Page 5 of 60 Contents

Medicinal Plants Conservation Projects Institutions such as The World Bank, United Nations Development Program (UNDP), Global Environment Facility (GEF), and International Centre for Integrated Mountain Development (ICIMOD) have programs that aim to preserve medicinal plants species and indigenous knowledge on them. The aims of these types of projects are related to species conservation, sustainable resource management, indigenous knowledge of the medicinal plants preservation, improvement of livelihood for local people. On example of a project is ‘The Medicinal Plants Conservation Project’ supported by UNDP, GEF and Egyptian Environmental Affairs Agency. Launched in January 2003, the project aims to eliminate the root causes of biodiversity loss and the threats to the conservation and sustainable use of wild medicinal plants in Egypt and St Katharine Protectorate. This project aims to promote the economic values of medicinal and aromatic plants to provide the motivation for conservation management and at the same time facilitating the development of a national policy and legislative framework. Moreover, in 2005 in India, UNDP initiated the ‘Conservation of Medicinal Plants and Traditional Knowledge for Enhancing Health and Livelihood Security’ project that is implemented in nine states. The major goals of this project include biodiversity conservation, revitalization of local health traditions, generation of rural livelihoods and South-South cooperation. The project aims to mainstream conservation strategies for medicinal plants and application of local health traditions into existing programmes of the forestry and health sectors. By 2007, an operational manual for sustainable management of medicinal plants designed for state governments has been developed, while the identification of medicinal plant conservation areas and traditional herbal medicinal knowledge registers are in progress. In addition, the ‘Cultivation of sage and other medicinal plants’, implemented in Albania by GEF and the Farmers’ Association of Shkrel, aims to decrease the pressure on natural populations of medicinal plants by wild collection through cooperative cultivation of medicinal plants. Finally, ICIMOD manages the Medicinal and Aromatic Plants Program in Asia which has as main objective to improve resource conservation and livelihood security in rural and marginalized communities through strengthening the linkages between stakeholders within the MAPs production to consumption chain. Under this project, since 2006, the Ethno Botanical Society of Nepal has implemented projects on medicinal plant inventory, identification of hotspots and community based conservation strategies.

1.2 Problem Statement

In Nepal, medicinal and aromatic plants collecting and trade are centuries-old businesses and they provide people from rural areas with an important source of income (Olsen & Helles 1997). Therefore, medicinal plant cultivation, as an alternative to wild harvest, can provide income while at the same time helping the conservation efforts. In the scientific literature, there is very little mention of medicinal plant cultivation as a source of income. Moreover, no studies on medicinal plant cultivation in the study area were found. Therefore, the field of medicinal plants cultivation in Nepal was identified as a research gap. This study aims to fill this research gap by gathering information on medicinal plant cultivation and cultivators and by assessing to what extent this activity can lead to development.

1.3. Research Question

The main question that this study tries to answer is ‘To what extent could medicinal plants cultivation be an endogenous development strategy in Chitwan district, Nepal?’

Page 6 of 60 Contents

In order to provide an answer the main question stated above, the following issues were investigated: Is medicinal plants cultivation a rare or common phenomenon? Who are the main actors on the medicinal plants market in Chitwan? Which species of medicinal plants are cultivated in Chitwan area? How much income does the cultivation of medicinal plants generate for Chitwan farmers? Is medicinal plants cultivation the main activity or just an extra source of cash for the farmer? Are the farmers growing what the market demands? How many people could be involved in a programme based on medicinal plant cultivation? How much could medicinal plant cultivation contribute to the household income? The number of medicinal and aromatic plants species used in Chitwan area is significant, however, this study will mention only those species that are commercially cultivated. Moreover, although the knowledge of uses of medicinal plants is essential for the understanding of the importance of these plants, this area is not part of the current research due to its complexity and size.

1.4 Limitations

Time and Resources Constraints The time allocated for the fieldwork was 9 weeks, since April 15 th to June 15 th 2010. Because the local context did not allow for agroforestry research, which was the initial idea for the research, 3 weeks were spent designing a new research topic and work plan, further limiting the time for actual data gathering. Moreover, during the months of May and June local students had their exams and were not available as translators, which resulted in a new cause for delay of primary data gathering. This research was entirely funded by the researcher and therefore the budget was limited to a few hundreds of euro, out of which the travelling costs represented more than half. Language The official language in Nepal is Nepali and therefore the process of primary data collection was done with the help of translators. Five translators were employed in the process, with differences in quality of their English and understanding of the research topic. Overall, I feel confident that the data gathering process was not affected by the different capabilities of the translators, as triangulation of information was a constant objective in all the interviews and focus groups. However, although the translators were specifically instructed to translate just what the researcher and interviewee were saying, at times they had to give supplementary information to the interviewee and therefore the researcher cannot guarantee that the answers given were not influenced but the translator or that some information got lost or distorted. Climate Chitwan has a subtropical climate. The months of April, May and June are the hottest of the year. During this period, the average minimum temperature is around 26 degrees Celsius while the maximum reaches usually 35 degrees Celsius. However, due to the humidity, the perceived temperature is higher. Therefore, the climate had a clear impact on the schedule of research. During the morning and late afternoon farmers were not available to talk as they were busy working in the field. Transportation The infrastructure in Nepal is poor as most of the roads are not paved and busses do not have reliable schedules. This lead to significant loss of time while travelling. For the purpose of data gathering the motorcycle was the most used means of transport as it saved time, but it was also the most expensive one.

Page 7 of 60 Contents

Due to poor infrastructure, the researcher was unable to reach five Community forest user groups in Korak Village Development Committee (VDC), in the hill area of Chitwan District. According to the District Forest Office (DFO) officer, these communities can be reached only after a six hours of walking, as there are no roads that motorcycle can use. Electricity and Internet Access Nepal relies mostly on hydropower and due to limited capacities and growing electricity demand; the electricity supply is not continuous. During the dry season, the electricity is limited to a few hours a day – four to five hours with electricity with five to six hours gaps in between. Internet is available only when there is power, but the speed limited to 50 kb/sec, which lead to delays in gathering information when using the internet.

1.5 Thesis Outline

Chapter two presents some background information meant to help the reader understand the context of the location where the research took place. The information intends to give information that also is needed in order to grasp the context of the recommendations in the last pages of this report by presenting a short recent history of Nepal and making a sketching the economic profile of the country. Chapter three reviews the literature on development and describes the theoretical framework adopted in this study. There are many ways of defining ‘endogenous development’ and this section will give the complete definition that the analysis chapter will work with. Chapter four presents the methodology that was employed during the processes of data collection and data analysis. This section gives details on how the research project took place and describes the types of gathered data. Chapter five present the findings of the research. The first subchapter is dedicated to the information on medicinal plant cultivation through focus group discussions. In addition, the second and third subchapters are dedicated a particular type of medicinal plant cultivators, community forest user groups and cooperatives. Moreover, the forth subchapter is about the individual cultivators while the last one is dedicated to non- cultivators. Chapter six, analysis and discussions creates the profile of a medicinal plants cultivator as it results from the findings presented in the previous chapter and also tries to sketch the profile of the medicinal plants cultivation business. Chapter seven presets the sketch of a theoretical project conserving medicinal plants cultivation for the purpose of income generation that could be designed keeping in mind the theoretical framework descried in chapter three. This chapter also includes the recommendation of the researcher when designing such a project. Finally, chapter eight contains the conclusions, including suggestions for future research.

Page 8 of 60

Chapter 2: Background

In order to provide some background information on this research, this section supplies the reader with information on the country were the research took place. The below information is meant to help the reader to grasp the context of the research and study area. Nepal, officially the Federal Democratic Republic of Nepal, is a 26.4 million people 1, landlocked country in South Asia. Bordered by China in the North and India in the East, South, and West, Nepal is very diverse in terms of both its geography, ranging from the Himalayan mountain range in the North to wide grasslands in the South. Moreover, the demographics are as diverse as the landscape as Nepal is the home to dozens of languages, with Nepali being used as lingua franca. Hinduism is the religion of 80% of the population, while Buddhism is the second most important belief, being practiced by about 11% of the country’s population. Nepal is dividend, from an administrative point of view in 75 districts. Each district is further divided in village development committees (VDCs) which are the lower administrative part of Ministry of Local Development (MLD). A VDC is further divided into wards, the number depending on the population of the district, but the average number is nine wards. According to the MLD website 2, the purpose of village development committees is to organise village people structurally at a local level and creating a partnership between the community and the public sector for improved service delivery system.

2.1. Recent History

According to the CIA world fact book 3, in 1951, the Nepalese monarch ended the century-old system of rule by hereditary premiers and instituted a cabinet system of government. Reforms in 1990 established a multiparty democracy within the framework of a constitutional monarchy. Six years later, an insurgency led by Maoist extremists broke out. The ensuing ten-year civil war between insurgents and government forces witnessed the dissolution of the cabinet and parliament and assumption of absolute power by the king. According to the same source, several weeks of mass protests in April 2006 followed by months of peace negotiations between the Maoists and government officials, culminated in a peace accord and the promulgation of an interim constitution, in November 2006. Following a nation-wide election in April 2008, the newly formed Constituent Assembly declared Nepal a federal democratic republic and abolished the monarchy at its first meeting the following month. The Constituent Assembly elected the country's first president in July. The Maoists, who received a plurality of votes in the Constituent Assembly election, formed a coalition government in August 2008, but resigned in May 2009 after the president overruled a decision to fire the chief of the army staff. In May 2010, the researcher witnessed a six days nation-wide strike called by the Maoist party that asked for the demission of the current government. According to the New York Times 4, Maoist leaders gave up the protests after a rally of approximately 20,000 professionals in the capital that called for an end to the strike and for the progress in the nation’s stalemated peace process.

1 2007 data from Central Bureau of Statistics http://www.cbs.gov.np/ 2 http://mld.gov.np/eng/ 3 https://www.cia.gov/library/publications/the-world-factbook/geos/np.html 4 http://www.nytimes.com/2010/05/08/world/asia/08nepal.html

Page 9 of 60 Chapter 2: Background

2.2. Economy of Nepal

According to the World Bank statistics 5, Nepal is occupies the 193 rd position in 2009, with a gross national income (GNI) per capita of 1,180 USD, calculated using purchasing power parity model. According to this model, Nepal is one of the least developed countries of the world having a lower than average level of GNI per capita. Moreover, according to the National Planning Commission (2007) around 31% of the population is below the poverty line. Nepal relies heavily on foreign aid. According to Library of Congress 6, Japan is Nepal’s largest bilateral aid donor, while the World Bank and Asian Development Bank are the largest multilateral donors. The expected the ratio of total foreign aid to gross domestic production 2009/10 to reach 6.05% (National Planning Commission, 2007). According to the National Planning Commission (2007), agriculture accounts for about 33% of GDP. While most of the population is employed in agriculture, the sector rests mostly on crops grown in the Terai region such as tea, rice, corn, wheat, sugarcane, and root crops. Industrial activity, which constitutes around 8% of GDP, mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain, while the services sector is closely tied with the tourism industry. The latter has been growing in recent years, although it is a small sector, just 1.4% of GDP, due to the political tensions. Over the past 15 years from 1991, remittances became a big factor in supporting both the local economy and people’s livelihood, rreaching 12.03% of GDP percent in July 2005 (Gaudel, 2006). The first example of remittances came from the Gurkha soldiers who serve in the Indian and British armies. More recently, Nepali citizens move to India, the Gulf countries and Malaysia in search of work (Gaudel, 2006). According to the data on website of the Central Bureau of Statistics 7, in terms of its relationships with the exterior, the country has close ties with India, which accounts for about half of both imports and exports. In 2007, Nepal had a trade deficit of approximately 1billion US dollars, with exports mainly consisting of carpets, clothing, leather goods, jute goods, and grain. Main imported goods include gold, machinery and equipment, petroleum products and fertilizer. Nepal has considerable potential for development through tourism, hydropower, and agriculture. However, poor infrastructure and political instability have been hampered investment, both domestic and foreign.

2.3. Cultural Aspects

A thorough analysis of Nepal’s ethnic groups is complicated due to the sensitive nature of ethnic and linguistic identity. Moreover, the few studies on the subject do not use the same terminology (Gurung, 1996). Ethnicity, in the broadest sense of the word, refers to the national origin. In Nepal the classification of ethnic groups is much more complex. Following the territorial unification of the country in 1789, the government created national caste systems that stipulated a place for each of those groups (Levine, 1987). Today’s ethnic mix represents the way people created their identities based on the language they speak, national origin, region, language, religion, and caste system. In the 2001 population census 8, there are 103

5 http://siteresources.worldbank.org/datastatistics/resources/gnipc.pdf 6 http://lcweb2.loc.gov/frd/cs/profiles/Nepal.pdf 7 Foreign Trade and Balance of Payments 1997/98 -2006/07, CBS 8 Population Distribution by Cast/Ethnic Groups and Sex for Nepal, 2001, CBS

Page 10 of 60 Chapter 2: Background ethnic and caste categories as declared by the respondents. The government acknowledges, however, that these categories are provisional and arbitrary. Such a diverse ethnic mix means also great language diversity. Nepal’s 2001 population census 9 listed 92 languages spoken as mother tongues, and an uncertain number of languages were categorized as ‘unknown.’ Nepali is the most common mother tongue, spoken by 48.6% of the population and the most common second language.

9 Population Distribution by Mother Tongue and Sex for Nepal, 2001; CBS

Page 11 of 60

Chapter 3: Theoretical Framework

In the scientific literature, the concept of ‘development’ is used in a number of ways as each author focuses on different aspects. This section will present a short literature review on the topic of endogenous development, which is the particular instance of development that this study is concerned with. A classic view on economic development is that the rate of growth of gross domestic product (GDP) is the expression of economic development (Lucas, 1988). The correlation between income level and rate of growth: the poorest countries have the lowest growth, the wealthier the next and the middle-income countries (developing) the highest. Based on the neoclassical framework of Solow-Denison, Lucas (1988) develops a system of differentiated equations that model the economic behaviour based on a series of assumptions on population growth, physical and human capital, trade, and migration of the labour force. Although the solution of the model imitates some of the main features of economic behaviour, the model does not incorporate the fact there is no growth pattern, which all economies follow. Maillat (1998) makes the distinction between development ‘from above’ and development ‘from below’ or bottom up. The first is based on a priori existence of a form of growth that is disseminated according to a process of spatial division of labour from motor regions towards the peripheral regions while the latter implies no redistribution of growth from strong regions; shifting the focus from redistribution to resource creation. For Maillat (1998) a theory of endogenous development or constructed development, should explain how a region could generate wealth through a creation process using specific resources. For Maillat (1998), endogenous development is the interaction between innovative milieu, localized productive system, and urban system. Ray (1999) reflects on the meaning of development seeking an alternative to the dominant model in which economic expansion, job creation, and trade competitiveness. For him the principle of endogeneity means local ownership and sense of choice in how to employ those resources. He brings the concept of endogenous development in a western context, of local agency operating by local interests while addressing direct relationships between local territories and the extra local institutions in the context of globalisation. Compas 10 , an international network that implements development programmes, tests and improves endogenous development methodologies, has a different definition of this concept that includes both economic and social aspects. According to Haverkort et al (2003), e ndogenous development is understood as based mainly, but not exclusively, on locally available resources (such as land, water, vegetation, knowledge, skills and competencies, culture, leadership and the way people have organised themselves). Moreover, endogenous development integrates both traditional and outside knowledge, the latter as complementary to the first. Another characteristic of endogenous development is the mechanisms for local learning and experimenting, building local economies and retention of benefits in the local area. The main actors in endogenous development are the locals with their own self-determined traditional organisations and leaders but also more recent civil organisations. Finally, e ndogenous development does not imply isolation as it may use some opportunities provided by globalisation. In the following paragraphs, the Compas framework of endogenous development is presented. All of the paragraphs below are based on the Haverkort et al (2003). This framework was chosen because of its multidisciplinary approach. The researcher considered that this framework was suitable because it included the most important perspectives of development: social, economical and cultural.

10 www.compasnet.org

Page 12 of 60 Chapter 3: Theoretical framework

In the chapter seven, this framework of endogenous development will be applied to the activity of medicinal plant cultivation as researched in the field and a project based on this activity will be sketched. In this chapter the researcher will argue the potential of medicinal plant cultivation as an endogenous development strategy in Chitwan District, Nepal. The Compas framework distinguishes six different types of resources: natural resources (land, ecosystem, climate, plants animals); human resources (knowledge and skills, local concepts, ways of learning, teaching and experimenting); produced or human-made resources (buildings, infrastructure and equipment); economic-financial resources (markets, incomes, ownerships, price relations, credit); economic-financial resources (markets, incomes, ownerships, price relations, credit); social resources (family, ethnic organisations, social institutions and leadership); cultural resources (beliefs, norms, values, festivals and rituals, art, language, lifestyle); Figure one represents the main concepts of the Compas framework: the local use of resources and key aspects of supporting endogenous development. The latter shall be explained in the next paragraphs.

Figure 1 Activities in supporting endogenous development

Source – Haverkort et al (2003) page 32

1. Building on locally felt needs Local values differ from those used by national governments or international development agencies and therefore the general goals for endogenous development vary. These goals may be poverty reduction, diminished ecological exploitation, increased equity and justice, or cultural and spiritual goals. On the other hand, variables such as sex, social position or age influence the definition of the needs.

Page 13 of 60 Chapter 3: Theoretical framework

2. Improving and complementing local knowledge and practices The aims of endogenous development are revitalising, enhancing, and complementing in-situ development of indigenous knowledge and practices. Although local knowledge has its limitations, intra-cultural learning, and dialogues can improve it. 3. Increasing local control and enhancing the dynamics of local knowledge Local control and decision-making, based on the local mechanisms to take decisions within the local context, are main goals of endogenous development. Therefore, traditional authorities play an important in managing internal power conflicts, balancing gender issues and providing leadership. Subcultures, defined by differences in gender, class, caste, ethnic subgroups, age, geographic origin, religious affiliation, language, education, wealth and power inevitably lead to different needs and objectives, may pose a challenge to these authorities. 4. Identifying development niches in the local and regional economy Endogenous development promotes the initiatives based on the specific ecological and cultural characteristics of each locality that can generate additional income or contribute to well-being, as understood by local people. Moreover, these initiatives should tap local opportunities by stimulating the production, processing and marketing of region-specific products. The process of identifying and creating market possibilities for local products on the regional, national or even the international market is crucial. 5. Selective use of external resources Sometimes local knowledge and resources have their limitations, therefore combining them with specific external inputs can improve their potential. Some external inputs are in the form of specific product but also loan facilities, advisors, teachers, different production processes. However, the decision to use these external sources should consider the local alternatives, the sustainability of external resources, the possibilities for reproducing and maintaining external resources and the risks involved. 6. Retention of benefits in the local area Sometimes, the external development initiatives aimed at profits taken away the benefits from the community. Indifferent to what is the development situations, either production and processing of local food, village- based tourism, employment creation for the rural youth, each opportunities to keep the benefits of new economic activities in the local area need to be explored. 7. Exchange and learning between cultures and religions The exchange of experiences and worldviews between rural people, farmers, field staff, managers, and researchers can lead to fruitful cross-cultural exchange, learning, and cooperation. 8. Learning and capacity building Learning is not a neutral transfer of data; it involves conceptual frameworks that are related to worldviews and values. Any external knowledge transfer should be made considering the biases of western culture and the local values and worldviews. 9. Networking and strategic partnerships Synergies and partnerships at regional, national, and international processes can support endogenous development. Such activities are: linking NGOs with similar agendas, creating strategic alliances between relevant government agencies at local, regional and national level, participation in international forums, co-

Page 14 of 60 Chapter 3: Theoretical framework opting funding bodies in projects, advocating for policy changes or research programmes, and building up partnerships with commercial, political or religious organisations. 10. Understanding forms of knowing, learning and experimenting In international cooperation the understanding of the basic concepts of the various indigenous knowledge forms is important. Traditional forms of knowledge are based on different paradigms than those in the western culture. These differences in theories, models, typologies, concepts and problem definitions manifest themselves in everyday life as well as and in the philosophy of science. Medicinal plants cultivation is a subject that could be investigated from different perspectives. For example, from an ethno-botanical perspective, the research would focus on the indigenous knowledge of the uses of the plants. Moreover, from an anthropological point of view a researcher would be interested in the indigenous knowledge aspects while from an economic perspective the focus would be on the income generation potential of this activity. The main reason for choosing the above defined concept of endogenous development as a working framework is because the researcher has an economics background. Another consequence of this fact is the focus of the study on the economic aspects of endogenous development such as building on locally felt needs, identifying development niches in the local and regional economy, selective use of external resources and retention of benefits in the local area. Moreover, aspects such as learning and capacity building, understanding forms of knowing, learning and experimenting, exchange and learning between cultures and religions are investigated but not on a full scale as the researcher does not have all the necessary social sciences information. This paper tries to prove that using the endogenous development as a starting point, a program based on medicinal plants cultivation has the prerequisites of success because it is an activity based on local resources, uses local knowledge, is part of the local culture an requires minimum external inputs. In the analysis chapter we will return to this topic.

Page 15 of 60

Chapter 4: Methodology

This chapter describes the methodology applied in this study. The first subchapter describes the study area while the second one gives details about the data collection and data analysis processes. The last subchapter presents some ethical considerations.

4.1 Description of Study Area

The research area is Chitwan District, one of the 75 districts of Nepal. The main reason for choosing Chitwan district as the study area is the fact that The Institute of Agricultural and Animal Science (IAAS), part of Tribbhuan University, hosted the researcher. Therefore, Rampur, where IAAS is located, became the headquarters of the researcher and the starting point of the research process. The Chitwan Valley lies in the Inner Terai region which is mainly flat area surrounded by hills. During the early 1950s, almost two thirds of the forest area was cleared with the purpose of eradicating malaria. However, in 1953, after the floods and landslides in the hill area, this USAID supported programme gained a new dimension. The government encouraged migration of the hills populations towards Terai area, where the land they cleared and cultivated became their property in time (Shrestha et al 1993). The major flux of emigrants was from neighboring districts such as Ghorka, Dhading, Tanahu, Kaski, Lamjung and Baglung (Barber et al, 1997). The ethnic mix in Chitwan is made up by the indigenous population, the Tharus, Darai, Bote and Kumal and several hill populations such as Gurung, Tamang, Magar, Limbu, Rai, Thakali Chepang, Chetri and Bahun (Ghimire and Bhat, 2003; Barber et al, 1997). Chitwan District, located in the central part of Nepal, as figure two shows, is part of the low-lying Terai Area.

Figure 2 Location of Chitwan District in Nepal

Page 16 of 60 Chapter 4: Methodology

The district’s administrative centre is in Bharatpur, the seventh largest city of Nepal with a population of 117,162 11 . Bharatpur is a commercial and service centre of central south Nepal and major destination for higher education, healthcare, and transportation of the region. Smaller centres are Sauraha, a village with many tourist facilities and Meghauli, which used to be have good tourist revenues that ceased when the regional airport was closed. According to the District Agriculture Development Office (DADO) statistics 12 , there are 463 register cooperatives in Chitwan District, out of which 31 are for agriculture, 15 for vegetable farming, 9 for beekeeping and 3 for fish farming. The rest are not related to any type of agricultural practice. The study area was shaped by the fact that Rampur was the starting point of all travelling and by the transportation facilities. Due to the lack of good roads, poor bus schedules, most of the time the only reliable means of transportation was the motorbike. In figure three, the green dots represent the locations of primary data collection, more precisely the location of all the taken interviews. Out of the 37 VDC in Chitwan District, only 11 are represented in the sample: Bachhayauli, Dibyanagar, Fulbari, Gunjanagar, Jagatpur, Korak, Kalyanpur, Mangalpur, Meghauli, Saradanagar, and Shaktikhor. As the arrows indicate, the Satrasaya and Korak locations are a little outside the current map. Moreover, Satrasaya is outside the Chitwan, in Ghorka District. Figure 3 Location of data collection sites in Chitwan District

4.2. Data Collection

In order to answer the research question mentioned in the introduction of this study (subchapter 1.3), both a literature review and fieldwork were necessary. The initial literature review helped to refine the research question and to organise the primary data collection process.

11 2005 data from the census, Central Bureau of Statistics 12 District Agriculture Development Office publication

Page 17 of 60 Chapter 4: Methodology

The consulted literature mainly consists of articles from international and peer-reviewed journals. However, for the design of the surveys, the researcher used information from various national publications available at the IAAS library and mentioned in the Bibliography. 4.2.1 Primary Data Collection Primary data was collected between 15 th of May and 13 th of June 2010 in Chitwan and Ghorka Districts. The data collection process is based on participatory methods and techniques such as semi structures interview, group discussions, informal meetings, and observations. These methods were chose because they are relevant for this type of research, mainly because initially there was very little information about the status quo of medicinal plant cultivation in the study area. The fieldwork started with the identification of farmers and community forest user groups that cultivate medicinal plants. The local supervisor, Dharma Raj Dangol, provided the names of two farmers and two communities forest user groups that cultivate medicinal plants. The snowball technique was applied to find out the rest of the farmers and CFUGs that are part in this study. Some of the farmers were able to provide contacts of others that cultivate medicinal plants commercially. However, the difficulty in applying the snowball techniques was the fact that in Nepal there are hardly addresses in the form of street number and postal code. When farmers did not own a mobile phone, it was quite difficult to find the person. In some cases, the researcher did not succeed in finding the person by using just the name and VDC. There was also a case when only the farmer the researcher was searching for turned out to be deceased. In addition, in order to find CFUGs that cultivate medicinal plants, the researcher inquired at the District Forest Office (DFO) in Bhatapur. The forest officer provided information about seven CFUG that received trainings on cultivation of medicinal plants from DFO. Unfortunately, most of these communities are 6 hours walking distance from any road practicable by motorbike. The main method used for data collection was the semi-structured interviews. Different surveys were designed for cultivator (farmers, CFUGs, cooperatives) and non-cultivators. The semi- structured interviews were designed based on the discussions with key informants and the literature review. The main purpose of the surveys was to give the researcher a chance to elicit the opinions of the interviewees. The researcher was present at all the interviews. When necessary, the order of questions in the questionnaire was adjusted according to the storyline of the respondent. Whenever the time allowed, the researcher asked clarification questions. During the surveys and interviews, people mentioned many medicinal plants. The complete list of the plants mentioned by the farmers can be found in Annex 1. As the research sphere evolved expanding, the surveys provided many answers but also raised many more questions that could have not been anticipated at the initial moment, just from literature review. For the sake of consistency, the researcher kept the same survey but asked the farmers many more questions to clear the picture and improve the storyline. Some of the farmers were eager to show their time farms, so the researcher documented a few transect walks. The main purpose of the transect walks was to learn about the local technology and practices of medicinal plant cultivation. Although these aspects are not the focus of the research, such qualitative data supported a better understanding the context of the research. In total, the researcher did more than a dozen transect walks with farmers. The farmers were generally proud of their field and as they felt comfortable, they spent more time with the researcher. Moreover, they spoke freely and usually gave additional information, unrelated to the semi-structured interview but still relevant for the research. Group discussions were held between 9th and 13 th of June 2010. Two main rationales justify organising focus groups. Triangulation of information was the first motivation. The second reason is that a group can provide

Page 18 of 60 Chapter 4: Methodology rankings that are more reliable and a different kind of information such as history of the group. When it comes to subjective decisions, for example choosing the most profitable medicinal plant, group’s decisions are more reliable than individual ranking mainly because a joint assessment usually includes more information. In the survey for farmers, the individual answers differ as some of the farmers had less or simply different information than others on medicinal plants cultivation. Moreover, a group perspective represents a relative truth as each group operates using different criteria. Although the plants are the same, their utilisation similar, and their cultivation process more or less the same, the process of decision-making is different for each group as different factors and interests drive it. Five local assistants who worked as translators facilitated primary data collection. They were bachelor or master students at IAAS. Because time is a scarce resource, the researcher had to work with several translators. No student could afford to spend the entire period with the researcher on the field as they were during the exam period and then on holidays. Moreover, working with more people helped the research, as different working styles were suited in different situations. The background of the researcher is economics, which means that her experience in conducting interviews and focus groups as a research tool was quite limited. Therefore, she designed short questionnaires short with simple questions. The approach to doing research was ‘learning by doing’ and therefore the quality of the interviews and surveys has a positive dynamic. Since interviewing people is not an exact since, the cross checking of information was an objective throughout the interviews. Whenever three or more respondents gave the same answer, the information is considered correct. 4.2.2 Secondary Data Collection Secondary data was also collected in order to back up or explain some of the findings and results of the primary data analysis. More specifically, the theoretical framework was constructed based on the peer- reviewed articles from journals. The description of the study area is based on both international and Nepalese journals. Local sources of data were NGOs (SECARD 13 , SWAN 14 , FORWARD 15 , ANSAB 16 ) and governmental agencies such as District Agriculture Development Office (DADO), District Forest Office (DFO), Department of Plant Resources (DPR). In order to collect these resources, the researcher scheduled interviews with representatives of these organisations and institutions during the months of May and June 2010. Finally, some of the information presented in this study comes from grey sources like internet sites. Specifically, Annex one is the product of both books mentioned in the Bibliography but also specialised internet sites.

4.3 Data Analysis

The collected data are both qualitative and quantitative in nature. The qualitative data is presented in a narrative way using a thematic approach. Moreover, selected quotes reinforce conclusions or provide illustrative examples. Some of the questions are grouped so that they form a more coherent answer, with more value added.

13 www.secardnepal.org 14 www.swannepal.org 15 www.forwardnepal.org 16 www.ansab.org

Page 19 of 60 Chapter 4: Methodology

Surveys supply several data types, such as categorical, multiple frequencies, ranked data, scaled data, binary variables. Some of the open-ended questions were coded for the purpose of analysis into categorical data. The quantitative data is analysed using some descriptive statics such as frequencies, distributions, and correlation. For each of the analysis performed, the sample was adjusted to include all the valid answers. Event thou sometimes there are less than 30 observations, the analysis is still worthwhile, even though the results can be regarded as highly specific. The Eviews software was used to make a linear regression analysis that tries to explain how the decision to cultivate medicinal plants is influenced by variables such as age of the farmer, sex, family size, owned land area, and level of education. For this purpose, a linear regression model is proposed and then estimated by ordinary least squares (the independent variable estimator is obtained by minimizing the sum of squared distances between the actual data points and the values given by the linear approximation).

4.4 Ethical Considerations

All the respondents grated the permission to be quoted in the final report. The used quotes are not taken out of their original context and are used in the spirit the respondent intended. However, in order to respect their privacy, Annex 2, which presents the surveys data, does not contain the names of the survey respondents. The topic of research did not raise any sensitive issues. The income question was a little difficult in the sense the not many kept records or knew exactly how much they were gaining. The surveyed contained a question about the total income of the household. Even thou in the pretesting of the questionnaire this did not seem to be an issue, during the survey many farmers did not respond to this question, either because they felt uncomfortable or simply because they did not know. Therefore, the researcher adjusted the question, asking about the percentage of total income generated by medicinal plants cultivation. Moreover, the researcher tried to find out whether the income per katha is higher/same/lower than before. During the entire process of surveys, the researcher kept thorough records of field observations. Overall, the researcher is confident that the reported events in this report represent accurately the reality in the field as it was observed.

Page 20 of 60

Chapter 5: Findings

This section presents the findings from the surveys and focus groups. The first subchapter presents the findings that refer to the medicinal plant cultivation according to the farmers and healers, based mostly on the focus group data. The second and third subchapters are dedicated to a special type of medicinal plants cultivators: community forest user groups and cooperatives. The forth subchapter presents the data from the farmer’s surveys while the last subchapter lists the most important findings from the survey dedicated to non-cultivators. As an important note, at the moment of research, in June 2010, the exchange rate was 84 Rupees per one euro.

5.1. Medicinal Plants Cultivation

This subchapter describes the activity of medicinal plants cultivation. The next paragraphs present the data gathered during the focus groups conducted during the period of starting June 9th until 13 th 2010. The four focus groups were organised for the purpose of triangulation of already collected information but also for gathering of new data. The participants of the first group were members of the organic cooperative in Fulbari that has been experimenting with medicinal plant cultivation, but intends to start commercial cultivation this year. The second group was a cooperative established last year that started the plantation process this year and will be able to sell most likely at the beginning of next year. The third group was made of traditional healers, which were certainly the most experienced people when it comes to medicinal plant cultivation – as they had the most knowledge and longest history of cultivation. The last group consisted of farmers affiliated to a company named Crystal Nepal. The reason these groups were chosen is the fact they are representative types of cultivators of medicinal plants in Chitwan. Their experience with medicinal plants cultivation varies from almost none at all to proficient. However, all the groups have less than five years experience in commercial cultivation of medicinal plants. The most relevant information provided by these groups is presented in the following pages. For more details on all the focus group discussions, please check the transcripts in Annex 2. 5.1.1. Fulbari Group The ‘Organic Agricultural Production Cooperative’ in Fulbari is dedicated, as the name states, to organic farming. In 2007, the cooperative started the process of certification for organic agriculture. An agreement to sell organic products exists between the cooperative and One World Alc, company managed by Shyam Hada. Along with vegetables, this company is interested also in medicinal plant cultivation. For this reason, the farmers have been conducting trials in the past four years. The first trial involving black sesame (Sesamum indicum ) failed as the plant does not grow well in the region. After this experiment, farmers became more reluctant to cultivate non-traditional crops. Because Shyam Hada is interested to buy medicinal plants from farmers, he promised that in case the medicinal plant harvest is wasted he will provide compensation until the level of income generated through rice cultivation on an equal land area. During the last four years, a few members of the cooperative have been making shy trials with four medicinal plants. The farmers planted small plots in highland and lowland. This year the cooperative has a nursery with four species: tulsi, kurilo, sugandwal, and amala . During the focus group, the farmers were asked to rank the previously mentioned plants according to criteria they consider relevant. The plants are given a rank from one to four, one being the best according to a

Page 21 of 60 Chapter 5: Findings specified criterion. Table 2 below presents the results of this exercise. The criteria are ordered from most important to least important, as specified by the group. Table 2 Matrix ranking exercise with the Fulbari group Plant Criterion Tulsi Kurilo Sugandwal Amala Easy to grow 2 4 3 1 Drought resistance 3 2 4 1 Marketing possibility 2 2 2 1 Profitability 1 2 2 2 Good for the environmental 1 4 3 2 Health benefits 1 4 3 2 Multiple uses 1 3 4 2 Manure requirement 4 2 3 1 Diseases and insects 1 3 2 4 Access to seed 1 3 2 4 Technical knowledge 1 3 4 2 Time to maturity 1 3 2 4 Storage 1 2 3 4

‘Easy to grow’ refers to the fact that the cultivation process is not complicated meaning that the knowledge involved is not so specialized. Amala is has the best rank because as it is a tree, after being planted it just needs watering from time to time. Kurilo however is much more labour intensive, involving transplantation, constant weeding, and watering. ‘Marketing possibility’ refers to the easiness to sell. Amala received the best rank because it is an appreciated medicinal plant on the local market and at the same time is not extensively cultivated. Tulsi and kurilo are quite popular medicinal plants among the cultivators and their supply is likely to be higher on the market. Due to the preoccupation with organic farming and its benefits, this group is a very environmentally conscious. This is why they chose a ‘good for the environment’ criterion when comparing the plants. According to local knowledge and religious belief, tulsi is considered good for the environment as it releases more oxygen. Tulsi was ranked best under the ‘Access to seeds’ criterion as each farmer can grow the seeds on their own farm. Sugandwa l was ranked second as it can be easily propagated using the roots of the plant. The other two plants received lower ranks because it is more difficult to secure good quality seeds. With ‘technical knowledge’ criterion, the group referred to the knowledge they have acquired through trials. It should be noted that more people have more information about tulsi cultivation as it is traditionally grown and worshiped in every Hindu home. ‘Time to maturity’ refers to the period from planting to harvest and is a very important criterion to keep it mind as it directly affects the profitability of the plant. Tulsi requires the least amount of time, as it can be harvested more or less four mounts after transplantation. Sugandwal requires seven to eight months, while kurilo needs at least two years. The worst rank was give to amala , as it requires around four years before it gives fruits, which are the valuable part of the plant from medicinal point of view Finally, considering the ‘storage’ criterion, the plants that allow for a longer storage time were ranked better.

Page 22 of 60 Chapter 5: Findings

Perceived risks and problems of medicinal plants cultivation The farmers in this group mentioned that the most difficult problems that medicinal plants cultivation raises are the market, storage, and trainings. Considering that the market is the most commonly mentioned problem among the medicinal plants cultivators, this cooperative has the advantage of having an agreement with a company. However, dependency on one buyer is not a very reassuring situation for the group. The farmers heard about farmers that were unable to sell their products even though they were part of Crystal Nepal network. With this experience in mind, the group is planning to search for more buyers when they manage to have a stable production. Storage is the second most important problem because medicinal plants, particularly tulsi in this case, must be dried in shade. The temporary storage problem was the reason why some of the farmers that were initially attracted to medicinal plant cultivation to give up. The president of the cooperative, Chandra Adhikari, insists that farmers should not worry about storage, because Shyam Hada promised to buy the tulsi plants soon after the harvest. The last problem mentioned referred to the lack of trainings on medicinal plant cultivation. This group is particularly aware of the importance of trainings because they had several on organic farming practices. The participants mentioned that they learned about medicinal plants cultivation during two excursions to Shyam Hada’s medicinal plants farm in Ghorka District organised by the cooperative and supported by SECARD 17 . These excursions gave 45 farmers the chance to see how plants are being cultivated and talk to an experienced farmer. Moreover, Shyam Hada visits Fulbari on regular basis and helps with the problems concerning the organic production. 5.1.2. Prasiddi Group A group of farmers from several VDCs initiated the ‘Prasiddi Medicinal Plants Cooperative’ with the purpose of medicinal plant cultivation. This cooperative has an agreement with a company, Aloe Nepal, for the cultivation and selling of ghiukumari (Aloe vera) . During the focus group, the farmers were asked to compare ghiukumari with their traditional crops using criteria they consider relevant. The plants were given a rank from one to four, one being the best according to a specified criterion. Table 3 below presents the results of this exercise. The criteria are ordered from most important to least important, as specified by the group. Table 3 Matrix ranking exercise with the Prasiddi cooperative group Plant Criteri on Rice Maize Wheat Vegetables ghiukumari Daily consumption 1 3 2 1 4 Market possibility 1 3 2 4 5 Profitability 3 5 4 1 2 Seed availability 1 1 1 1 2 Manure requirement 2 3 5 1 4 Type of land 3 1 2 3 4 Labour requirement 3 4 5 1 2 Drought resistant 4 3 1 5 1

17 Local NGO that has several projects dedicated to improving rural livelihood – www.secardnepal.org

Page 23 of 60 Chapter 5: Findings

‘Daily consumption’ refers to the fact that the crop is edible. The ranking indicates that rice and vegetables are the most important crops for the diet of the participants. Maize is cultivated for the purpose of animal feeding, and therefore indirectly contributing to the food production while ghiukumari is ranked last because it cannot be consumed. Vegetables are considered most profitable as they sell easily. However, until now the farmers of the cooperative were using inorganic fertilizers and pesticides for the vegetables, but when they will switch to organic farming (ghiukumari soil must not be contaminated with inorganic substances) vegetables will stop being the most profitable crop. Ghiukumari is ranked second considering the expected benefits. The participants mentioned that they have their own seeds for the crops they grow, and because they had to buy the ghiukumari seedlings they ranked it lowest. According to ‘manure requirement’ criterion vegetables and rice require the lowest manure inputs while ghiukumari and wheat need the highest. Maize received the first ranked for the ‘type of land’ criterion because it can be cultivated in any type of soil while ghiukumari seems to have more specific requirements. Vegetables are ranked fist according to ‘labour intensive’ criterion because they require the least labour inputs. The farmers specified that ghiukumari needs weeding by hand because no tillage is permitted, but on the other hand it needs planting only once in five years, therefore they ranked it second, before rice which is quite an easy crop to cultivate. Maize and wheat are considered to be the most labour intensive crops. The participants appreciated ghiukumari as the most draught resistant crop because it can survive long periods with small amounts of water. On the other hand, rice and vegetables are the most sensitive crops to water inputs. 5.1.3. Healers Group In 2002, the National Trust for Nature Conservation initiated the ‘Biodiversity Conservation Centre’ programme with the purpose of preserving the indigenous knowledge of the traditional healers and the conservation of medicinal plant species. Through this program was founded the ‘Chitwan Tharu Traditional Knowledge and Skill management committee’, an organisation that gathered all the local healers and made them the members of one organisation. With the help of the trust, the healers started to cultivate medicinal plants instead of harvesting them in the wild. A nursery and a clinic for poor people, where the healers provided their services, were also established. As the healers travel around to visit the patients who are unable to travel, it is quite difficult to gather a larger group a focus group discussion. For this reason, only five healers attended this discussion. The group was asked the following question: ‘If you would have the land and financial resources, what plants would you chose to grow? According to which criteria would you chose these plants?’ Table 4 below presents the results of this exercise. The healers chose the plants according to their knowledge and experience and they ranked them one to four, one being the best according to a specified criterion. The criteria are ordered from most important to least important, as specified by the group.

Page 24 of 60 Chapter 5: Findings

Table 4 Matrix ranking exercise with the healers group Plant Criteri on Harro Barro Amala Kurilo Sarpag anda Cures most diseases 2 3 1 4 5 Multipurpose 2 1 3 4 5 Fruits first 3 3 3 1 2 Profitability 2 2 1 3 4 Easy to cultivate 1 1 1 2 3 Grows fast 4 3 5 1 2 Water requirement 1 1 1 3 2 Storage time 2 3 4 1 2 Labour intensive 2 2 2 1 1 Manure requirement 1 1 1 3 2

For this group the most important criteria were ‘cures most diseases’, ‘multipurpose’ and ‘fruits first’ while profitability of the plant occupied the fourth place. The low ranking of profitability is also explained by the fact that the healers do not sell the plants, they produce medicines which most of the time are a combination of plants. The difference between the ‘fruits first’ and ‘grows fast’ criterion is important from a healer’s perspective because different parts of the plants – such as the bark – are used, not just the fruits. The group gave little explanation on the above-mentioned criteria. Although they were happy to share their knowledge on medicinal plants, these people were not use to this type of exercise. The hot weather and time of day were factors that lead to a shorter discussion. 5.1.4. Crystal Nepal Group Crystal Nepal Ltd is a company founded in 2004 with the purpose of medicinal plant cultivation. The company has its own farms where it cultivates herbs but also purchases medicinal plants from individual farmers affiliated to its network. The company offers an initial training on cultivation to the member farmers and a promise to buy the medicinal plants at an agreed price, usually lower than the market price. Crystal Nepal collects and processes the medicinal plants and sells the final packaged products to a different company, Crystal Vision International Limited 18 (CVIL). The latter company does as main business the selling of the finished products through a network marketing scheme. The farmers affiliated to CVIL – meaning they sell the company’s products – get a better price when selling their plants to Crystal Nepal compared to farmers that are not members of the marketing network. The decision making processes is quite interesting in the Crystal Nepal network. The administrative board of the company decides the species to be cultivated and the quantity. Then, the local branches of the company organise meetings with farmers where each chooses what plant he/she can grow and in what quantity. The farmers affiliated to this network have a more homogeneous knowledge on the plants they cultivate, but rarely other knowledge on different plants. During the focus group discussion, the farmers were asked to compare the plants they cultivate according to their own criteria. The group ranked the plants one to four, one being the best according to a specified

18 http://www.crystalvisioniltd.com

Page 25 of 60 Chapter 5: Findings criterion. Table 5 presents the results of the ranking exercise. The criteria are ordered from most important to least important, as specified by the group. Table 5 Matrix ranking exercise with Crystal Nepal group Plant Criterion Tulsi Godt arpe Camomile Lemongrass Health benefits 1 2 3 4 Profitability 2 4 1 3 Easy to cultivate 1 4 3 2 Storage time 1 4 2 3 Water requirement 3 2 4 1 Labour intensive 4 2 3 1 Environmental health 1 4 2 3 Multiple uses 1 4 2 3 Manure input 3 1 4 2 For this group the most important criteria when comparing the plants were ‘health benefits’, ‘profitability’, ‘easy to cultivate’ and ‘storage time’. The farmers mentioned the CVIL logo ‘Health, Wealth and Creativity for Humanity’ and said that this is the reason why they chose ‘healing benefits’ as the most important criterion when comparing the plants. Moreover, the health benefits of tulsi are the most significant because, if taken every day, tulsi prevents 38 types of diseases. Camomile is the most profitable because the essential oil extracted costs almost Rs 30,000/litre (€360/litre) while the flower is worth Rs 600/kg (€7/kg). With a price range between Rs50 to 60/kg, tulsi is the second most profitable plant. Storage time is an important criterion because it directly affects profitability of the plant. The farmers mentioned that they store the tulsi while its market price is low, and when the price recovers, they sell it to the network or elsewhere. The water requirements of the plant can be the limiting criterion for some farmers. The water requirements of the camomile represent the main cause for the small area on which this plant is cultivated at the moment ‘Multiple uses’ – refers in this context to the fact that the plant is used as ingredient in more products. It is easily notable that tulsi and camomile are the most versatile and used plants.

5.2. Community Forest User Groups

Community forestry is in essence the transfer of land and land rights from government to people in order to achieve sustainability of the natural resources and improve livelihoods of rural households. The people that are part of community forestry programmes are organised in community forest user groups (CFUGs), which are defined as the groups of people residing in forest vicinities that are entrusted to manage, conserve and develop the forests and utilise the products from a particular area of forest (Acharya et al; 2004). In addition, the CFUG membership is on a household basis. According to professor Dharma Raj Dangol, a key informant for this study, the selling of non-timber forest products (NTFPs) including medicinal plants is one of the income sources of CFUGs. The seven CFUGs presented shortly below were found applying a snowball technique.

Page 26 of 60 Chapter 5: Findings

Gyaneshwor Community Forest Location: Mangalpur VDC , Chitwan District Size: 280 ha Members: 1,600 households Sources of income: tourism, selling of firewood, selling of sandstone MPC starting date : 2007 Cultivated species: kurilo Area: 1. 5 ha Person in charge: 43 women organised in three groups External organisation that BISEP -ST 19 - provided the seed and money for the labour. provided assistance According to Danda Pani Bhatta, current president of the CFUG, the project failed because the final product could not be sold, as it was of poor quality.

Baghmara Buffer Zone Community Forest Location: Bachhauli VDC , Chitwan District Size: 215 ha Members: 1, 000 households Sources of income: Tourism, firewood and timber sell, medicinal plant cultivation MPC starting date: 2003 Cultivated species: Harro , Barro , Neem , Gothapre , and other 20 more medicinal herbs Area: 5 ha Person in charge: Employees of the CFUG, the healers’ group External organisation that The Nature Conservation Trust - program : Biodiversity Conservation Centre provided assistance – they gave technical support, trainings and money Since 2008, the Biodiversity Conservation Centre does not support the nursery anymore. Some members of the current management of the CFUG are not interested in preserving the medicinal plant nursery because the income from tourism is much more easily obtained. For 3 years in the nursery there have not been any planting activities.

Jankauli Buffer Zone Community Forest Location: Bachhauli VDC, Chitwan District Size: 59. 3 ha Members: 1, 100 households Sources of income: Firewood sell, tourism, medicinal plant cultivation MPC starting date: 2008 Cultivated species: Kurilo, ginger, turmeric Area: 4 ha Person in charge: 4 employees working 50 days/year External organisation that NGO WBC Nepal – provided technical support and seedlings provided assistance

19 http://www.bisepst.org.np/new/index.html

Page 27 of 60 Chapter 5: Findings

According to Mr Phaguna Mahato, employees of the CFUG, medicinal plant cultivation is an activity that generates an income of Rs50,000 annually. The community planted many neem and amala trees in the forest but at the moment these are young and are not exploited yet.

Mangaledevi Community Forest Location: Shaktihor VDC, Chitwan District Size: 101 ha Members: 135 households Sources of income: No sources of income at the moment – awaiting permission from DFO to exploit the forest; As future source of income: exploitation of the sal tree (Shorea robusta ) for timber. MPC starting date: 2007 Cultivated species: kurilo, tej pata; amala; gurjo; Area: More than 3 ha Person in charge: When necessary 5 people per day, from the members of the community, by rotation; These people are not paid for this work. External organisation that none provided assistance This CFUG is in the process of establishing, still awaiting permission from the District Forest Office to exploit the forest resources. For this reason, no medicinal plants were sold yet.

Satyadevi Community Forest Location: Korak VDC, Chitwan District Size: More than 100 ha Members: Around 100 households Sources of income: Selling of firewood and timber MPC starting date: 2009 Cultivated species: rittha; ch iuri; tespata; khayer; kahulo . Area of the nursery: Less than 1 bigha Person in charge: When necessary a few people, members of the community which are not paid for their work; External organisation that District Forest Office (DFO) provided assistance Mrs Dilli Manga Tamang, member of the CFUG, declared that the DFO extension workers visited their community and gave three trainings about medicinal plant cultivation to around 30 people and helped their community establish a nursery. The DFO has a campaign to promote income generation activities involving NTFPs. Mr Babu Ram Upreti, Assistant Forest Officer, declared that the DFO has organised trainings in other 6 CFUG in Korak and Lother VDCs, located in the Eastern part of Chitwan, in a hill area which is quite inaccessible due to lack of infrastructure. Since 2008, the DFO owns a nursery which has at the moment, around 500,000 seedlings that will be distributed to the CFUGs. The District officer also told us that the DFO plans to distribute annually this amount of seedlings to encourage medicinal plant cultivation in the hill area.

Page 28 of 60 Chapter 5: Findings

The District Forest Office is focusing at the moment on its trainings on CFUGs. However, during the fieldwork the researcher found a farmer that although interested in medicinal plant cultivation and had a nursery, could not attend the trainings, as he was not part of the staff of the CFUG. In order to train people that clearly show interest, the DFO should give open access to everybody to attend the trainings.

5.3 Cooperatives

This subchapter will present a short profile of the five cooperatives that cultivate or harvest medicinal plants: Praja; Swyabhiman; Prassidi; Fulbari and Balgum women group. Although a women group is not the same thing as a cooperative, the structure is similar enough and therefore, for the purpose of this study, we assimilate the women group to the cooperatives type.

Praja Cooperative Location: Shaktikhor VDC, Chitwan District Members: 375 members Start of medicinal plant 2000 harvesting activity: Harvested species: amala; barro; harro ; rittha ; chiuri; gurjo Buyers: One World Alc , which also help ed the cooperative with the process of certification for sustainable harvest of medicinal plants in the wild 20 ; Ghorka Herbal Ltd. This cooperative is the most significant actor on the medicinal plants market compared to all the below cooperatives according both to its experience on the medicinal plants market and to the volumes it collects and sells (18 tons of medicinal plants products per year). The cooperative is destined exclusively to the Chepang ethnic group. In order to become a member a person has to pay a fee of Rs50/year. This cooperative is clear example of success. If in 1997, the initial investment in the Praja Cooperative was the fee of Rs6,250 now the cooperative owns assets of Rs2,5 mil.. The current sources of income of the cooperative are collection and selling of honey, selling of medicinal plants, selling of ginger and mustard oil.

Swyabhiman Cooperative Location: Sardanaghar VDC, Chitwan District Members: 50 farmers MP C starting date : 2010 Cultivated species: ghiukumari , tulsi, lemongrass Buyer: Easy Multitrade International ltd (EMI)

In 2009, the cooperative was established with the purpose of cultivating medicinal plants. The cooperative has an agreement with Easy Multitrade International Ltd 21 (EMI) for tulsi and lemongrass. Since March 2010, the

20 According to The International Standard for Sustainable Wild Collection of Medicinal and. Aromatic Plants (ISSC- MAP) 21 http://www.emi.com.np/main/

Page 29 of 60 Chapter 5: Findings cooperative have started ghiukumari cultivation on one bigha in Bisayanagar. The land was rented for 5 years at a rate of Rs1,100/ katha /year. EMI is a network marketing company that sells products based on medicinal plants. It is in direct competition with Crystal Vision International Limited as both act on the same market segment and offer approximately the same kind of benefits to their members.

Prasiddi Cooperative Location: Jancaulli VDC, Chitwan District Members: 48 farmers MPC starting date : 2010 Cultivated species : ghiukumari Buyer: Aloe Nepal Ltd – provides trainings and seedlings ; Prasiddi cooperative is actually a spin off from the Swyabhiman cooperative. As the latter cooperative grew incorporating more VDCs, some of the members decided that coordination of members could be improved if the cooperative splits in two using a geographical criterion. The members of the cooperative started planting ghiukumari seedling on their own land starting this year. The cooperative has a contract for the selling of the plants with Aloe Nepal Ltd.

Fulbari Cooperative Location: Fulbari VDC, Chitwan District Members: 6 farmers MPC starting date : 200 7 ( trials) Cultivated species : amala, kurilo, tulsi, sugand wal ; Potential buyer : One World Alc – provides propagating materials and trainings ; The main activity of the cooperative is organic farming. Starting with 2006, the cooperative has a ten years agreement with One World Alc for organic farming certification and purchase of products. Shyam Hada is actively promoting medicinal plant cultivation in Fulbari, encouraging farmers to take it up, and offering technical support.

Balgum Women Group Location: Narayansthan VDC, Baglung District Members: 25women MPC starting date : 2010 Cultivated species : tulsi External organisation that One World Alc and Social Welfare Association of Nepal ( SWAN ) an NGO provided assistance ofer technical assistance and trainings; Formed six years ago, the women group has as main activity the cultivation of vegetables for own consumption but also for income generation. According to Mrs Jeevan Subedi, the leader of the women group, understanding the importance, and knowing about the healing properties of the plants motivates the group to take up the tulsi cultivation. At the moment, the activity of tulsi cultivation is in its initial phase, the

Page 30 of 60 Chapter 5: Findings group performing a trial a small plot of land to see if tulsi grows well in their area. She also declared that the group does not expect significant income from tulsi cultivation in the first year.

5.4. Individual Cultivators

This subchapter presents the findings from the surveys of cultivators. In this study, ‘cultivator’ means any person that has been cultivating or intends to cultivate (he/she already made some investment in the cultivation of medicinal plants). For this section, a sample of 28 farmers and private companies’ representatives will be used as primary data. The results of the survey will be presented thematically, sometimes grouping questions in order to create a clearer image. Moreover, because there are cases in which not all answer were given or the question was inappropriate, each analysis will be based on the number of available answers. Among the surveyed cultivators, there were 17 men and 11 women. The age and sex distribution of the sample of cultivator is the one depicted in the graph below. Most responders were between 36 and 65 years old. There were only two people older than that and four people younger. Figure 4 Age/sex distribution of the cultivators

66-80 56-65 46-55 36 -45 Female Age group Age 25 -35 Male 0 2 4 6 8 10 12 Number of people

Figure 5 represents the ethic mix of the cultivators that were surveyed. Brahmins dominate the sample, maybe due to the fact that Brahmin is one of the higher castes and is more educated. The second largest ethnic group, at a considerable distance from the first, is the Tharu, who are the indigenous people in the Terai area of Nepal. This sample is not representative for Chitwan District. Figure 5 Ethnicity of the medicinal plant cultivators

N/a Newar Gharti Chhetri Chepang Kumal Dalit Ethnic group Ethnic Gurung Tharu Brahmin

0 2 4 6 8 10 12 14 Number of people

Page 31 of 60 Chapter 5: Findings

5.4.1. Networking The farmer-farmer communication is likely to be a significant factor when it comes to stating medicinal plant cultivation. Some farmers became part of a certain network because their neighbour is also one. In addition, many farmers had help from an organisation regarding medicinal plants cultivation. The fact that 18 farmers out of 28 surveyed are affiliated to an organisation, either a cooperative or a marketing network, is a clear indication that organised groups have more power of persuasion. People are convinced more easily when they have examples of success or at least the risk is shared. Figure 6 depicts the size of the personal network of each surveyed farmer. Most farmers knew at least one other farmer that cultivates medicinal plants while eight knew more than ten others. Moreover, 23 farmers out of 28 stated that they share information about medicinal plants cultivation with other farmers. Figure 6 Size of the personal network of cultivators

>10 5-10 1-5 0

0 2 4 6 8 10 12 14 No. of known farmers known of No. Answers

From a wider perspective, there are some important actors in the medicinal plants cultivation scene. One example is Danda Pani Kafle, a farmer from Meghauli, who is a source of inspiration and knowledge for many farmers. Six people mentioned his name, including professor Dharma Dangol and a functionary from the DADO in Bharatpur. He is also member of two cooperatives (Prasiddi and Swyabhiman) which means that even more farmers have the chance of meeting him. Another example is Shyam Hada, manager of One World Alc, who has a significant sphere of influence, as he creates links between cooperatives that harvest medicinal plants from the wild (Praja Cooperative) and organic cooperative in Fulbari, the women group from Balgum and some individual farmers. Finally, the Adhikari family is worth mentioning. Mr Nawarj knows a few dozen farmers who are members of Crystal Nepal, while his wife Sita is a founding member of Crystal Vision because she added 2,200 new members across the entire country. 5.4.2. Knowledge of medicinal plants Most Nepali people have traditional knowledge about medicinal plants. Beside traditional knowledge, other sources of information are trainings organised by different organisations: the government, NGOs and companies: Crystal Nepal and Aloe Nepal. The number of medicinal plants that a farmer has in his own homegarden is used as a proxy indicator of a farmer’s traditional knowledge. For this analysis, two interviewees were excluded from the sample because they were representatives of a company and their personal knowledge probably would not influence decisions taken by the owner. Figure seven presents the number of plants grown by the 26 farmers in the sample. Most of them – 76% - have in their home garden less than five species of medicinal plants. The researcher appreciates that these people have a limited traditional knowledge of medicinal plants. However, people that have more than six plants have medium knowledge while those that have more than 20 plants in their gardens can be acknowledged as keepers of significant traditional knowledge.

Page 32 of 60 Chapter 5: Findings

Figure 7 No of grown plants in homegarden

>20 6-10 1-5 No of plants of No

0 5 10 15 20 25 Answers

5.4.3. Experience with medicinal plants cultivation The experience farmers have with medicinal plants varies from less than a year to around 35 years. However, farmers with more than 20 years of experience in medicinal plants cultivation are quite rare, only two in the sample of 28. Very inexperienced farmers are also few in numbers – only five that have less than one year experience. Most farmers (75%) have less than 5 years experience. 5.4.4. Motivation for taking up medicinal plant cultivation Farmers were asked to give the reasons for taking up medicinal plants farming. ‘Income generation’ is definitely the most important reason for starting this activity as 19 farmers (67%) out of 28 mentioned it. All the other farmers placed income as the second most important reason, preceded by ‘healing properties of medicinal plants’ (5 farmers), ‘environmental considerations and conservation of species’ (2 farmers) and ‘less labour intensive than other crops’ (2 farmers). Other reasons mentioned as a second or third are: ‘making environment and society better’ (1 farmer) and ‘because parents did’ (1 farmer). 5.4.5. Evolution of number of species and cultivated area The researcher was very interested to learn if the farmers that have more than 3 years of experience with medicinal plants cultivation are expanding the cultivated area and/or the number of grown species. Only 17 out of 28 farmers in the sample meet this criterion. Out of these 17, two farmers reduced the number of cultivated species. One of them increased the cultivated area while the other one decreased it. Five farmers increased the number of cultivated species while also increasing the land area dedicated to medicinal plants cultivation. Four farmers changed neither the number of species nor the cultivated area. Two farmers increase the number of species while maintaining the same area under cultivation. The only visible trend seems to be among the Crystal Nepal farmers and three companies. These actors were the only ones able to maintain or increase the cultivated area. This means that the increase of cultivated area takes place only if the market is relatively stable. The conclusion seems to be that there is no general trend and that the dynamics of cultivated area and number of species should be analysed on a case-by-case basis, looking at the identity and the particular situation of the farmer. 5.4.6. Initial investment in medicinal plant cultivation There is a significant difference in the range of initial investment between farmers and companies. For the three companies in the sample the initial investment excluding the cost of land was: Rs 20,800, Rs600,000 and Rs500,000 while for the fourth one the information is unavailable.

Page 33 of 60 Chapter 5: Findings

For individual farmers the figures varies from less than Rs1,000 to Rs300,000. For most farmers the investments consist of seeds or seedlings and are below Rs1,000. The graph below shows the range of the amount invested for medicinal plants cultivation by individual farmers. Figure 8 Individual farmers initial investment in medicinal plant cultivation (Rupees)

300,000 150,000 20,000 -25,000 10,000 4,000-5,000 1,000-3,000 < 1,000 Initial investment (Rupees) investment Initial 0 2 4 6 8 10 12 Number of farmers

5.4.7. Annual expenses incurred during the cultivation of medicinal plants All the farmers were asked whether they hire people to help with the cultivation and harvest of the medicinal plants they grow. Only 12 out of 28 farmers answered that they do need to hire temporary or permanent workers. The farmers said that they pay the temporary workers wages between Rs150 and Rs450/day depending on the local labour market, type of activity (weeding, harvesting) and the difficulty of the work. The average of the daily paycheque as calculated by the researcher considering all the answers of the farmers is Rs266/day. Considering the daily wage, one situation stands out. Mr Shyam Hada declared that currently he pays his temporary workers with Rs400/day and that in the past he wanted to pay them more but the other villages got upset because he was raising the market price for a day’s work. When it comes to permanent workers, the situation is a little different; there is a significant variation in the wages paid by private companies to permanent employees in charge of medicinal plant cultivation. For example, in two farms, the permanent workers receive Rs4,000/month, while in a different farm the same type of work is paid with Rs9,000/month. The conclusion that can be drawn from here is that the market is not mature yet and there is a lot of asymmetry of information between employer and employee. 5.4.8. The income generated through medicinal plants cultivation If medicinal plant cultivation is to be considered an endogenous development strategy, the first hypothesis that has to be proved is that medicinal plant cultivation leads to increased income for the same land area. Talking about income with the farmers was a little difficult in the sense the not many kept records or knew exactly how much they were gaining. As this difficulty was anticipated, instead of asking for the total household income, the researcher tried to find out how much of the total income is generated by medicinal plant cultivation and whether the income per katha is higher/same/lower than before. Out of the 28 surveyed farmers, 26 answered that their current income is higher or that they expect a higher one per katha . The two exceptions are Shyam Hada’s company that is currently not profitable and a woman that declared that the medicinal plants cultivation is simply not as profitable as other crops.

Page 34 of 60 Chapter 5: Findings

However, the picture of MPC’s contribution to the overall income is much more complex. Excluding those who said their income is lower now, the farmers said that the income generated trough MPC represents between 5% and 60% of their total income. For 13 farmers, the income from MPC is zero because they have not sold yet any medicinal plants products. The average income generated through MPC, as calculated by the researcher based on the sample, is around 37%. For eight farmers the income generated by the MPC is below 35% while in five cases the income is above 50%. The two examples where the income is fully generated through MPC are two private companies for which we could not speak directly to the owner. As mentioned above, Shyam Hada’s company is not profitable while the fourth company has not yet sold any medicinal plants products. From the distribution of the income generated MPC, it is clear that most farmers grow medicinal plants as a strategy to diversify their sources of income. Those farmers that specialise in MPC are rare, only one planning to increase MP cultivated area and totally give up other agricultural crops. Figure 9 Percent of total income generated through medicinal plant cultivation

100% 60% 50% 35% 20% 15%

Percent of incomeof Percent 5% 0%

0 2 4 6 8 10 12 14 No of farmers

Regarding the income that can be generated from the cultivation of medicinal plants, Chandra Adhikari, the president of the Fulbari cooperative, said that assuming a price of Rs80-100/kg for tulsi leaves and that the harvest from one katha is 100 kg of leaves, the total income from tulsi cultivation is between Rs 8,550- 10,000/katha /season. In comparison, the income from rice cultivation for a farmer is Rs 3,000- 3,500/katha /season. Komal Sapkota, shareholder of Crystal Nepal, confirmed that a farmer could gain up to Rs10,000/ katha /season from medicinal plants cultivation. 5.4.9. Alternative sources of income When asked what the sources of income of the household are, all the surveyed farmers mentioned at least one other source of income besides the medicinal plants cultivation. The sample for this analysis includes all the individual cultivators and excludes the companies. As figure 10 shows, the majority of the surveyed cultivators (21 out of 23) declared one or two more sources of income. Only two farmers mentioned three other sources of income besides the medicinal plant cultivation for their household. When considering this sample, the correlation coefficient between the number of family members and number of the household’s income sources is 0.003, meaning that there is no correlation between the two variables. The explanation could be that most people in the household work in agriculture, as most people said that another source of income is farming, or once the children grow and marry, they move out of the parent’s house and form a new household. The researcher’s observations on the field confirm this hypothesis. However, the sample is too small to make generalisations.

Page 35 of 60 Chapter 5: Findings

Figure 10 The number of additional sources of income, other than medicinal plants cultivation

1 additional source

2 additional sources

3 additional sources

0 2 4 6 8 10 12 sources of income of sources Number of additional additional of Number Number of farmers

The mentioned sources of income, other than MPC, are usually the selling of agricultural products or farming, jobs and pensions. In rare cases, there are remittances from the spouse that works abroad and four farmers have incomes from a small business, usually a small shop. Figure 11 present the sources of income that farmers mentioned besides medicinal plants cultivation. Figure 11 Sources of income, other than medicinal plants cultivation

ayurvedic medicine remittances small business pension

Source of income of Source farming

0 2 4 6 8 10 12 14 16 18 20 Number of farmers

5.4.10. Processing of medicinal plants The hypothesis that more processing of medicinal plants means a better margin of profit was tested on the field. However, because only companies have the financial resources to purchase processing machinery, the hypothesis was confirmed only in these cases. Moreover, most farmers just harvest and dry the plants in the shade before they sell them. Usually farmers apply the same type of processing to all the harvested plants. Excluding the nine farmers that have not sold medicinal plants yet, most farmers (80%) treat all the plants the same, processing the entire harvest the same way – that is drying and cutting. Four framers declared that they apply different techniques for their harvest, processing less than 50%. For example, Usha Mathu sells ghiukumari in pots (which are not processed at all) and prepared mixes of plants as medicine. Jagat KC, an ayurvedic doctor, is an example of complete processing as he sells medicines made from mixes of plants. All the farmers were asked if they knew the price difference between the raw and the processed MP products. Because most (15) farmers just harvest and dry the plants, they could not answer this question. Only four respondents could provide an example of the price difference between raw and processed products: 30-40% to 6000%. According to Komal Sapkota, shareholder of Crystal Nepal, there is a range of 30-40% in the price paid for the products that depends on the water content, which has to be between 2% and 7%.

Page 36 of 60 Chapter 5: Findings

Another example of price difference between raw and processed is given by Manoj Kumar Chaudhary, farmer. He stated that only separating the seeds from the amala fruit (Emblica officinalis ) increases the price six times, from Rs50/kg to Rs3,000/kg. Shyam Hada provided a different example of price difference in the case of ginger. Just dried ginger is sold with €4/kg while the same ginger, if packaged in bags of 75g each, can be sold with €2/bag. This means a 500% difference in price. 5.4.11. Problems implied by the cultivation of medicinal plants Like any other business, the cultivation of medicinal plants is not without its own problems. When it comes to the problems that farmers have to face, we considered the answers of all 28 farmers. The sample represents all types of problems during the different stages of the business, as some are experienced farmers while others just started. Most experienced farmers stated that the biggest problem is the market – meaning that is difficult to find a buyer and that as the prices fluctuate seasonally due to unbalanced supply and demand, making the income from the MPC unstable and unguaranteed. The two farmers in the sample that used to cultivate MP state that the reason for giving up was the inability to sell the products. Most farmers agree that a better market channel will be beneficial for their business. Information about prices and buyers is crucial in this sense. The solution is an improved transparency of the market and more exchange of information between sellers and buyers but also between farmers. In addition, taking into account that the market with most potential is not the national but the international one, certification schemes would give the farmers a chance to sell their products at better prices. According to Komal Sapkota, shareholder of Crystal Nepal, prices of medicinal plants products fluctuate considerably, up to 100%, according to unbalanced demand and supply. Storage is crucial in obtaining a better price. The storage facilities allow sellers of MP products to obtain a higher price by being able to wait until the prices go up again. However, very few farmers have the space and money to create storage facilities. Remembering the Fulbari farmers, some of them gave up medicinal plants cultivation due to lack of storage facilities. The second major problem mentioned especially by those farmers that have less experience is the lack of knowledge about the cultivation of medicinal plants. They are also the ones that say that for improving their business trainings are necessary. A different problem is the seed availability. Mrs Sita Dhargal said that although she obtained good revenues from tulsi cultivation for two years in a row, she had to stop due to lack of good seeds. Moreover, in the case of Gyaneshor CF the asparagus harvest was wasted because the product was not good enough to be sold. Other problems mentioned by farmers are that chemical fertilizers and insecticides are prohibited as these substances decrease the effectiveness of the alkaloids present in the medicinal plants (medicinal plant cultivation must be organic). Therefore, farmers must use natural fertilizers, most of the time cow or buffalo dung. The Fulbari community is mostly organic and they have access to much training about composting and natural fertilizers. Therefore, this community will probably not have problems with fertilizers. However, other farmers, like the members of the Prasiddi cooperative, have little or no experience with organic farming as they are now planning to switch to organic farming at least for the area of land that they used for medicinal plants. For the families that do not have enough dung, the natural fertilizer could become an additional cost. Pests are usually a problem for crops. Fortunately, medicinal plants have little pests as these species secrete their own substances that repel insects. However, for some species pests can be a problem. Danda Pani Kafle

Page 37 of 60 Chapter 5: Findings a farmer from Meghauli and Chhandra Adhikari, the head of the organic cooperative in Fulbari, have already developed organic insecticides and they share this knowledge. Finally, another problem mentioned by farmers is the lack of time and labour force. For Manoj Chhaudari the lack of time is a limiting factor for his medicinal plant business. Although he could be selling more products, he cannot expand production because he does not have time and the kids can help only when they are not busy with school. To sum up, according to the medicinal plants cultivators, having a good network of other cultivators is important for gathering information on cultivation practices and market. Most of the farmers have less than five years of experience in this activity which proves that this activity quite new in Chitwan District. Moreover, taking into account the cooperatives and the CFUGs that just started cultivation, medicinal plants cultivation seems to be a rapidly expanding activity. However, only farmers that are part of a network seem to be able to increase the cultivation area in time. The main driver for starting medicinal plants cultivation is income generation followed at a certain distance by the healing properties of the plants. The necessary investment per katha /season is mostly less than Rs 3,000 for an individual farmer. However, the income generated by this activity cannot sustain the household. On average, the contribution of medicinal plants cultivation is 37% of the household income, and most households rely on at least one more source of income other than medicinal plants. Only companies have the financial power to process medicinal plants and therefore they get a higher share of profit. For most cultivators the most important problem is the market, due to the unbalanced supply and demand, which results in fluctuating prices and the lack of transparency of information on the market.

5.5. Non-cultivators

After surveying partly the medicinal plant cultivators, the researcher found the need to ask people that do not cultivate and try to find out what are the motivations for a hypothetical start of MPC and the perceived necessary conditions for such and activity. The researcher designed a questionnaire for non-cultivators meant to reveal prior knowledge of medicinal plants, reason for a hypothetical start of medicinal plants cultivation and the reasons for not starting such a activity. For this survey, the sample was random. The researcher tried to find as many men as women. Moreover, a non-cultivator is, for the purpose of this study, a person that has not or does not commercially cultivate medicinal plants. Figure 12 Age/sex distribution of non-cultivators

71-80 61 -70 51-60 41 -50 Female

Age group Age 31-40 20-30 Male

0 2 4 6 8 10 Number of people

Figure 13 presents the ethic mix of the sample. Brahmins dominate the sample because they represent the majority in the Fulbari and Mangalpur VDC were most of the surveys were made. The second largest ethnic

Page 38 of 60 Chapter 5: Findings group is the Gurung, closely followed by Chhetri and Dalit groups. This sample is not representative for the entire district. Figure 13 Ethnicity of non-cultivators

Darai Newar Dalit Chhetri

Ethnic group Ethnic Gurung Bhramin

0 2 4 6 8 10 12 14 16 18 20 Number of people

5.5.1. Knowledge of medicinal plants The hypothesis that the more traditional knowledge people have, the more likely they are to cultivate medicinal plants, was explored in this survey. The number of medicinal plants that a farmer had in his own homegarden is used as a proxy indicator of a farmer’s traditional knowledge. Therefore, people who had more species in their garden can be considered more knowledgeable than those who do not grow medicinal plants. Out of the 31 people who were surveyed, most of them grow medicinal plants in their homegarden, only five do not. As in the case of the cultivators, the researcher appreciates that these people who have less than five medicinal plants in their homegarden have a limited traditional knowledge of medicinal plants. However, people that have more than six plants have medium knowledge. The correlation coefficient between the number of medicinal plants that the farmer had in his homegarden and the decision to start medicinal plants cultivation is 0.24. This means that the farmer’s knowledge of medicinal plants is slightly correlated with his decision whether to start cultivation or not. Figure 14 No of plants grown in the homegarden

13 8 5 4 3 2 1 0

No. of plants in in homegarden plants of No. 0 1 2 3 4 5 6 7 8 No. of farmers

Another proxy for people’s awareness of MPC is their knowledge about other people that cultivate MP. Out of the 31 people who were surveyed, just six people knew other people that cultivate commercially the medicinal plants. This means that in many communities MPC is not a common practice.

Page 39 of 60 Chapter 5: Findings

5.5.2. Willingness to start commercial cultivation of medicinal plant As the main purpose of this survey was to find out if people are willing to start MPC, the next question was if they would be willing to start MP commercial cultivation. Since during the previous interviews with the cultivators the researcher found out that farmers are quite risk averse and that neighbours and the community matter a lot when one takes a decision, this question was formulated in the following manner: ‘Let’s say that your neighbour is commercially cultivating medicinal plants and that he /she is earning more money per katha . Considering this, would you also start to cultivate commercially medicinal plants?’ Out of the 31 people, 13 (representing almost 42%) said that they would consider MPC. The next questions tried to elicit the reasons for the beginning of MPC. The questioned was formulated like this: ‘What would make you start cultivating commercially medicinal plants?’ Below, figure 15 states all the reasons people gave as one of the reasons behind the start of MPC. Figure 15 Reasons for starting the cultivation of medicinal plants

Organic farming Familly support Available technology Own consumption Existance of the market Seeing others succeed Medicinal purpose Having technical training Owning suitable land Knowing the importance of MP More money

0 2 4 6 8 10 12 14 16 18 20

No of people who stated the reason

For those people that said that they are considering to start medicinal plant cultivation, the follow up question was ‘If you start commercial MPC, what do you think would need?’ Figure 16 Perceived needs for the start of commercial cultivation of medicinal plants

Trainings on cultivation of MP Market knowledge Money for initial investment Extra labour force Communtity involvement Suitable land Propagating materials Irrigation

0 5 10 15 20 25

No of people who stated the reason

Page 40 of 60 Chapter 5: Findings

As figure 16 above shows, most of the responders consider that trainings on medicinal plants cultivation are necessary in order to start medicinal plants cultivation. Second most quoted necessary facts for the beginning of the new activity were market knowledge and money for initial investment. Moreover, some of the farmers suggested that the medicinal plants cultivation activity should be introduced as a community activity rather than an individual one, and they suggested that the entire community should be involved in taking this decision. 5.5.3. Choosing what species to cultivate The next question was about what species they would grow, the farmers answered either by stating the criteria for choosing a certain species or by choosing a particular plant or plants. Four people chose to name a certain species of plant like tulsi , camomile, kurilo , and neem. Table 6 presents the frequencies of the criteria for choosing what species to cultivate. As expected, while most people would start medicinal plant cultivation for income reasons they would choose the most profitable plants. A definition of ‘most profitable’ was not elaborated, but most people find it easy to express the criteria in these terms. Most farmers understood by profitable that there is demand or that the price is high. Once more, it can be observed that risk adverse people stated that they would choose ‘those species that have been proven to be profitable’. Table 6 Stated criteria for choosing the species to cultivate Criteria for choosing the species to No of people cultivate Most profitable 7 Compatible with land 2 Useful for healt h 1 Proven to have success 2

5.5.4. Financial resources Another question that was raised in the survey was ‘How much do you afford to invest in medicinal plant cultivation/ katha /year?’ From the survey among cultivators, the researcher concluded that the average amount for initiating the cultivation of medicinal plants is around Rs3,000. The fact that seven peope are willing to invest the needed amount is that these farmers have a good sense of the necessary investments. It can also be noted than only four farmers can afford to invest over Rs 5,000 per katha . Figure 17 Willingness to invest in medicinal plant cultivation per katha

7000 6000 5000

/year /year 3000 <3000 katha 0 can be invested/ be can

Amount of Rupees that that Rupees of Amount 0 2 4 6 8 Number of farmers

Page 41 of 60 Chapter 5: Findings

5.5.5. Unwillingness to start medicinal plant cultivation There were 18 people that said that they would not consider MPC even though they could see their neighbour making more money out of commercial cultivation. These people were asked to explain why they would not cultivate medicinal plants under these conditions. Figure 18 below presents the respondents answers.

Figure 18 Reasons for not starting medicinal plant cultivation

Lack of MPC knowledge Own inappropiate land Not enough labor force Have heard of unsuccessful MPC Satisfied with current situation No MP market MP not common activity Prefer more secure incomes Food security

0 1 2 3 4 5 6 7 8

No of people that stated the reason

It is important to note that seven people mention that they would not start cultivation because they lack the knowledge. The second most important reason for refusing to cultivate medicinal plants is inappropriate land. Those farmers that owned lowlands (that get flooded during the rainy season) use these lands for rice only. These farmers did not considered the financial aspect of medicinal plants cultivation. Two of the farmers stated that they do not remark any market for medicinal plants cultivation and mentioned that is not possible to start the cultivation of a crop without market. One of the farmers stated that the main reason for not considering the cultivation of medicinal plants is that his land is barely enough to feed his own family and that it is clearly insufficient for medicinal plants cultivation. To sum up traditional knowledge of medicinal plants is a relatively unimportant factor in the decision to start cultivation of medicinal plants. Income is the main driver of starting this activity followed by the understanding of the importance of medicinal plants. Moreover, people that are willing to start this new activity realise that they need trainings, market knowledge, and approximately Rs 3,000 as the initial investment.

Page 42 of 60

Chapter 6: Analysis and Discussions

This chapter contains the analysis of the results presented in the previous chapter. The first subchapter will sketch a profile of a medicinal plant cultivator while the second subchapter will reiterate the research question and will answer it using the framework of endogenous development, presented in the theoretical framework.

6.1. Cultivator Profile

This section tries to sketch the most important characteristics of the medicinal plant cultivator as it results from the quantitative data that was gathered. However, given the limited number observations and the lack of data on other variables that could influence the decision to cultivate, this section remains mainly exploratory in nature and aims to provide avenues for reflection. In order to analyze the decision to cultivate medicinal plants, 40 observations out of the total of 59 were used. This sample contains the non-cultivators and those cultivators that, although they started cultivation, they have not sold yet any products as all these farmers face the decision to start medicinal plants cultivation recently. The experienced farmers that have sold medicinal plants products and continued cultivation were excluded as they face a different decision, that of continuing or not the activity and they draw upon their own experience when making this decision. In the following paragraphs, it will be explained how the decision to cultivate medicinal plants is influenced by variables such as age of the farmer, sex, family size, owned land area, level of education and number of medicinal plants in homegarden as proxy for farmer’s traditional knowledge. For this purpose a linear regression model is proposed and then estimated by ordinary least squares (the independent variable estimator is obtained by minimizing the sum of squared distances between the actual data points and the values given by the linear approximation). Running the regression will all the above-mentioned variables, it was discovered that not all of them were statistically relevant, having the p value higher than 10%. Therefore, the following variables were excluded in the second regression model: age of the farmer, family size, and number of medicinal plants in homegarden. It could be expected that a lower age would be expected to contribute to a positive cultivation decision (lower risk aversion) and a bigger household to lead to a diminished willingness to attempt cultivation (priorities more related to subsistence crops) while more medicinal plants present in the homegarden could be an indication of more traditional knowledge. In the final version, the regressors in the model, chosen based on expected theoretical relationships and statistical significance reasons are: A constant term, the y-intercept (needed for statistical reasons) Farmer’s sex (dummy variable with 0 for male and 1 for female) The surface of owned land (in katha) The number of years of education (with 0 for ‘illiterate’ and 1 for ‘just literate’) Table 7 Correlation matrix for the explaining variables Sex Owned_katha Education

Sex 1.000000 -0.110395 -0.123893 Owned_katha 1.000000 0.300504 Education 1.000000

Page 43 of 60 Chapter 7: Recommendations

As the correlation matrix above shows, the correlations between the variables do not point out to any overlay of information between the three explaining variables that would motivate excluding any one of them. Consequently, the estimated regression model was the following: cultivation_decision = 0.404*ct - 0.409*sex + 0.006*owned_katha + 0.028*education. The statistical results of the regression model are presented in the table below (as given by the EViews software printout).

Table 8 Results of the second regression model

Coefficient Std. Error t-Statistic Probability Ct 0.404300 0.126890 3.186219 0.0030 Sex -0.409414 0.153649 -2.664601 0.0115 Owned_katha 0.006277 0.001737 3.613045 0.0009 Education 0.028170 0.013762 2.047036 0.0480 R-squared 0.275740 Adjusted R-squared 0.215385 Sum squared resid 7.170177

Judging by the goodness of fit statistic R 2 (adjusted for the loss in the number of degrees of freedom implied by additional variables) the regression model explains 21.53% of the variability in the decision to cultivate. Though this may seem like a low measure, the way the regressors influence the decision variable is very informative about what actually contributes to it. As such, the following relationships are confirmed: Males are more inclined to attempt cultivation (negative coefficient of the Sex variable, with 0 standing for males). This fact in influenced by the fact that 28 out of the 40 respondents were men and by cultural aspects. Each time the farmer and his wife were present at the moment of the survey, the farmer would give his name even though his wife might have been as involved in cultivation as himself. A larger owned area leads to a higher willingness to attempt cultivation. As most of the farmers allocated the land first to satisfy the food needs of the family, only those that have a ‘surplus’ of land might dedicate it to a different crop such as medicinal plants. Higher education leads to a higher willingness to attempt cultivation. As medicinal plants cultivation requires some more involvement of the farmer when it comes to the marketing process, it is likely that farmers with a higher degree of education are more willing to attempt such an activity. While the values of the coefficients can be indicative of the magnitude of their influence on the independent variable, a direct interpretation is difficult as the latter is a dummy, binary variable. Their standard error (the standard deviation associated to their mean value), by being relatively small in percentage terms, indicates the values are relatively stable, but then again, the sign is more informative than the values themselves. A similar interpretation can be given by looking at the t-statistic (a function of the coefficient’s distribution reflecting its range of variability), which is also relatively small. The estimation’s probability values support that all explaining variables are significant at the 5% level (the lower the p-value, the more statistically significant is the dependency, i.e. the less likely the chance of rejecting the dependence hypothesis when it is true). Although the farmer is willing to start cultivation of medicinal plants, external economic and political factors play an important role. Even if the surveys did not include questions related to the economic situation of the country or political stability, it is likely that the Nepali farmer acts just like any other businessman, taking into account these factors when making a decision.

Page 44 of 60 Chapter 7: Recommendations

However, the researcher found indirect proof that farmers do keep in mind the political arena when making business decisions. In the focus group with the Crystal Nepal members, the farmers said that they expect lower profits and sales this year due to the government intervention. After discovering that a network marketing business was illegal, the government declared as illegal all the network marketing businesses, including Crystal Vision International Limited. The company reacted by suing the government, but in June, during the research, the court had not yet decided on the issue. According to Nawaraj Adhikari who was in contact with several farmers of the network, farmers were quite sceptical about the fast resolution of the conflict and were considering not planting medicinal plants in the next season, or until the resolution of the conflict. Moreover, the fact that no farmer relies exclusively on the income generated by the medicinal plants and that most of the farmers start with a small area is proof those farmers are risk averse and that they need confirmation of the viability of an activity before investing.

6.2. Business Profile

This subchapter aims to present a brief market analysis of the medicinal plants and a SWOT analysis of the business of medicinal plants cultivation. Brief Market Analysis The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of a specific company or in our case a medicinal plant cultivator. The size of the global unprocessed medicinal plants market is significant. If some of the international transactions are well quantified as we have seen in the introduction of the study, the local market data is scarce, so a correct estimation of the size of the Nepali national market is difficult. Looking at growth rate of the international market between 1993 and 1998, Grunwald (1994) notes that the EU market experience an 8% increase while the Japan and South-East Asia had a growth rate of 15%. The increasing global demand for medicinal plants is determined interest that the pharmaceutical industry which is looking for efficient substances to combat disease, the rising popularity of the alternative medicines, expansion of the herbal cosmetics industry and the dietary supplements that use primarily medicinal plants (Holley and Cherla, 1998). Market profitability is difficult to estimate due to lack of data. Based on sample of farmers, the profit margin of medicinal plants cultivation varies from 50% to 65% depending on the cultivated species. Considering the five companies in the sample, that act on both national and international market, the profit range is higher due to the fact that they are able to process the plants. However, no data is available at this point on the companies’ profit margins. The market for unprocessed medicinal plants products is a buyer’s market. Most suppliers are usually small farmers that have little negotiating power with the buyer. Although there are no entry barriers for the cultivators of medicinal plants, when it comes to processing industry, the machinery prices can become restrictive factor. The cost structure is different for farmers that are simple cultivators and for those that also process. In the case of simple cultivation, most costs are related to the current expenses for labour, water, and fertilizers. For companies, the main costs are the processing machinery, which also allow for a higher profit margin. The land is part of the initial investment in both cases. The distribution channels for the medicinal plants products start with the farmers. They either sell to other villagers or to a company, which usually processes the primary materials and then packages and sell either to

Page 45 of 60 Chapter 7: Recommendations the national or international market. Large companies that produce medicinal plants based products usually distribute them through specialized stores. At present Nepal, imports Ayurvedic drugs of more than 15* 10 8 rupees and it is increasing with approximately 25% each year 22 . There are more or less two hundred different brands of Ayurvedic drugs produced by 30 private Nepali companies, (data is not reliable). Nepal imports from India from more than 150 Ayurvedic drug companies. However, a significant amount if not all raw materials of these Ayurvedic drugs have their origin in Nepal, as also the scientific literature states (Olsen and Bhattarai, 2005). As observed in the Narayanghat and Kathmandu, the pharmaceutical stores that sell only herbal based products are not frequent. In the Narayanghat shopping area there were around eight some of which dedicated exclusively to a brand. Two of the store were part of an ayurvedic school, and they even had their own doctor. However, in Kathmandu, the natural products are distributed also in supermarkets. SWOT Analysis SWOT analysis of medicinal plants cultivation as farmers and CFUGs that consider taking up medicinal plants cultivation as an income generating activity. Strengths. One of the notable plus of medicinal plants cultivation is that it requires low capital investment while it can provide a good profit margin. At the moment the number of cultivators it may seem large, but their potential to supply is limited as the cultivated areas are small. Moreover, the business provides non monetary benefits for the farmer such as the possibility to consume the plants he grows. Changing the crop, and giving the soil time to rebalance the nutrients, can be an extra benefit of medicinal plant cultivation. Sesame is a nitrogen-fixating crop, and it can easily be combined with tulsi , alternating seasonally. Weaknesses. Farmers need technical knowledge to be able to get a good product. Information about cultivation techniques is crucial in that sense. A good business is based on a good product. Trainings are essential in this case. Farmers that act on the local and international market have a different set of problems that those who sell their products to an intermediary or a network. Those that have to compete on the international market find that the competition is quite fierce while those limited to the national market have less competition. However, on the national market there is a great risk that the brand is copied and reputation being affected. The major opportunity for a cultivator and/or processor of medicinal plants is that the global market is continuously growing. Certifying the product with the intention to export would be a good strategy at the moment. If the product is of suitable quality, the producer needs minimum processing. For example, a certified organic herbal tea can be sold at premium price while necessitating minimum processing. Ayurvedic medicine is part of the governmental policies. There is a Department of Ayurveda as part of the Ministry of Health and Population. The government has initiated in 1992 (2048) and Ayurveda health policy23 which, among other things, encourages herbs farming, production and enterprise of medicines in the entire country. Moreover, the government just released the policy for organic farming. Since medicinal plants cultivation can only be organic, the cultivators should use governmental subsidies for the certification processed to certify as organic producers.

22 http://www.ayurvedanepal.com/ 23 http://www.ayurvedanepal.com/

Page 46 of 60 Chapter 7: Recommendations

The Department of Plant Resources (DPR) is a national governmental agency that supports the medicinal plants sector. The department has testing facilities, which farmers can use and receive a certificate that states the content of the essential oil or other plant extracts. Moreover, the department has been collecting technical information on cultivation of medicinal plants. There are also trained personnel that could provide useful information to farmers if they do some extension work. Treats. The roads system is a major impediment for market growth. Even though a community has a big potential of cultivation medicinal plants, the poor infrastructure can restrain the access of the intermediaries who can no longer reach that certain community. Lack of infrastructure is a major concern when it comes to market access in general.

Table 8 SWOT Analysis of the business of medicinal plants cultivation Strengths Weaknesses • Low investment • Volatile prices • Income generation • Lack of technological knowledge • Non monetary benefits Opportunities Threats • Increasing global and national market • Lack of infrastructure • National policy on organic farming • Political situation in the country • Ayurveda Health Policy • Unstable business environment • Facilities by DPR • Significant competition on the national and • DFO programmes international market

Although the business of medicinal plants cultivations is a niche type, it has great potential. Overall, the strengths and the opportunities are appreciated to be dominant over the weaknesses and treats.

Page 47 of 60

Chapter 7: Recommendations for Project Design

This section looks back at the research question -’To what extent could medicinal plants cultivation be an endogenous development strategy in Chitwan district, Nepal?’ – and provides a detailed answer based of the endogenous development framework. The main product of the conducted research is presented in this chapter in the form of a project based on the endogenous development framework and the previously presented findings and analysis. The reasons for creating such a project are the recognition of the potential of medicinal plants cultivation as a income generating activity but also a conservation opportunity. From a donor’s perspective, an agency such as Compass that is willing to follow the endogenous development approach, this type of project creates the opportunity to involve people and put them in charge of their own development. The project design presented below excludes some of the chapters usually present such as financial details, human resources, and a clear timeline. These parts are left out because they can be decided only when a budget exists.

Objectives

The aims of the project are to promote small-scale community-based cultivation; as processing and medicinal plant marketing relieve pressure from wild sources but also to introduce best practices for wild medicinal plant collection and sustainable collection levels. The main objectives of this project are improving livelihoods, conserving and improve local knowledge and practice, preserve the medicinal plants species, and advocate for an enabling environment with the policy makers. In the next paragraphs, all these objectives are elaborated on. Improving livelihoods

The majority of the population in Chitwan area is quite poor. Most people in the district are farmers and do subsistence agriculture. Most of these people would welcome an activity such as medicinal plants cultivation that could generate additional income in the form of cash would most like. Looking back at the sample of surveyed individual farmers, cooperatives, and CFUGs, the major drive for starting medicinal cultivation was more income or knowing the medicinal plants value. Moreover, aaccording to the findings presented in previous chapter, medicinal plants cultivation does lead to increasing income on the same land area. However, in order to achieve a better retention of the financial benefits of medicinal plants cultivation, processing of the plants is necessary. Conserve medicinal plant species

A medicinal plants based project should involve both the aspects related to cultivation and wild harvest because both have influence on the conservation of species. Many of the species presented in the findings chapter as cultivated are not in danger of extinction. However, the situation is reversed when it comes to wild harvested species. Although the cultivation of medicinal plants leads to a decreasing pressure on the wild population, cultivation should not be the only conservation measure taken. Medicinal plants collectors should learn to harvest sustainably the wild species. The first step is creating awareness of the medicinal plants importance and the danger of losing the species. Collectors have knowledge on the habitat of the plants and they could contribute to the domestication of some of the species. The collectors and cultivators should be able to share their knowledge.

Page 48 of 60 Chapter 7: Recommendations

Conserving and improving local knowledge and practices

The Crystal Nepal network and the Fulbari cooperative are clear example of initiatives of improving knowledge by trainings in the first case and experimentation in the second. By giving trainings to the farmers that start cultivation of medicinal plants, the Crystal Nepal network not only insures a good harvest but also improves the farmers’ knowledge. The network in clearly investing in the knowledge expansion process because recently an ayurvedic doctor was hired to support the trainings but also processing of plants process. The Fulbari cooperative is clearly experimenting with local resources, trying to find the best land for cultivating medicinal plants, both from a fertility and water availability perspective. They are trying to include medicinal plants cultivation in their portfolio of crops to diversify their income sources. Although only a few farmers conduct trials, the entire group discusses and benefits from the acquired knowledge. Finally, the traditional healers own a considerable amount of knowledge about medicinal plant uses. Their knowledge should be documented and also passed on to the younger generations. The project should create opportunities for people to share their knowledge and learn from each other. No group has complete information on medicinal plants; therefore, discussion among groups could bring benefits to all. Advocating for a enabling environment

Even though the project benefits from a good design, the outcomes are still influence by external factors, which cannot be controlled by the designers of the project. Some of these factors are the general state of the national and world economy, the market regulations and policies, the business environment, and the legal framework. The project should create capacity among the actors and mobilize cultivators and collectors of medicinal plants by creating organisations that could represent them in the political arena. These organisations could advocate for a medicinal plants products certification scheme, more infrastructure and market transparency. Since the government has an initiative to facilitate certification for organic farmers, an association of medicinal plants cultivators could take advantage of the window of opportunity and push for a policy dedicated to medicinal plants cultivation. The Department of Plant Resources in Kathmandu provides the service of certifying the content of the medicinal plants product, especially for essential oils extracts. Considering the condition of the infrastructure in Nepal, such centres should exist in every department to increase the access of the farmers to this service. A medicinal plants cultivators association could advocate for more transparency of the information on the market. As there are few powerful buyers and many dispersed sellers, reducing asymmetry of information would increase market efficiency. The recommendation would be to create events where buyers and sellers of medicinal plants can meet and exchange information; and/or make a specialised magazine.

Target

One of the most important questions that the designers of a project must answer is who is the target of their work. In the case of medicinal plants cultivation, the target is any person that is willing to cultivate. However, in the case of wild harvest, the programme should target the awareness of most people. Most likely that only a few people will start cultivation, but there is a threshold that should attained in order to ensure the conservation of the species. Further studies are needed to determine this threshold.

Page 49 of 60 Chapter 7: Recommendations

The project can be adjusted to suit the landowners or landless people. Both upland and lowland are suitable for different type of medicinal plants. The climate of the different regions of the country are also a factor that influence the choice of cultivated species as different types of habitats are suitable for different plants. The program should increase awareness of medicinal plants importance in order to conserve the species. In different regions, people’s knowledge differs. The more inaccessible the region the most likely more traditions are kept and people rely more on their local healers. A thorough analysis of the categories of people that have live in the different types of climates is necessary to establish how many people could actually start medicinal plant cultivation. At this point, the researcher does not have such type of statistical data and is unable to make a good estimation about the total number of people that could be part of such a project in Chitwan District. As the exact number of people that could be included in such a program is extremely difficult to estimate at the moment, let’s consider the processes of selection of the potential candidates. First of all, considering the entire agricultural land area in Nepal, the land allocated for food production and livestock must be excluded. Furthermore, not all the remaining area is suitable for medicinal plants cultivation. Considering the theoretical land area that could be available for medicinal plants cultivation, the next step is to consider the market conditions. At any price level there will be farmers for which medicinal plants cultivation is not a feasible activity. Considering a micro approach, the farmers that could start medicinal plants cultivation should have suitable land, technical knowledge, enough labour force and money to sustain the activity and a proper market channel. The designers of the project can only influence the market channel and technical knowledge aspects.

Implementation

The project would most likely need minimum a medium period, around four-five years. The project should create different strategies for farmers and CFUGs. Initial campaign for creating awareness of the importance of medicinal plants but also the income generation potential is essential in creating interest among the farmers. Moreover, when trying to involve new peope in this type of activity, the recommended approach is a participatory one. People know best what they want and what they can do, but in some places it is highly likely that without a prior campaign of awareness raising, any program involving medicinal plants will fail. The major implantation steps are: indentify the development niche (particular combination of plants and people), supporting organizations for project implementation (finding local partners), selection of external resources (the input of the donor agency and the local partner), network building and communication and sharing of knowledge. Identification of new development niches

The medicinal plant cultivation is in fact a niche market as it is not a common agricultural practice. The number of medicinal plants that can be cultivated is significant; therefore, a selection process is necessary. The process of identifying the suitable species is based on the characteristics of each cultivator, including his/her own knowledge, local traditions, soil properties, geographical and climatic characteristics. Many farmers cultivate medicinal plants. However, their negotiating power with the buyer is reduced. Farmers that organise themselves in cooperative or groups have a better negotiating power with a buying company. Moreover, companies are interested in a constant and considerable supply, much more than a single farmer’s production. Therefore, cooperative have another advantage over individual cultivators.

Page 50 of 60 Chapter 7: Recommendations

The tradition of cooperatives in Nepal acts as a favourable background for medicinal plants cultivation. The formation of groups is recommended because they create networks of support, and people can talk with each other, solve problem. Organising the farmers in cooperatives seems to increases the chances of success, because cooperatives can collect more products and gain more negotiating power with the buyer Another important aspect is that cooperatives can have significant financial resources. Form members’ contributions and current business, cooperative could raise enough money for processing equipment. Moreover, the cooperative, acting as a company that wants to increase its revenues, can play the role of the intermediary between farmers and companies, while at the same time reducing the risk exposure of the individual farmer. Organised groups of cultivators have control of their development options because through participatory processed of decision making, they can chose for example the company they work with and the market they want to operate on, either national or international. Supporting organisations for project implementation

Since both governmental agencies and NGOs have programs to improve livelihood using medicinal plants, collaboration could benefit both sides and increase the project chances of success. A Public Private Partnership between an NGO and the DFO for example, could be to improve access of the hill people to the market. NGOs seem to have a good record in Nepal. Some of them such as SWAN, FORWARD are national organisations with projects in many districts. This type of NGO is clearly aware of the local characteristics and is able to preview many aspects related to the implementation of a project and already have a good reputation among the farmers. Selection of external resources

Moreover, medicinal plant cultivation relies mostly on local resources such as land, water, labour and in most cases also propagation materials. Therefore, the external input most needed is knowledge on cultivation. The Prasiddi cooperative is a good example of external inputs in the form of seedlings and knowledge on cultivation. A donor organisation ant the local partner could also create links between different cooperatives, CFUGs, companies and farmers. Their role could be to facilitate communication among the different stakeholders. Depending on the budget of the project, another external input could be a financing scheme meant to help the farmers that lack liquidities to start medicinal plants cultivation. Such a scheme could be initiated probably in a later stage of the project, when the pilot has proven successful. Network building

A project that aims to conserve species but also generate income should create networks and strategic partnerships. There are many actors involved with medicinal plants cultivation, and bringing them together could only benefit the project. Facilitating communication between local actors should be one of the strategies that insure the success of a project. All the local actors, government, NGOs and universities can contribute. Facilitating communication between the shareholders in the market should be beneficial to all the involved parties as each one has different types of information: universities and research centres on new species that could be cultivated for example while farmers have a long experience in the practical cultivation process and could have even improved local varieties.

Page 51 of 60 Chapter 7: Recommendations

In order to have a clearer picture of the medicinal plants market, table 9 present the stakeholders and their stakes. All these stakeholders would benefit if communication channels are opened and they can start collaborating. Table 9 The stakeholders in MPC and their stakes Stakeholder Stake Extension workers, want to promote medicinal cultivation as Department of Forests a source of income for households Department of Plant Resources Research providing certificates of quality for products Private companies, including marketing Profit making from the sales of medicinal plants products networks (CVIL; EMI) Individual farmers Income generation, own consumption CFUGs Income generation for community uses Cooperatives Uniting farmers and creating a market channel , making profit Consumers Consumption of good quality products at acceptable prices Conserving species and indigenous knowledge; improving INGOs (UNDP) livelihood Universities and research centres Develop and improve species, bio -prospecting NGOs: SWAN, SECARD, FORWARD Promoting projects that improve livelihood

Established in 1952, the Department of Forests (DoF) is one of the five departments under the Ministry of Forests and Soil Conservation. DoF is responsible for overall forest administration of both national and private forests and it is the only government agency for the sustainable management, utilization, protection and development of forest resources outside the protected areas. The seventy-four District Forest Offices (DFO) are responsible for the field level implementation of all the forest development programs, operations, and administration. The District Forest Office of Chitwan District has been promoting NTFPs domestication to reduce rural poverty since 2004 and already promotes medicinal plants cultivation as an income generation activity. However, the governmental agency focuses the training it offers on forest user groups, neglecting the individual farmers. The Department of Plant Resources under the Ministry of Forest and Soil Conservation was established in 1960. This organisation is conducting and providing services in the field of research and development of plant resources in Nepal. Main activities of the department are: • resource survey and collection of plant materials, • chemical and biological research for the utilisation of medicinal and aromatic plants, • biotechnology research and improvement and propagation of plants of economic value, • bio-prospecting of plants of economic value, • conducting trainings on plants conservation, • information and dissemination through publications. Therefore, the DPR is it an important stakeholder as it has the resources to research several aspects and spreadt the knowledge. However, as noticed by the researcher, the Department of Plant Resources from Kathmandu and the District Forest Office in Chitwan do not have a constant and efficient communication. As the networks are formed and protocols start to function, it is likely that more communication takes place.

Page 52 of 60 Chapter 7: Recommendations

NGOs like FORWARD developed programs on vegetable growing for landless farmers. The NGO provided the financial resources for the renting of the land and the technical support for farmers to start cultivation. The result of such a program was that most farmers, during an average time of four years, managed to gain enough money to buy their own land and continue cultivation. Knowledge sharing

Knowledge sharing is crucial for the continuous improvement of technical knowledge that is translated into field practices for cultivators and collectors. Therefore, the creation of venues that allow and stimulate communication is necessary. This would be the main input from the external organisation: funds for facilitating communication. The farmers’ expressed themselves the desire to share their knowledge with young people. The most notable cases are Danda Pani Kafle, Dambar Gurung and the healers. Danda Pani Kafle has students of his own – he shares his knowledge across two cooperatives that he is a member of and numerous farmers that look for him due to his reputation. In addition, Dambar Gurung has the financial resources to accommodate volunteers that come to his farm to learn about medicinal plants. Moreover, the healers expressed their desire to have apprentices. Although their knowledge of medicinal plants and their uses has been documented by the Trust for Nature Conservation, they feel it is not enough. Universities and research centres are also important actors as they are the main source of highly specific information regarding medicinal plants. According to Lozoya (1994), only for 10% of the plants available the information on the propagation of medicinal plants is available and for only 1% total known plants globally agro-technology is available. These percentages are a clear indication that developing agro-technology should be a research priority. An institution that would put together all these sources of knowledge and spread it would contribute to a significant increase in the knowledge level of many farmers. As the healers were part of the Tharu tradition, this would be the case of an interethnic sharing of knowledge and information. Such an organisation should decide which the most efficient types of communication are: magazine, conference, radio shows and implement them. In this project, a good exit strategy will be essential. The project should be design in such a way that it will continue to work by itself with no outside support. Remembering the Trust for Nature Conservation experience with the healers group, the project did not have a suitable exit strategy and the moment the outside financing stopped, both the clinic and the medicinal plants cultivation stopped. On the other hand, FORWARD for example has a different exit strategy. The NGO’s strategy and approach is to build local capacity and create a link to the community and the organisation by choosing one or two contact persons that act as extension workers, spreading new information supplied by the organisation after the project is completed.

Page 53 of 60 Chapter 8: Conclusions

8. Conclusions

Considering the medicinal plants cultivators, most of the farmers have less than five years of experience in this activity which proves that this activity quite new in Chitwan District. Moreover, taking into account the cooperatives and the CFUGs that just started cultivation, medicinal plants cultivation seems to be a rapidly expanding activity. Although at the moment for most cultivators the most important problem is the market, due to the unbalanced supply and demand, fluctuating prices and the lack of transparency, overall this market, even though a niche one, has a great potential for growth. The main driver for starting medicinal plants cultivation is income generation followed at a certain distance by the healing properties of the plants. With a relatively small initial investment per land area and season, farmers could obtain a good profit margin. This activity can be seen as one of the possible sources of income for a household along with wages and income from other crops. Medicinal plants cultivation is an activity that has potential to generate income using only local resources while preserving local knowledge and practices. A project on medicinal plants cultivation within the endogenous development framework can be achieved. With little external guidance to help crate network and improve communication, this activity can become a stable source of income for many communities across Nepal. Medicinal plants cultivation has a great potential for income generation if market conditions are known. However, at the moment it is very difficult to estimate, due to lack of necessary data, how many people could start this activity on a district or national scale. However, on a micro scale, the farmers that could start medicinal plants cultivation should have suitable land, technical knowledge, enough labour force and money to sustain the activity and a proper market channel. The designers of the project can only influence the market channel and technical knowledge aspects.

Suggestions for further research

Finally, there are some suggestions for further research. After completing the investigation the medicinal plants cultivation in Chitwan District, information that could help the endeavour of endogenous development is still missing. The below areas are worth investigating because they will improve the chances of success of the above-presented project. Expand study area . The lack of data on the situations in other districts of Nepal make the researcher to limit the conclusions to the study area and any generalisations cannot be made using the collected data. This study was focused on the Chitwan District but it is possible that, in the rest of the country, the situation might be different. Market studies. There is a great deficit of market information. Studies investigating the market and the actors on the market could improve the market transparency. A good estimation of the absorption capacity of the market will help estimate the appropriate supply. Sustainable harvest in the wild. A s mentioned in the introduction, there are scientific articles that warn about overharvesting of some species in the wild. As some species cannot be domesticated, the only available solution for species conservation is a sustainable harvest in the wild. Moreover, along with cultivation, sustainable harvest in the wild is a an important conservation measure that is worth promoting. Trials and studies on domestication could increase number of species that can be cultivated. According to Kala et al (2006), cultivation also permits better species identification, improved quality control, and increased

Page 54 of 60 Chapter 7: Conclusions and Recommendations prospects for genetic improvements. Moreover, in the case of large-scale farming, the best model, whether monoculture or polyculture must be identified. Investigating the effectiveness of governmental and NGO initiatives on medicinal plants cultivation is an important process as it leads to learning that can improve future projects. Both NGOs and governmental agencies have programs dedicated to medicinal plants cultivation. To the knowledge of the researcher, there are no studies on the effectiveness of such programs.

Page 55 of 60 Chapter 7: Conclusions and Recommendations

References

Acharya, U.; Petheram, R. J. and Reid, R. (2004) “Concepts and Perceptions of Biodiversity in Community Forestry, Nepal” Small-scale Forest Economics, Management and Policy, 3(3): 401- 410 Amarya, K. R. (2000 ) “Utilization of medicinal plant resources: Status, problems and prospects” -In: Society for the Conservation and Development of Himalayan Medicinal Resources. Japan, and Ministry of Forests and Soil Conservation, HMG/Nepal, Department of Plant Resources (eds.): Proceedings of the Nepal-Japan joint Symposium on Conservation and Utilization of the Himalayan Medicinal Resources, 331-352. Kathmandu: Ministry of Forests and Soil Conservation .quoted in Wagner et al 2008 Barber, J.S; Shivakoti, G.P.; Axinn, W.G.; Gajurel, K. (1997) “Sampling strategies for rural settings: A detailed example from Chiwtan Valley Family Study, Nepal” - Nepal Population Journal 6 (5): 193-203. Bhattarai, K. R. and Ghimire M. (2006) “Commercially important medicinal and aromatic plants of Nepal and their distribution pattern and conservation measure along the elevation gradient of the Himalayas” - Banko Janakari, Vol. 16, No. 1 Bussmann, R.W., Sharon, D., Vandebroek, I., Jones, A., Revene, Z. (2007) “Health for sale: the medicinal plant markets in Trujillo and Chiclayo, Nothern Peru” Journal of Ethnobiology and Ethnomedicine 3, 37, http://www/ethnobiomed. com/content/3/37 quoted in Poonam and Singh 2009 Dani D.D. (1986) “Population and society in Nepal: an overview. In Nepal Himalaya: Geoecological Perspective” Edited by: Joshi SC. Himalayan Research Group, Nainital, India; 1986:163-173. quoted in Kunwar and Bussmann (2008) de Silva, T. (1997) “Industrial utilization of medicinal plants in developing countries” in: Bodekar, G., Bhat, K.K.S., Burley, J., Vantomme, P. (Eds.), Medicinal Plants for Forest Conservation and Healthcare, pp. 38–48 (Nonwood Forest Products,No.11. FAO, Rome, Italy). Dhar, U.; Rawal, R.S.; Upreti, J. (2000) “Setting priorities for conservation of medicinal plants - a case study in the Indian Himalaya”- Biological Conservation 95 57±65 Dobriyal, R.M., Singh, G.S., Rao, K.S., Saxena, K.G., (1997) “Medicinal plant resources in Chhakinal Watershed in the north western Himalaya: traditional knowledge, economy and conservation”- Journal of Herbs, Spices and Medicinal Plants 5, 15–27. quoted in Poonam and Singh 2009 Franz, C. (1993) “Domestication of wild growing medicinal plants’ Plant Research and Development 37, 101±111. Quoted in Dhar et al (2000) Gaudel, Y.S. (2006) – “Remittance Income in Nepal: Need for Economic Development” - The Journal of Nepalese Business Studies Vol. III No. 1 Ghimire, M. and Bhat, B.R. (2003) “Empowerment of Tharu Indigenous Knowledge” in Haverkort B., van’t Hooft, K., Hiemstra, W (eds) (2003) “Ancient Roots, new Shoots – Endogenous Development in Practice” - ETC/Compas in association with Zed Books Ltd. ISBN 1 84277 334 8 cased; ISBN 1 84277 335 6 limp Grunwald, J. (1994) “The European Phytomedicines Market: Figures, Trends, Analyses”- HerbalGram, 34: pp. 60-65. Quoted in Holley and Cherla, (1998) Gupta, A.; Vats, S.K.; Brij Lal, (1998) “How cheap can a medicinal plant species be?” Current Science 74, 555±556. Quoted in Dhar et al (2000)

Page 56 of 60 Chapter 7: Conclusions and Recommendations

Hamilton, A.C. (2004) “Medicinal plants, conservation and livelihoods”- Biodiversity and Conservation 13: 1477–1517 Haverkort B., van’t Hooft, K., Hiemstra, W (eds) (2003 ) “Ancient Roots, new Shoots – Endogenous Development in Practice” - ETC/Compas in association with Zed Books Ltd. ISBN 1 84277 334 8 cased; ISBN 1 84277 335 6 limp Haverkort, B, van’t Hoft, K. and Hiemsta, W (2003) -“Ancient Roots, New Shoots – Endogenous development in practice” –published by ETC/Compas in association with Zed Books Ltd.- www.compasnet.org Holley, J. and Cherla, K. (1998 ) “The Medicinal Plants Sector in India: A Review” – IDRC Canada Kala , C. P.; Dhyani, P.P. and Sajwan, B. S. (2006) “Developing the medicinal plants sector in northern India: challenges and opportunities” - Journal of Ethnobiology and Ethnomedicine, 2:32 Lacuna-Richman, C. (2002) “The socio-economic significance of a subsistence nonwood forest products in Leyte, Philippines” - Environmental Conservation 29, 253–262. quoted in Poonam and Singh 2009 Lange, D. (2006) “International Trade In Medicinal And Aromatic Plants - Actors, Volumes And Commodities” in Bogers, R.J.;Craker, L.E.; Lange, D. (Eds.) (2006) Volume 17 “Medicinal and Aromatic Plants: Agricultural, Commercial, Ecological, Legal, Pharmacological and Social Aspects”309 pp. Springer Dordrecht http://library.wur.nl/ojs/index.php/frontis/issue/view/232 Levine, N. E. (1987) Caste, State, and Ethnic Boundaries in Nepal -The Journal of Asian Studies, Vol. 46, No. 1, pp. 71-88 Lozoya X: (1994) “Ethnobotany and the Search of New Drugs” England: John Wiley and Sons quoted in Kala et al 2006 Lucas, R. E. (1988) “On the mechanics of economic development” - Journal of Monetary Economics, Volume 22, Issue 1, July 1988, Pages 3-42 Maillat, D. (1998) “Interactions between urban systems and localized productive systems: An approach to endogenous regional development in terms of innovative milieu” - European Planning Studies, 6: 2, 117 — 129 Olsen C. S. and Bhattarai N. (2005) “A Typology of Economic Agents in the Himalayan Plant Trade” - Mountain Research and Development Vol 25 No 1: 37–43 Olsen, C. S., and Helles, F. (1997) “Making the poorest poorer: Policies, laws, and trade in medicinal plants in Nepal” –Journal of World Forest Resource Management 8: 137-158 quoted in Wagner et al 2008 Rao, M.R., Palada, M.C. and Becker, B.N. (2004) “Medicinal and aromatic plants in agroforestry systems” - Agroforestry Systems 61, 107–122. Ray, C. (1999) “Towards a meta-framework of endogenous development: repertoires, paths, democracy and rights” - Sociologia Ruralis 39 (4) pp. 521 –537 Shrestha, N.R.; Raja P.V. and Conway, D. (1993) “Frontier Migration and Upward Mobility: The Case of Nepal”- Economic Developmetn and Cultural Change, 41(4): 878-816 quoted in Barber et al 1997 Wagner, A.; Kriechbaum, M. and Koch, M. A. (2008 )- “Applied Vulnerability Assessment of Useful Plants: A case study of Tibetan Medicinal Plants from Nepal” - Bot. Jahrb. Syst. 127; 3 1-29 Poonam, K. and Singh G.S. (2009) “Ethnobotanical study if medicinal plants used by the Taungya community in Terai Arc Landscape, India” –Journal of Ethnopharmacology 123; 167-176

Page 57 of 60 Chapter 7: Conclusions and Recommendations

Kunwar, R. M. and Bussmann, R.W. (2008) “Ethnobotany in the Nepal Himalaya” Journal of Ethnobiology and Ethnomedicine 4:24

FAO (1994) - International trade in non-wood forest products: An overview; Working Paper - http://www.fao.org/docrep/x5326e/x5326e0e.htm National Planning Commission (2007) Three-Year Interim Plan- Approach Paper- (2064/65-2066/67) http://www.npc.gov.np/uploads/publications/20081228111723.pdf Lewington, A. (1993) “A review of importation of medicinal plants and plant extracts into Europe” WWF International Plant Programme/IUCN. Quoted in FAO (1994) Gurung, H (1996) “Ethnic Demography of Nepal” Paper presented at a talk programme organized by Nepal Foundation for Advanced Studies (NEFAS), Kathmandu http://www.nepaldemocracy.org/ethnicity/ ethnic_demography.htm Web sites http://mld.gov.np/eng/ http://www.ansab.org http://www.ayurveda.com http://www.cbs.gov.np/ http://www.compasnet.org http: // www.dof.gov.np http: // www.forwardnepal.org http: // www.mld.gov.np http: // www.swannepal.org http://www.emi.com.np/main/ http://www.secardnepal.org http://www.crystalvisioniltd.com http://www.bisepst.org.np/new/index.html http://lcweb2.loc.gov/frd/cs/profiles/Nepal.pdf http://www.nytimes.com/2010/05/08/world/asia/08nepal.html http://siteresources.worldbank.org/datastatistics/resources/gnipc.pdf https://www.cia.gov/library/publications/the-world-factbook/geos/np.html

Page 58 of 60 Chapter 7: Conclusions and Recommendations

Bibliography

Edwards DM. 1996. The trade in non-timber forest products from Nepal. Mountain Research and Development 16:383–394. Quoted in Olsen and Bhattarai (2005) Granato, J.; Inglehart, R. and Leblang, D. (1996) The Effect of Cultural Values on Economic Development: Theory, Hypotheses, and Some Empirical Tests; American Journal of Political Science, Vol. 40, No. 3, pp. 607-631 Haverkort, B and Rist, S (2004) - Towards Co-evolution of knowledges and sciences: No shortcut in integrating local and global knowledge- Paper for the Compas panel in the conference: Bridging Scales and Epistemologies: Linking Local Knowledge with Global Science in Multi-Scale Assessments - http://ma.caudillweb.com/documents/bridging/papers/haverkort.bertus.pdf Kunwar RM (2006) Non-timber Forest Products of Nepal: A Sustainable Management Approach Centre for Biological Conservation, Nepal and International Tropical Timber Organization, Japan; quoted in Kunwar and Bussmann (2008) Kunwar, R.M.; Uprety, Y.; Burlakoti, C.; Chowdhary, C.L.; and Bussmann, R.W. (2009) --Indigenous Use and Ethnopharmacology of Medicinal Plant-Ethnobotany Research & Applications 7:005-028 Murty TK. (1993) Minor Forest Products of India. Delhi, India: Oxford and IBH. Quoted in Olsen and Bhattarai (2005) Salick, J.; Byg, A; Amend, A., Gunn, B., Law, W; and Schmidt, R. (2006 ) Tibetan medicine plurality. Economic Bot. 60 (3): 227-253. Schumpeter, J. A.(2003) -The Theory of Economic Development in The European Heritage in Economics and the Social Sciences; Volume 1, pages 61–116. Kluwer Academic Publishers Shrestha, K. K., Tiwari, N. N., & Ghimire S. K. (2000) MAPDON -Medicinal and aromatic plant database of Nepal.-In: Society for the Conservation and Development of Himalayan Medicinal Resources, Japan, and Ministry of Forests and Soil Conservation, HMGI Nepal, Department of Plant Resources (eds.): Proceedings of the Nepal-Japan Joint Symposium on Conservation and Utilization of the Himalayan Medicinal Resources, 53.74. -Kathmandu. HMGN (1970) Buletin of the Department of Medicinal Plants No.3 Medicinal plants of Nepal - HMGN ministry of Forest, Department of Medicinal Plants, Thapathali; Kathmandu; Nepal 1970 Shrestha KK, Rajbhandary S, Tiwari NN, Poudel RC, Uprety Y (2004) . “Ethnobotany in Nepal: Review and Perspectives” WWF Nepal Program and Ethnobotanical Society of Nepal, Kathmandu; quoted in Kunwar and Bussmann (2008) Subedi, B.P. (2004) “Linking plant based enterprises and local community to biodiversity conservation in Nepal Himalaya”

Web sites http://en.wikipedia.org/wiki/Abelmoschus http://en.wikipedia.org/wiki/Abutilon_indicum http://en.wikipedia.org/wiki/Acacia_nilotica

Page 59 of 60 Chapter 7: Conclusions and Recommendations http://en.wikipedia.org/wiki/Aloe_vera http://en.wikipedia.org/wiki/Calendula_officinalis http://en.wikipedia.org/wiki/Cleistocalyx_operculatus http://en.wikipedia.org/wiki/Cymbopogon http://en.wikipedia.org/wiki/Cymbopogon_martinii http://plants.usda.gov/java/profile?symbol=CYES http://plants.usda.gov/java/profile?symbol=MEAR4 http://www.eol.org/pages/585501 http://www.msinp.com/herbs/citronel.htm

Page 60 of 60

ANNEXES

Notes: In Annex 2, the survey data is presented. The names of the respondents were replaced by an identification code to maintain privacy. The open ended questions and those that could not be coded into quantitative variables are not in the table. Gender is coded in 1 for female and 0 for male. In all the other cases, 1 means “true” while 0 is “false”. For Annex 3, the transcripts were minimally adjusted. The researcher tried to use as much as possible the original phrases and intervened by slightly improving the English, whiteout changing the meaning. Moreover, for a improving the understanding of the reader, the researched added footnotes and extra information in between brackets. Nepali people have their own calendar. In the transcripts was kept the date the people supplied, and in brackets it is added the date according to Gregorian Calendar.

Page 2 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

demulcent, aphrodisiac, laxative, diuretic, pulmonary and sedative (leaves). The Abutilon atibalaa/ thuthi/ Indian Abutilon/ bark is astringent and diuretic; laxative, expectorant and demulcent (seeds); 1 Malvaceae indicum Sweet duvvena kayalu Indian Mallow laxative and tonic, anti-inflammatory and anthelmintic (plant); analgesic (fixed oil); diuretic and for leprosy (roots)

gum arabic tree/ Acacia nilotica babul/ Egyptian demulcent or for conditions such as gonorrhoea, leucorrhoea, diarrhea, 2 (L.) Willd. ex babul Leguminosae thorn/ or prickly dysentery, or diabetes. It is styptic and astringent Delile acacia

Achyranthes diuretic, laxative, expectorant, carminative, stomachic, anti-inflammatory, 3 datium Devil's horsewhip Amaranthaceae aspera L. haematinic

Acorus dyspepsis; colic; remittent fever; bronchitis; dysentery; chronic diarrhrea; 4 bojho/ vachaa sweet flag Acoraceae calamus L. headache; cough

Aegle elephant apple; 5 marmelos (L.) bel/ shreephal baeltree/ bengal Rutaceae laxative;costipation; dyspepsia; astringent; fever; antiniotic properties; aromatic Correa quince Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

stomachic; cooling; alterative; purgative; piles; eye disease;vomiting; hair loss; Aloe vera (L.) 6 ghiukumari aloe vera Liliaceae lower blood sugar; iver, colon, uterus, as well as ulcers and Burm.f. hemorrhoids.bronchial congestion; arthritis;skin diseases

Alstonia devil’s tree/ ditta 7 scholaris (L.) chatium /chhativan Apocyaneae fever, malarial fever, diarrhea, dysentery, leprosy, skin diseases, ulcers bark tree R. Br.

Amaranthus kataraiya/Ban lude/ 8 prickly amaranth Amaranthaceae diuretic, colic pain and leucorrhoea spinosus L. Kade lude

Andrographis Green paniculata chirayita/green bitter tonic, malarial and intermittent fever, worms, dysentery, wounds, ulcers, 9 kalmeg/ teetakaa Acanthaceae (Burm. f.) chiretta/ creat/ cough, bronchitis and liver disorders Wall. ex Nees creyat root

Artemisia stomachic, purgative, deobstruent, antispasmodic, anthelmintic, insecticide, and 10 artimesia/ titepati Mug-wort Compositae indica Willd. prescribed in infusion and electuary in cases of obstructed menses and hysteria.

Artemisia

11 pallens Wall. dhavanam n/a Asteraceae The leaves and flowers yield an essential oil known as oil of Davana. ex DC.

Page 4 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Asparagus diuretic, aphrodisiac, tonic, appetizer, carminative, antispasmodic, 12 racemosus kurilo/ Satawar wild asparagus Liliaceae galactogogue, and astringent; Tuberculosis, cough bronchitis, diarrhea, Willd. dysentery and general debility.

Neem tree/ Indian antibiotic activity; brush teeth; tootache; gum; bad breath; tonic; astringent; Azadirachita 13 nim/neem lilica/ Margosa Meliaceae fever; skindisease; Skin diseases, intestinal worms, ulcers, malarial and indica A. Juss. tree intermittent fever, liver complaint and diabetes.

Mountain ebony/ Bauhinia alterative, tonic and blood purifier, diarrhea, dysentery, piles and liver 14 koiralo Variegated Leguminosae variegata L. complaints. Bauhinia

diuretic; laxative; astma; dropsy; jaudice; intestinal inflamation; gonorrhea; eye Boerrhavia 15 punarnava Nyctaginaeae disease; Inflammations, leucorrhoea, scabies, cardiac disorders, jaundice, diffusa L. anemia, constipation, cough and bronchitis.

skin disorders and pain, and as a bactericide, antiseptic and anti-inflammatory. Calendula The petals and pollen contain triterpenoid esters (an anti-inflammatory) and the 16 marigold Marigold Asteraceae officinalis L. carotenoids flavoxanthin and auroxanthin (antioxidants, and the source of the yellow-orange coloration).

Velvety Beauty arthritis; gout; excessive sweating; fever and headache; ulcerous; The flowers Callicarpa Berry/ French- are used for its oil preparation, which promotes the growth of hair. The seeds 17 daichamale/ priyangu Verbenaceae macrophylla Mulberry of are cooling, astringent, anti-diarrhoeal, constipation, alleviate pitta and kapha Western Ghats doshas and are flatulent.

Page 5 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Calotropis giant milk weed/ purgative, anthelmintic, cures leprosy, leucoderma, ulcers, tumors, and piles, 18 gigantea L. aank Gigantic swallow- Asclepiadaceae disease of the spleen, the liver and the abdomen. (Aiton) wort

Centella syphilis, leprosy and skin diseases, mental weakness and memory, diuretic, 19 asiatica (L.) bram/ ghodtarpe water pennywort Umbelliferae insecticide. Urban

Cinnamomum kapur; pachai diarrhoea; rheumatisml muscular pain; pneumonia;insect repellent and a flea- 20 camphora (L.) champhortree Lauraceae karpooram killing substance. Sieb.

Cleistocalyx 21 operculatus kyamuno n/a Myrtaceae stomachic properties (Roxb.) Merr..

Curculigo phrodisiac, alternative, appetizer, fattening and useful in treatment of piles, 22 orchioides musali/ kali musli black musali Hypoxidaceae biliousness, fatigue, blood related disorders Gaetrn.

Curcuma blood purifier;skin disease; antiseptic for cuts, burns and bruises. It is also used 23 longa turmeric/harida/haledo n/a Zingiberaceae as an antibacterial agent. treatment of flatulence, jaundice, menstrual Linnaeus difficulties, hematuria, hemorrhage, and colic

Page 6 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Cymbopogon 24 pireghas lemongrass Poaceae n/a citratus

Cymbopogon Palmarosa; Indian 25 martinii palmarosa Poaceae insect repellent; antihelmintic against nematodes, antifungal geranium (Roxb.) Wats.

Cymbopogon citronella oil are antiseptic, bactericidal, deodorant, diaphoretic, insecticide, 26 nardus (L.) n/a Citronella Gras Poaceae parasitic, tonic and stimulant. Rendle

anti-infectious, antiseptic, antibacterial, antidepressant, antispasmodic, anti- Cymbopogon inflammatory, deodorant, diaphoretic fungicidal, insect repellent (mosquito), 27 winterianus citronella Poaceae stomachic, excessive perspiration, oily skin and hair, room deodorizer, Jowitt. rheumatism and arthritic pain

Cyperus earth almond/ 28 chufa Cyperaceae preventing heart attacks, thrombosis and activates blood circulation esculentus L. tiger nut

Drymaria cordata West Indin 29 avijalo Caryophyllaceae antidote; appetizer; depurative; emollient; febrifuge; laxative; stimulant. (L.)Willd. ex Chickweed Schult. Eclipta bhiringaraj/ bhangeri Tonic and deobstruent in the enlargement of the liver and spleen and various 30 prostrata (L.) Trailing eclipta Compositae jhar chronic skin diseases and wounds, glandular swelling and elephantiasis. L.

Page 7 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

treats infections in teeth and gums, to prevent and treat throat troubles, Elettaria congestion of the lungs and pulmonary tuberculosis, inflammation of eyelids 31 alaichii/ ilaayachee cardamom Zingiberaceae cardamomum and also digestive disorders. It also is used to break up kidney stones and gall stones, stomach-aches, constipation, dysentery,

Aperient, carminative, diuretic, aphrodasiac, laxative, astringent and refrigerant. It is the richest known source of vitamin 'C'. It is useful in anaemia, jaundice, Emblica dyspepcia, haemorrhage disorders, diabetes, asthma and bronchitis. It cures 32 amala Indian Gooseberry Euphorbiaceae officinalis insomnia and is healthy for hair. It is considered as one of the most rejuvenating drugs, imparting a long healthy life and weight gain. It also acts as an antacid and antitumorganic agent.

The root and bark of Gmelina arborea are stomachic, galactagogue laxative and Beechwood/ Gmelina anthelmintic; improve appetite, useful in hallucination, piles, abdominal pains, 33 khamari Gmelina/ Goomar Lamiaceae arborea Roxb. burning sensations, fevers, 'tridosha' and urinary discharge. Leaf paste is applied teak/ Kashmir tree to relieve headache and juice is used as wash for ulcers.

an antidote for snakebites; an emulsion from the seeds is considered to be anti- Hibiscus 34 muskdana hibiscus Malvaceae spasmodic and is used externally.Extensively used as an insecticide and a abelmoschus aphrodisiac.

Justicia Used for the drug Vasaka: leaves contain the alkaloid vasicine and essential oil. 35 assuro Malabar nut tree Acanthaceae adhatoda L. Mainly used in cough and bronchitis.

Justicia Used for the drug Vasaka: leaves contain the alkaloid vasicine and essential oil. 36 asuro Malabar nut tree Acanthaceae adhatoda L. Mainly used in cough and bronchitis.

Page 8 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Leucas Stimulant, diaphoretric, laxative, anthelmintic, antiseptic and insecticidial, 37 cephalotes gumpati/ dronpuspi thumbe Labiatae coughs and colds, scabies. (Roth) Spreng. Mallotus philippensis Skin diseases. Kamela drug: intestinal parasites such as tapeworms and round 38 sindur Kamela tree Euphorbiaceae Lam.) Muell.- worms. Arg.

Matricaria tonic, stomachic, anodyne, antispasmodic, laxative, diaphoretic, analgesic, 39 camomile chammomile Asteraceae chamomilla carminative, anti-inflammatory, sedative

Melia persiac lilac/ bead 40 bakaino Meliaceae Insect-repellant, cathartic, emetic, anthelmintic azedarach L. tree

Oil is good for the nervous system, acting as a regulator and sedative: Menthol Metha wild mint/ Field is well known as a cardiac tonic in pharmaceutical preparations. It is a good 41 mentha/ pepermint Lamiaceae arvensis L. Mint blood cleanser. Because it is antiseptic and anti-bacterial, it can be used in swollen gums, mouth wash or mouth ulcers, toothache.

Mimosa Iajjaweti/ lajjabati/ kidney diseases, piles and fistula, asthma, fever, cough, dysentery, vaginal and 42 sensitive plant Leguminosae pudica L. lajwanti/ buharijhar uterine ailments

Page 9 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

The leaves are antibacterial, antiinflammatory and anthelmintic. Further, a dye extracted from the corolla tube is used to lend colour to Tussore Silk. The Nyctanthes Night-flowering 43 parijat/ parijata Oleaceae flowers are bitter astringent, opthalmic, stomachic and carminative. It is an arbor-tristis L. Jasmine expectorant, bitter and tonic, febrifuge, and mild purgative. It is used in bilious and obstinate remittent fever, sciatica, and rheumatism.

Ocimum tenuiflorum 44 tulsi /tulasi holy basil Lamiaceae expectorant; bronchitis; earache; malarial fever; skin disease; insecticide (Ocimum sanctum)

Oroxylum tatahalo/ tatelo/ Indian trumpet astringent, cooling , tonic and increases appetite, useful in diarrhea and 45 indicum (L.) Bignoniaceae karamkanda tree dysentery, acute rheumatism. Kurz

chronic bronchitis; tonic, abdominal pain, diseases of the spleen, asthma, 46 Piper Longum pipla/pipala/ murjhang long peper Piperaceae hoarseness and hiccup

Rauvolfia Indian snakeroot/ 47 sarpaganda Apocynaceae hypertension, nervousness and insomnia, mental disorders. serpentina L. serpentwood

antiseptic; antispasmodic; astringent; cardiac; carminative; cholagogue; Rosmarinus 48 rosemary rosemary Lamiaceae diaphoretic; emmenagogue; nervine; Ophthalmic; Stimulant; Stomachic; officinalis L. Tonic.

Page 10 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Sapindus 49 ritha/rittha Soapnut Sapindaceae salivation; cholorosis; epilepsy Mukorossi

Sesamum 50 Indicum Til sesame Pedaliaceae astringent; diuretic; emollient; galactogogue; lenitive; nutritive; skin; tonic. LINN.

Solanum kaligedi/ kalobihi/ Poultice over rheumatic and gouty joints. Cirrhosis of liver, sedative, alterative, 51 black nightshade Solanaceae nigrum L. kuwain diuretic, and expectorant.

bastard Terminalia myrobolan/ bellirica Laxative, indigestion and diarrhea; antipyretic; leprosy, piles, fever; part of 52 barro belliric Combretaceae (Gaertn.) Ayurvedic preparation Triphala. myrobolon/ bedda Roxb. nuts

chebulic Terminalia cardiotonic; ulcer; laxative; diseases of the spleen, piles and cold, cures bleeding 53 harro myrobolon/ black Combretaceae chebula Retz. and gum ulcerations myrobolon

Tinospora treating piles, ulcerated wounds, liver complaints, chronic rheumatism and also 54 sinensis gurjho Menispermaceae as muscle relaxant. (Lour.) Merr.

Page 11 Annex 1: Medicinal plants

No. Latin Name Local name English name Family Uses

Valeriana spp. rherumatism and dilocation of joints; Hysterical fits, nervous disorders, 55 Hardwickei suganda/ sugandwal Indian valerian Valerianaceae flatulence; and jatamansi

Withania 56 somnifera (L.) ashwagandha Indian ginseng Solanaceae aphrodisiacs, diuretics and for treating memory loss; sedative Dunal

Zingiber stimulant and carminative, and used frequently for dyspepsia, gastroparesis, 57 officinale aduwa ginger Zingiberaceae slow motility symptoms, constipation, and colic. It was also frequently Roscoe employed to disguise the taste of medicines.

Page 12 Annex 2: Survey data

Cultivators

Quest No of fam ily Family m embers working Education MP present in 1st reason for Gender Age MPC knowledge source ID me mbers with MP level homegarden MPC Q1 0 30 2 1 high school 7 working in the farm income Q2 0 61 11 2 literated 75 DFO and NGO awareness Q3 1 26 4 2 high school 8 government training healing Q4 1 45 5 1 literated 4 Cristal Nepal income parents; tradition; Cristal Q5 0 43 4 2 high school 5 income Nepal Q6 1 48 7 2 10 grades 1 parents, Cristal Nepal income Q7 1 40 4 2 10 grades 2 Cristal Nepal income Q8 1 30 6 1 10 grades 2 Cristal Nepal income Q9 1 40 10 1 literated 2 Cristal Nepal income cooperative + Crystal Q10 1 59 13 3 literated 8 income Nepal Q11 1 38 3 1 high school 1 Cristal Nepal income Q12 0 42 4 1 literated 3 Cristal Nepal income Q13 0 52 5 2 MSc 4 literature review less labour Q14 0 55 7 2 literated 1 learned on farm income Q15 1 65 11 2 10grades 3 other farmers healing environ, Q16 0 65 2 1 high school 24 German partner conservation Q17 0 41 4 2 intermediate 7 organisation conserv ation Q18 0 60 5 1 high school 4 books, ayurvedic doctor income I4 0 50 5 1 literated 2 3 years income I5 0 57 10 1 literated 2 coop- organic farming income Annex 2: Survey data

Quest No of fam ily Family m embers working Education MP present in 1st reason for Gender Age MPC knowledge source ID me mbers with MP level homegarden MPC I6 1 30 4 2 literated 1 coop- organic farming income I7 0 38 5 2 literated 1 Shyam Hada income I8 1 46 5 1 intermediate 3 Swabiman income I10 0 46 6 1 literated 4 DFO income I11 0 34 6 1 intermediate 5 no help income I12 0 70 9 1 literated 2 trainings, ayurvedic doc healing I13 0 76 5 1 literated 3 business man less labour I14 0 41 5 1 high school 22 tradition; farmers healing

Quest ID MP consumption Initial no. of MP No. of MP now MP wild harvest Employ for MPC MP initial land MP land now Total land owned

Q1 0 7 7 0 1 8 ha 8 ha 8 ha Q2 1 5 200 0 1 5 katha 120 katha 150 katha Q3 1 3 8 0 1 2 katha 5 katha 1 bigha Q4 1 3 3 0 1 2 bigha 2 bigha 0 Q5 1 3 5 1 1 1 bigha 5 bigha 1 bigha Q6 1 1 1 0 0 1 katha 1 katha 10 katha Q7 0 2 2 0 1 4 katha 4 katha 24 katha Q8 1 1 2 0 0 2 katha 2.5 katha 10 katha Q9 1 2 1 0 0 1 katha 1 katha 6 katha Q10 1 2 4 1 0 1 katha 1 katha 30 katha Q11 1 1 0 0 1 2 katha 0 5 bigha Q12 1 3 2 0 0 2 katha 1.5 katha 1 bigha Q13 0 3 4 0 1 3 ha 12 ha 12 ha

Page 14 Annex 2: Survey data

Quest ID MP consumption Initial no. of MP No. of MP now MP wild harvest Employ for MPC MP initial land MP land now Total land owned Q14 0 1 1 0 1 8 ha 8 ha 8 ha Q15 1 1 3 0 1 1 bigha 1 bigha 6 bigha Q16 1 100 35 1 1 4 acres 9 ha 9 ha Q17 1 25 25 0 0 3 katha 3 katha 1 bigha Q18 1 1 3 0 1 4 katha 1 bigha 1 bigha I4 0 2 0 0 0 3 katha 0 n/a I5 0 3 3 0 0 1.5 katha 1.5 katha 1 bigha I6 0 1 1 0 0 1 katha 1 katha 8 katha I7 0 1 1 0 0 3 katha 3 katha 2 bigha I8 0 1 1 0 0 0.5 katha 0.5 katha 5 katha I10 0 4 4 0 0 4 katha 4 katha n/a I11 0 5 5 0 0 1 katha 1 katha n/a I12 1 2 2 1 0 6 katha 6 katha 36 katha I13 1 2 3 0 0 5 katha 7 katha 2 bigha I14 1 22 22 0 0 3.5 katha 3.5 katha n/a

Initial Quest Current expenses Income %MP in total Sell MP investment Other sources of income Sell MP raw Processing ID (Rs) after MPC income processed (Rs) Q1 15,000,000 don't know higher 0% 0 1 1 dry, essential oil Q2 20,000 150,000 same 100% 0 1 1 4 Q3 10,000 7,000 higher 15% job, sell agric prod 1 1 3 dry, cut, package Q4 don't know 0 higher 100% 0 0 1 tea Q5 300,000 100,000 higher 60% pension 1 1 cut, dry Q6 5,000 0 higher 0% job, sell agric prod 1 0 dry

Page 15 Annex 2: Survey data

Initial Quest Current expenses Income %MP in total Sell MP investment Other sources of income Sell MP raw Processing ID (Rs) after MPC income processed (Rs) Q7 24,000 35,000 higher 20% sell agric prod 1 1 cut Q8 3,000 3,000 higher 5% sell agric prod 0 1 cut, dry Q9 3,000 1,000 higher 5% sell agric prod 0 1 cut, dry Q10 5,100 0 higher 20% job, sell agric prod 0 1 cut, dry Q11 1,100 higher 5% job, sell agric prod 0 1 cut, dry

Q12 4,000 3,000 higher 5% job, sell agric prod 0 1 cut, dry sell agric prod; other Q13 600,000 100,000 higher 50% 0 1 essential oil companies Q14 don't know 0 exp 0% 0 0 0 seeds, parts Q15 150,000 50,000 higher 0% pension 0 1 cut, dry Q16 20,800 10000 Euro lower 0% pension 0 1 cut, dry, package Q17 0 0 higher 35% job, farming 1 0 cut, dry Q18 10,000 2000/ katha /season higher 60% job, pension, business 1 0 cut, dry I4 0 higher 0% shop 1 0 cut, dry

I5 <1000 don't know exp 0% job, pension, farming 0 0 0 I6 <1000 don't know exp 0% farming 1 0

I7 <1000 don't know exp 0% farming 1 0

I8 <1000 0 exp 0% shop, farming 1 0 cut I10 <1000 don't know exp 0% farming 0 0

I11 5,000 seedlings exp 0% remittances, farming 0 0

I12 0 don't know exp 0% selling medicine, farming 0 1 cut, dry, medicine I13 0 don't know higher 0% pension, farming 1 0 cut, dry I14 0 0 exp 0% shop, farming 0 0 cut

Page 16 Annex 2: Survey data

Share info Affiliation Quest Organisation Type of sale Buyers MPC problems with other to ID help farmers organisation Q1 wholesale Kathmandu don't know 0 0 0 Q2 en detail villagers, CF, etc compost fertilizer, org insecticide, seed 1 1 0 Q3 en detail villagers market 1 0 0 Q4 wholesale Cristal Nepal competition prices - Indian products cheaper 1 1 Cristal Nepal Cristal Nepal, Herbal Q5 wholesale market 1 1 Cristal Nepal International no security of sale - too much supply Q6 wholesale Cristal Nepal 1 1 Cristal Nepal sometimes Q7 wholesale Cristal Nepal no market 1 1 Cristal Nepal Q8 wholesale Cristal Nepal machinery 1 1 Cristal Nepal Q9 wholesale Cristal Nepal machinery to harvest; market 1 1 Cristal Nepal Q10 wholesale cooperative market 1 1 Prassidi Q11 wholesale Cristal Nepal no seed 1 1 Cristal Nepal Q12 wholesale Cristal Nepal no mention 1 1 Cristal Nepal Q13 wholesale different companies limited info, farmer's learning is slow 0 1 0 Q14 wholesale Don’t know no problem; needs irrigation 0 0 0 Q15 wholesale Dambar Gurung market 0 1 0 Q16 wholesale Kathmandu adequate customer- market 0 1 0 Q17 wholesale& en detail District Ayurvedic Centre low production because of no time 1 1 0 Q18 wholesale Cristal Nepal market; knowledge 1 1 Cristal Nepal I4 wholesale Cristal Nepal market- could not sell 1 1 Cristal Nepal I5 wholesale Shyam Hada trial- don't know yet 1 1 Fulbari I6 wholesale Shyam Hada trial- don't know yet 1 1 Fulbari I7 wholesale Shyam Hada trial- don't know yet 1 1 Fulbari I8 wholesale Swabiman trial- don't know yet 1 1 Swabiman I10 Don’t know DFO pest; land management 1 1 Fulbari

Page 17 Annex 2: Survey data

Share info Affiliation Quest Organisation Type of sale Buyers MPC problems with other to ID help farmers organisation I11 en detail DFO -little nursery 0 1 0 I12 en detail coop cultivation, irrigation 1 1 Prassidi I13 wholesale coop market- could not sell 1 1 0 I14 wholesale coop market; knowledge 1 1 Swabiman

Page 18 Annex 2: Survey data

Non-cultivators

Owned Number Medicinal land Initial Start Reason for Necessary for Reasons for ID Sex Age land of family plants in for investment MPC considering MPC MPC rejecting MPC (katha) members homegarden MPC (per katha) income, medicinal 1 0 35 1.0 6 0 1 1 training, money 7000 inappropriate purpose training, seeds, 2 0 67 5.0 3 2 1 money, suitable land 5 3000 inappropriate market training, home lack of 3 1 50 2.5 7 2 0 money 0 0 support knowledge importance of training, lack of 4 0 37 5.0 5 1 0 5 6000 medicinal plants market study knowledge if technical support lack of trust in 5 1 27 7.0 4 0 0 0 training, labour 0 exists companies 6 1 33 1.4 5 1 1 money 1.4 training, money -1 inappropriate no land; market 7 0 51 1.0 4 2 0 - 0 training 0 problems training, lack of money, own money, 8 1 72 2.0 5 1 0 0 0 knowledge, consumption community market problems approach lack of 9 1 27 50.0 24 1 0 money 0 trainings 0 knowledge training, 10 1 60 7.0 1 1 0 money 0 0 not enough land labour, money importance of training, lack of 11 0 44 7.0 4 8 0 0 0 medicinal plants market study knowledge 12 1 22 40.0 8 4 1 money 1.5 training 3000 inappropriate

Page 19 Annex 2: Survey data

Owned Number Medicinal land Initial Start Reason for Necessary for Reasons for ID Sex Age land of family plants in for investment MPC considering MPC MPC rejecting MPC (katha) members homegarden MPC (per katha ) importance of 13 0 38 10.0 5 2 1 medicinal plants, 2 training, money 5,000 inappropriate money importance of 14 0 36 10.0 4 1 1 medicinal plants, 1 training, money 6000 inappropriate money 15 1 39 8.0 5 3 0 money 0 training 0 n/a money, knows 16 0 36 5.0 5 0 1 1 training, money 3,000 inappropriate successful farmers importance of 17 0 43 8.0 6 2 1 medicinal plants, 1 training, land 3,000 inappropriate money importance of training, 18 0 43 11.0 5 3 1 medicinal plants, 2 labour, market 3,000 inappropriate money study training, 19 0 42 3.0 3 3 1 money, suitable land 2 labour, market 3,000 inappropriate study 20 0 60 15.0 6 3 0 if proper land 0 - 0 not suitable land 21 0 45 20.0 7 4 0 if able to rent land 0 training 0 no available land incompatible 22 0 67 5.0 5 1 0 money 0 training 0 land lack of 23 0 40 40.0 7 3 0 money 0 - 0 knowledge; no interest in MPC lack of 24 1 40 11.0 6 5 0 money 0 labour 0 knowledge

Page 20 Annex 2: Survey data

Owned Number Medicinal land Initial Start Reason for Necessary for Reasons for ID Sex Age land of family plants in for investment MPC considering MPC MPC rejecting MPC (katha) members homegarden MPC (per katha ) training, seeds, 25 0 58 30.0 2 3 1 money 0.5 3,000 inappropriate suitable land land use 26 1 30 5.0 4 0 0 money 0 0 not suitable land management efficient no MPC in 27 0 57 6.0 4 5 0 - 0 0 marketing community importance of training, seeds, 28 0 57 3.0 6 13 1 medicinal plants, 2 5,000 inappropriate money own consumption training, 29 0 30 5.0 4 5 1 money, use bare land 2 labour, market 3,000 inappropriate study no interest in 30 0 78 15.0 6 3 0 - 0 - 0 MPC 31 0 65 2.0 5 4 0 - 0 - 0 not enough land

Page 21 Annex 3: Focus group transcripts

Fulbari Focus Group

Data: 9 th June 2010 (8:30 am – 10:35 am) Location: Fulbari, Fulbari VDC Name of the cooperative: Organic Agricultural Production Cooperative Participants: Chandra Adhikari (M) President of the cooperative Krishna Dawali (M) Secretary of the cooperative Rani Chandra Dawadi (M) Farmer- member of the cooperative Narayan Shrestha(M) Farmer - member of the cooperative Krishna Shrestha (M) Farmer- member of the cooperative Padam Khanal (M) Farmer- member of the cooperative Dvananath Baral (M) Farmer- member of the cooperative

I. History diagram The group was asked to remember important moments in the history of the cooperative, with emphasis on those events related to medicinal plant cultivation. Some clarifying questions were also asked to sketch a more complete picture.

2062 [2005] Bishnu Ghimire, a farmer cultivated camomile on 6 katha and he had a profit of 1 lack [Rs100,000]. He was part of Crystal Nepal; network did not take the camomile form the farmers. For this reason the cooperative has not tried to cultivate camomile, even though they know it has a good production. Due to this bad impression of network marketing there is lack of belief in a good collaboration with them. 2063 [2006] Start to think about medicinal plant cultivation Start of trials with medicinal plants cultivation. 2064 [2007] The cooperative started the process of certification for organic agriculture. They have an agreement (for the next 10 years) to sell organic products with One World Alc 1, managed by Shyam Hada. Along with vegetables, the company is interested also in medicinal plant cultivation. One World [Alc] will help search for market but does not guarantee the sail of the products. One World [Alc] guarantees for the production and the price. If the profit or production was less than that of rice, they will be provided with compensation. Visits to the farm of Shyam Hada in Ghorka District (28 farmers) 2065 [2008] Trail in upland only;

1One World - a learning center is a Nepalese - German Cooperation in bio-dynamic agriculture. The focus of cultivation lies with medicinal herbs, and herbs for teas, as well as with plants with special nutritious values. We are the first and only bio-dynamic farm in Nepal. http://www.oneworld-alc.com/home_en.htm Annex 3: Focus groups transcripts

Several t rial s wit h 4 species: amala, tulsi , aswaganda, sugandhawal , - Chandra Adhikari alone made a trial - For these species a nursery was established: Sugandhawal – was planted in upland, however they discovered they need irrigation. The plants died because of the draught. They also found out that in intense sunshine the plant does not grow. 2066 [2009] Trail with 300 plants of sugandhawal – one world provided seeds for trial; Altogether four farmers made trials on lowland with bojho (Acorus calamus ) and camomile; these plants grew well A second visit to Shyam Hada’s farm in Ghorka District; cooperative organised the visit ; SECARD supported financially; 40 farmers attended the visit and learned about technological aspects of medicinal plant cultivation (Different farmers that in the first visit) 20067 [2010] This year nursery for tulsi ; kurilo; sugandhawal, amala; farmers plan to cultivate these species; where? In farmers fields

Q: Do you use any medicinal plants? Medicinal plants like tulsi have been used for religious and medicinal purposes and home consumption since ancient times. We are confident we know the effectiveness of these medicinal plants and we know that it can be grown successfully in our locality. The only problem is marketing. Q: Are any farmers in your cooperative growing medicinal plants? No farmers before are now are growing medicinal plants. At the moment we are trying in the areas where the yield of known crops is lower. We are using these fields to see if we can make a profit. One of the participants, Krishna Shrestha , voice his doubts : “We are not able to achieve profit in the crops which we have experience (rice, whet, maize); we doubt that we can achieve higher profit in medicinal plants cultivation.” Q: When did you first considered to start growing medicinal plants for commercial purposes? We started thinking about commercial cultivation after meeting with Shyam Hada. We are organic farmers. And because the medicinal plants have to be grown organic, we started to be interested in medicinal plant cultivation. Q: How many people in your cooperative are considering to start medicinal plants cultivation? At the moment 2-3 people will start tulsi cultivation next season. In the beginning there were more people who showed interest in tulsi cultivation. But when the storage problem appeared, they changed their minds. Others are waiting to see what happens. Q: Why is storage a problem? One can sell tulsi only it is dried. So drying the plants in shade becomes a problem. You need a place to dry and we do not have money to build a place to dry tulsi. Most of the farmers have this temporary storage problem. Although initially more farmers were attracted by the expected income of medicinal plants cultivation, several retreated when the problem of storage appeared. The president of the cooperative insists though that Shyam Hada promised to buy the tulsi plants, at a single time after full harvest, so there is no need to worry about storage facilities.

Page 23 Annex 3: Focus groups transcripts

For a short time they will manage at home, under the roof, without constructing any specific storage infrastructure. Q: How do you proceed with the trials? Are they made in a land area that belongs to the cooperative? No, the trials are made on private plots, by innovative and interested farmers. For example, for sugandhawal, a farmer planted six or seven plants. Chandra Adhikari is one of the people that made a trial in lowland. Different people made trials in uplands. Some of the farmers here made trial but also others that are not here now. Q: Where did you get the seeds for the trials? Seed was available from One World [Alc]; The seed was provided free of cost to make trial to start to grow commercially. Q: How do you know how to cultivate medicinal plants? From the visits at the Ghorka farm, for Shyam Hada and our own experience. We had no other trainings. Q: How many people that are here have seen the Ghorka farm? Four people. Q: How do you harvest tulsi ? For the first cut: We cut the small branches and make a bundle. These bundles are hanged in the shade to dry. When they are fry, the leaves fall. The farmer collects the leaves. The second time we cut a few inches higher than the first cut, and the next year you cut high, and so on. The group expects that the tulsi plant will live at least 16 months (and therefore they can cut it four times). After that they will have to replant. Q: Since you have been considering the cultivation of medicinal plants and you started the trials, have the prices of the medicinal plant been increasing or decreasing? We do not know if they were increasing or not. Q: What are, in your opinion, the most difficult problems regarding the cultivation of medicinal plants? The farmers mentioned that the most difficult problems that medicinal plants cultivation raises are the market, storage and trainings [in this order]. Q: Why is market a problem? As the market is the most commonly mentioned problem, this cooperative has the advantage of having an agreement with a company. However, dependency on one buyer is not a very reassuring situation as the group has heard about farmers that although part of Crystal Nepal network they were unable to sell their products. In addition, the group is planning to search for more buyers when they manage to have a stable production. Q: You said that training is a problem. Can you please explain why it is so? Moreover, Shyam Hada visit Fulbari on regular basis and help with the problems concerning the organic production and is also the provider of propagating materials for some of the medicinal species. The person from One World [Alc] visits regularly and gives advice. We expect to have a training soon. Among the participants, four have visited the Ghorka farm. There is no schedule for training, but if they will face problem they will organise training on that issue. From Shyam Hada they know about nursery growing, the spacing of the plants. When they complete the nursery works they expect to have trainings on the marketing and harvest tropic.

Page 24 Annex 3: Focus groups transcripts

Q: What risks do you perceive concerning medicinal plants cultivation? If One World [Alc] does not buy the products like the network marketing, they will search for a new buyer. But they have faith that it will not do something like that. Krishna Shrestra – said that he is afraid that medicinal plants are the same as the organic products, in the sense that inorganic farmers sell better and more, because the inorganic products are more marketable; He is interested in medicinal plants and organic farming because he is health conscious, but he is afraid that they do not sell. He cultivated organically for his family but for the market he cultivates using fertilizers. Dissatisfaction because the organic products do not look as good as the inorganic ones and the farmers are not getting a good price. Due to this reason he stopped the organic vegetable farming due to the market problem. The same problem discourages him to start medicinal plant cultivation. He is still in doubt if to cultivate medicinal plants or not. He asked his son-in-law whether he should cultivate or not. He answered that he knows that his neighbour that planted 1 bigha with tulsi ; harvested the first year but the second year the collector of the plants did not come- he had market problems so he ploughed the tulsi in the field. Chandra said- we are not working with a marketing network, we have a signed agreement with one world to sell the products. I think it is feasible to grow aswagandha and kurilo and tulsi . The president replied referring to the fact that a few years ago, the carrot and the tomato were new crops. That he was the first to start. They are good for the land; the same thing is with medicinal plants. Q: What problems do you expect regarding the medicinal plant cultivation? We know that in Poush- Magh [December -January], the tulsi can be affected by the powdery mildew [disease] so we know that we have to harvest earlier Q: Can you plant other plants next to tulsi ? After the harvest of the tulsi we can plant legumes like pea because the tulsi can act as a stick for the pea plant. Moreover, after the tulsi season, maize can be planted. II. Matrix ranking During the focus group, the farmers were asked to rank the previously mentioned plants according to criteria they consider relevant. The plants are given a rank from one to four, one being the best according to a specified criterion. Table 1 below presents the results of this exercise. Table 1 Matrix ranking exercise with the Fulbari group Plant Criterion Tulsi Kurilo Sugandwal Amala Easy to grow 2 4 3 1 Drought resistance 3 2 4 1 Access to seed 1 3 2 4 Technical knowledge 1 3 4 2 Marketing possibility 2 2 2 1 Profitability 1 2 2 2 Storage 1 2 3 4 Good for the environment 1 4 3 2 Health benefits 1 4 3 2 Diseases and insects 1 3 2 4 Manure requirement 4 2 3 1 Multiple uses 1 3 4 2 Time to maturity 1 3 2 4

Page 25 Annex 3: Focus groups transcripts

“Easy to grow” refers to the fact that the cultivation process is not complicated – the knowledge involved is not so specialized. Amala scores best because as it is a tree, after being planted it just needs water from time to time. Moreover, amala does not need weeding and more interculture 2 it is easy to grow. Kurilo however is much more labour intensive, involving transplantation, constant weeding and watering. The group said that the knowledge they gain from the trials they share and discuss. As amala is a perennial which has deep roots has a good draught resistance and therefore is ranked first. The group expected tulsi to be draught resistant. They do not have irrigation facilities so they hoped that they can cultivate tulsi under their current conditions. Tulsi scored the best under the “Access to seeds” criterion as each farmer on their farm can grow the seeds. Sugandhawal scored second as it can be easily propagated using the roots. The other two plants scored less because it is more difficult to procure good quality of seeds. With “technical knowledge”, the group referred to the knowledge they have acquired through their trials. It should be noted thou that people know more about tulsi at it is traditionally grown and worshiped in every Hindu house. The group agreed that due to lack of technical knowledge, which they find very important, they were less effective in their selection of the plants. By technological knowledge the farmers understood how to grow, how to manage and how to store. “Marketing possibility” refers to the easiness to sell. Amala scores the best because it is not an extensively cultivated but it is an appreciated medicinal plant on the local market 3. Tulsi and kurilo are quite popular medicinal plants among the cultivators and their supply is probably higher on the market. Tulsi takes the shortest time to reaches maturity 4 and be ready to be harvested. Moreover, it can be grown more than one season in one year, so it has the highest profit. For one katha that is planted with tulsi the farmer can obtain Rs5,000 to Rs 6,000 profit. The cost for one katha are around Rs 2,500 to Rs3,000. The group said that because the tulsi is most profitable they chose to grow the plant. The plants got a good score for “storage” criterion the longer the products can be stored. Tulsi can be stored longest while amala has a short storage period. Due to the preoccupation with organic farming, this group is very environmentally conscious. This is why they chose a “good for the environment” criterion when comparing the plants. According to local knowledge and religious belief, tulsi is considered good for the environment as it releases more oxygen. Tulsi was ranked first according to the “health benefits” criterion because it can be used without processing for various illnesses. Tulsi faces fewer pests. Amala faces more insects and diseases, therefore is ranked lower under the “diseases and insects” criterion. Tulsi requires the most manure of all because it is need more nutrients. Tulsi has multiple purposes such as religious, medicinal and environmental. “Time to maturity” refers to the period from planting to harvest and is a very important thing to keep it mind as it directly affects the profitability of the plant. Tulsi requires the least amount of time, as it can be harvested more or less four mounts after transplantation. Sugandhawal requires seven to eight mounts, while kurilo needs at least two years. The worst score is for amala , as it requires around four years before it gives fruits, which are the valuable part of the plant from medicinal point of view At the end of the exercise, the group was asked to rank the criteria, giving the first rank to the most important criterion. The group considered the “easiness to grow” to e the most important criterion,

2 [weeding and hoeing] 3 The group included in the “local market” the village and the market place in Narayanghat, the closest big centre to their village, but also One World Alc. 4 Tulsi can be harvested three months after transplantation Page 26 Annex 3: Focus groups transcripts followed by the “drought resistance”. The third ranked was “market possibility” while the forth “profitability”. The fifth place was occupied by “environmentally friendly” and “health benefits”. The “multiple uses” criterion was ranked six while “manure requirement” occupied the seventh place. “Diseases and insect” was ranked eighth while both “access to seed” and “technical knowledge” were ranked ninth. The last places “time to maturity” and “storage”. It was interesting to note that the group had already discussed this topic quite extensively and they had already agreement, prior to the focus group discussion. The members of the cooperative have monthly meetings were they discuss the subjects of interest.

Page 27 Annex 3: Focus groups transcripts

Prasiddi Focus Group

Data: 9 th June 2010; (1:30 pm- 3:45 pm) Location: Jacauli Name of the cooperative: Prasiddi Jadibuti Cooperative

Participants: Rudrashwor Rai (M) Founder member of Aloe Nepal Rambikam Thakuri (M) President of the cooperative Jajannath Dhikari (M) Secretary of the cooperative Shantalal Bhandari (M) Accountant of cooperative CB Gurung (M) Member of the cooperative Maya Paudel (F) Member of the cooperative Jagat KC (M) Member of the cooperative Sunita Sapkota (F) Member of the cooperative Janabi Paudel (F) Member of the cooperative Baburam Shrestha (M) Member of the cooperative Kalwari Rimal (M) Member of the cooperative

I. History diagram

The group was asked to remember important moments in the history of the cooperative, with emphasis on those events related to medicinal plant cultivation. Some clarifying questions were also asked to sketch a more complete picture.

2020 [1964] Construction of the irrigation canal that passes through the locality 2050 [1983] Jagat KC starts medicinal plant cultivation. He has a friend that is an ayurvedic doctor and he learned from him the importance of medicinal plants. He knows how to make more that 200 medicines using the plants. He prescribes medicines from plants that he makes himself. He helps the poor people by teaching them how to prepare the medicine they need themselves and he does not charge them. 2059 [ 2002 ] Introduction of the mobile phone in the com munity. 2063 [2006] CB Gurung starts commercial cultivation of lemongrass. Motivation for doing this: Faced with the difficulties of traditional agriculture, and being old and he was looking for a crop that is less labour intensive (less work with planting). He met a businessman and he suggested cultivating lemongrass. This is a good plant because at 2 month after planting you can already harvest it; and you keep harvesting every month for five years. He started on his own and then he joined the cooperative (Swyabhiman initially; he became member of Prasiddi because he know the president of this cooperative) He faces market problems at the moment – he cannot sell his lemongrass and therefore he does not harvest it anymore. He is trying to sell his lemongrass through the Swyabhiman cooperative. Before Swyabhiman – there was medicinal plants grown for religious purpo ses :

Page 28 Annex 3: Focus groups transcripts

tulsi , asuro, gurjo Poush 19 th 2065 Swyabhiman Cooperative is formed . Members are fro m: Gunjanagar, Mangalpur [Jan 3 rd 2009] and later the same year from Sardanagar Magh 10 th 2065 Nawaraj Prahadi from Kathmandu comes here, mobilises people to start the [Jan 23 rd 2009] medicinal plant cultivation. He organises a group of farmers from Gunjanagar and Dibyanagar and Mangalpur. These farmers become the core of a new cooperative – Swyabhiman Jadibuti. Some of these farmers start to cultivate tulsi . 2066 [2009] CB Gurung starts experimenting with kurilo cultivation. Baisakh 2066 Agreement between Swyabhiman and EMI 5 for the cultivation of tulsi and [May 2009] lemongrass. Shrawan 10 th 2066 Rudreshor Rai, representative of Aloe Nepal, comes for the first time in Jacauli, [Jul 25 th 2009] through Nawaraj Pahadi and proposed the cooperative to cultivate ghiukumari. He convinces the members of the cooperative that he will provide seedlings and buy all plants. Kartik 29 th 2066 General assembly organised; now the members are from 5 VDC, Gunjanagar, [Nov 15 th 2009] Dibyanagar, Mangalpur, Sardanagar and Fulbari Poush 10 th 2066 Swyabhiman Herbal Cooperative organises a general assembly and registers in [Dec 25 th 2009] 10/02. Before registration, there was an agreement with EMI for the tulsi and lemongrass to sell 10 quintal of lemongrass and 10 tons of tulsi ; out of these only 1 q of lemongrass and 5 tons of tulsi were delivered at this point; the rest was not provided because the cooperatives split Poush 30 th 2066 The Swyabhiman cooperative splits into two cooperatives – Swyabhiman and the [Jan 14 2010] newly formed Prasiddi Jadibuti Cooperative. The new cooperative has 30 members. Magh 2 nd 2066 Registration of Prasiddi cooperative. At this date the number of members has [16 Jan 2010] increased to 45. Baisakh 2067 The members of the cooperative start planting ghiukumari on approximately 1.5 [April–May 2010] bigha. Baisakh 25 th 2067 Aloe Nepal gives training on planting ghiukumari to the members of the [May 8 th 2010] cooperative. Jestha 26 th 2067 Prasiddi cooperative and Aloe Nepal sign the agreement for ghiukumari [June 9 th 2010] cultivation. At this moment the cooperative has 50 members.

Q: Do you know about medicinal plant cultivation? We have traditional knowledge on medicinal plants that cure diseases and their importance in ayurvedic medicine. Q: How much did you pay for the ghiukumari seedlings? The cost of one seedling is Rs12, but we paid 60% in advance, when we bought the seedling and the rest will be paid after the first harvest. This is what our agreement with the company says. Q: At what price will Aloe Nepal buy the ghiukumari plants from the cooperative?

5 EMI- Easy Multitrade International http://www.emi.com.np/main/ Page 29 Annex 3: Focus groups transcripts

It is written in our agreement. If the leaf of the plant is heavier than 250g, the price is Rs15/Kg. If the leaf is less than 250g, the price is Rs12/Kg. This is because the company is interested in the juice of the plant. The size of the leaf increases as the plants ages. Aloe Nepal will be visiting every 3 months to buy the leaves. The cooperative has to take the products (and pay for transportation) to Narayanghat. Then Aloe Nepal is in charge. Q: When will start harvesting? How often will you do it? The first harvest after planting is in 8-12 months. Then you can harvest every 4 months a few leaves from the bottom of the plant. Q: How big do the plants grow? A ghiukumari plant, at maturity can reach 1 m. The plant lives for five years. Q: How many plants can you have in one katha ? Don’t know. Q: How do you become a member of your cooperative? You have to be a citizen here; you have to provide papers that you are a member of this locality. You do not have to grow ghiukumari ; you can start with other crops. Q: How many members of your cooperative have planted ghiukumari ? On how much land on average? Around 25 out of the 5o members have planted. Farmers planted between 0.5 to 7 katha . Most of them have less than 2 katha planted. In total, all the members of the cooperative have planted ghiukumari on more than 1.5 bigha . The total land of the members of the cooperative is around 20 bigha . Q: Have the members of the cooperative attended any training on ghiukumari cultivation? The members attended training on how to plant ghiukumari on Baisakh 25 th . Aloe Nepal gave the training. They provide the technical information. The next training will be on harvest of the plant in a few months. Aloe Nepal will be visiting regularly and provide support. Q: Does ghiukumari require irrigation? Are there irrigation facilities? Ghiukumari needs more water to grow. There are no good irrigation facilities in our locality. That is why not all the members of the cooperative can grow ghiukumari . There is a 46 years old irrigation canal that passes through our locality but it is not good, no water is passing through it. It is not maintained and we cannot use it. But some of the members of our cooperative have pumps and use the underground water for irrigation. Q: Medicinal plant cultivation must be done without any chemicals. Are the members of the cooperative organic? Only the cultivation of ghiukumari is organic at the moment, around 7% of the total land the members of the cooperative own. We plant to switch to organic farming in the future. As a first step we will reduce the input of chemicals. Q: Do you know Danda Pani Kalfe? Yes, he is a member in this cooperative but also of Swyabhiman cooperative. Q: Can you intercrop the ghiukumari with other crops? Jagat KC said that he is considering intercropping ghiukumari with kurilo . But at the moment he is just experimenting in his field to discover the best alignment and space between the plants.

Page 30 Annex 3: Focus groups transcripts

II. Ranking exercise Please compare ghiukumari with the other crops that you grow according with the criteria you consider relevant. Rank the plants according to these criteria, giving the best performing plant the first rank. The plant that performs second best should receive the second rank and so on. You can choose to give the same rank to more than one plant. Matrix ranking exercise with the Prasiddi cooperative group Plant Criterion Rice Maize Wheat Vegetables Ghiukumari Daily consumption 1 3 2 1 4 Profitability 3 5 4 1 2 Type of land 3 1 2 3 4 Labour requirement 3 4 5 1 2 Seed availability 1 1 1 1 2 Manure requirement 2 3 5 1 4 Drought resistance 4 3 1 5 1 Market possibility 1 3 2 4 5

By “daily consumption” the group referred to the fact that the crop is edible. The group ranked rice and vegetables as the most important crops for their diet. Maize is cultivated for feeding animals, and therefore indirectly contributing to the food production while ghiukumari is ranked last. Vegetables are ranked as most profitable as they sell easily and they are the most profitable crop. However, until now the farmers used inorganic fertilizers and pesticides for the vegetables, but when they will switch to organic farming ( ghiukumari soil must not be contaminated with inorganic substances) vegetables will stop being the most profitable crop. Ghiukumari is placed second according to the expected benefits. Maize was ranked first for the “type of land” criterion because it can be cultivated in any type of soil while ghiukumari seems to have more specific requirements. The group was asked is ghiukumari requires more work that the other crops. The answer was that ghiukumari needs weeding by hand, no tillage and no chemicals are allowed. But, since it is a perennial crop, it saves labour because it needs planting at every five years. The executive committee of the cooperatives goes and checks how farmers take care of the field where they planted ghiukumari. Moreover, the group was asked if the ghiukumari is the responsibility of women or men. The answer was that all members of the family work the same on the field. Ghiukumari is the most draught resistant crop as it can survive long periods with a small amount of water. Rice and vegetables on the other hand are the most sensitive crops to water inputs. According to the group the rice and wheat are the easiest to sell crops, followed by maize and vegetables. Ghiukumari is ranked last because the groups know only one possible buyer for the plant at this moment, Aloe Nepal. After eliciting all the criteria, the group was asked to rank them giving the first rank to the most important one. The group considered that “daily consumption” is the most important criterion. The second and third ranks were given to the “market possibility” and “profitability”. Moreover, “access to seed” was ranked forth while “manure requirement” criterion occupied the fifth place. The “type of land” criterion was ranked sixth while the last place was given to both “labour requirement” and “draught resistance”.

Page 31 Annex 3: Focus groups transcripts

Healers Focus Group

Data: 12 th June 2010 (12:10 pm- 2:00 pm) Location: Bachhauli - WN4 Name of the group: Chitwan Tharu Traditional Skills Management Group Participats: Tora Chaudhary (M, 61) Vice president of the healers group Baburam Mahato (M, 77) Founder member of the healers group ; former vice president of the group Aagit Mahato (M, 82) Healer Chhedevi Mahato (F, 77) Delivery lady Manoj Kumar Chaudhary (M, ) Secretary of the group????

I. History diagram 2059 [2002] National Trust for Nature Conservation initiated the “Biodiversity Conservation Centre” programme with the main focus of preserving the indigenous knowledge of the healers and the conservation of medicinal plant species. Through this program, the “Chitwan Tharu Traditional Knowledge and Skill management committee” was founded as an organisation that gathered all the local healers under one umbrella organisation. With the help of the trust, the healers started to cultivate medicinal plants instead of harvesting them in the wild. At the moment a nursery is established and some species are planted on 5 katha given by the organisation that preserves the Tharu culture and traditions. A clinic for poor people was also established. 2060 [2003] Planting medicinal plants in the community forest – Baghmara - 102 species of pants on 2.5 katha. These plants kept getting ruined by the wild animals. 2061 [2004] Clinic is closed down. 2065 [2008] The planting of medicinal plants stops in the land of the Baghmara community forest Q: When and why did you become a healer? Tora Chaudhary became interested in the healing and traditional medicine 35 years ago, when his wife had bone fractures that were not treated by the hospital doctors. Then he visited a healer that succeeded in treating his wife. Since then he dedicated his time to learning and practicing traditional healing techniques. He knows how to treat fractured bones but does not always have the necessary materials. He receives patients who are left uncured by the hospital doctors. He has gastric medicines in stock but for other illnesses he has to prepare them fresh. Baburam Mahato comes from a family where there were three generations of ayurvedic doctors. His father and grandfather were healers. However, as his father died when he was young, he did not manage to learn from his father. He said that the medicinal plants are depleted. They need to conserve them but many people are not interested in this. He said that there is a need for collaboration between healers, students and different organisations. He thinks that he can cure fractured bone faster than a doctor. However, he acknowledges that it is difficult for a healer to straighten the bones, at it would be best if healers and doctors could work in coordination, the doctors to stretch the bones and healers to heal.

Page 32 Annex 3: Focus groups transcripts

Aajit Mahato and his wife Chhedi have been living here all their lives. They knew the importance of medicinal plants from childhood. They learned from their parents to collect herbs from the jungle. Aajit started working as healer 25 years ago, while his wife became her work as a delivery lady almost 4o years ago. Q: How many healers are members of the organisation established by the trust? At the beginning there were 58 members, 46 healers and 12 delivery ladies. Q: How do you become a member? You have to prove that you have knowledge about medicinal plants. You also pay a small fee each year or a larger fee for lifetime membership. Q: How did the clinic worked? Every day, two healers and one delivery lady were there. Every day there were different healers in the clinic. An Rs5 fee is perceived for each consult. Q: Why was the clinic shut down? There was a lack of stuff. Also, the trust kept changing the location of the clinic. They asked for a permanent location but it was not given. People did not want to pay the Rs5 fee, so they went directly to the healers so they did not have to pay it. Q: You said that the people went to the healers directly so they do not have to pay the clinic fee. What do you think is the solution to this problem? We do not know. People do not want to pay, they go to the healer and are not interested if they are cured or not, they do not pay. Q: Are there any plans to reopen the clinic? We want the clinic to be there for the long term. But the trust has to contribute because we do not have the financial resources. Q: You said that the Trust has been documenting you knowledge? What exactly is written down? Is this process over? The trust documented the diseases they can cure and how to do it with medicinal plants, how to make medicines, what to include in them and in what quantity, and how much medicine to take. The trust documented some things but there are others that should be written down. Q: Whit how much money did the trust contributed? The trust put 1 lack [Rs 100,000] in the back as savings for the healers group. With the interest from this money the group paid the labourers and the accountants that kept the records of the group – part of Baghmara Community Forest. Q: What would you like the trust or any other organisation to do for you? They said that the trust asked them to utilize the medicinal plants and to run the clinic, but they need a building for the clinic and land for the medicinal plants. They would also like a fare accountant to keep the books. And money to pay the accountant. They need money until they sell sufficient to support their activities, until the medicinal plants grow and they can sell. They would like to establish a clinic and charge a fair price for their services, not to cheap not too expensive. At the moment they give the medicine for free. If a doctor asks for Rs300 for a check up, they would charge only Rs100. For example if an appointment with the doctor would cost Rs25, they would like to split it, 25% to go to the group income and 75% to the healer.

Page 33 Annex 3: Focus groups transcripts

Q: How much do you charge for helping with a birth? Rs50. Q: Since you are not gaining a lot of money by being a healer, what is your main source of income? Shanti declared that he lives out of farming. Q: What were the most important species you planted in the Baghmara Community Forest land? Neem, cassia fistula, amala, satavari [kurilo], datura, sarapaganda, tulsi , ec. Q: Who worked on the with the medicinal plants? All the members of the group. Q: Why have you stopped planting the medicinal plant s in the community forest land? Until 2065 we were planting and selling the medicinal plants we could collect in that plot. The income generated by the commercialisation of medicinal plants was around Rs45,000/year. This money was used to pay the labourers that were looking after the plot. After that we stopped selling but the healers still use the plants that are still there. Q: Do you cultivate medicinal plants in your own farms? Yes, we plant for our use. Two people in the group, Baburam Mahato and Manoj Chaudhary cultivate commercially medicinal plants. Baburam Mahato in link with District Ayurvedic Office for a long time now and he manages to sell some plants. This year he sold 6kg of gurjo with Rs50/kg. He also know that one can get Rs3,500 for 1 kg of kurilo seed. The Trust for Nature Conservation started documenting the knowledge the healers have on medicinal plants and there uses. However, the healers expressed their desire to have apprentices. They said that even though they document the knowledge, they would like to transfer it to the next generation. II. Ranking exercise The group was asked, if they had the land and financial resources, what plants would they chose to grow. The healers chose the plants according to their knowledge and experience. Moreover, the group was ask to rank the chosen plants according to criteria they consider relevant. Rank one should be given to the best performing plant according to a certain criterion. The table below shows the results of the ranking exercise done by this group.

Matrix ranking exercise with the healers group Plant Criterion Harro Barro Amala Kurilo Sarpaghanda Cures most diseases 2 3 1 4 5 Multipurpose 2 1 3 4 5 Fruits first 3 3 3 1 2 Profitability 2 2 1 3 4 Easy to cultivate 1 1 1 2 3 Grows fast 4 3 5 1 2 Water requirement 1 1 1 3 2 Storage time 2 3 4 1 2 Labour intensive 2 2 2 1 1 Manure requirement 1 1 1 3 2

Page 34 Annex 3: Focus groups transcripts

For this group the most important criteria were “cures most diseases”, “multipurpose” and “fruits first” while profitability of the plant occupied the fourth place. The low ranking of profitability is also explained by the fact that the healers do not sell the plants, they produce medicines which most of the time are a combination of plants. The difference between the “fruits first” and “grows fast” criterion is important from a healer’s perspective because different parts of the plants – such as the bark – are used, not just the fruits.

Page 35 Annex 3: Focus groups transcripts

Crystal Nepal Focus group

Data: 13 th June 2010 Location: Kalyampur- Bharatpur VDC Participats: Dharma Raj Adhikari (M, 42) Member of Crystal Nepal Prem Kumar Shrestha (M,58) Member of Crystal Nepal Nawarj Adhikari (M,44) Member of Crystal Nepal Sita Adhikari (F, 40) Member of Crystal Nepal ; Founding member of CVIL 6 Padma Pandej Adhikari (F, 25) Member of Crystal Nepal

I. History diagram 2060 [2003] Crystal Vision International Limited (CVIL) is established. Sales of herbal products begin. 2061 [2004] Crystal Nepal is established. The first Crystal Nepal farms begin production. 2063 [2006] Crystal Nepal starts to gather farmers to cultivate medicinal plants and offers trainings on cultivation of medicinal plants. The first four members receive such trainings. 2064 [2007] The first four participants say that they made good income from medicinal plants. 2065 [2008] Padma Adhikar i gets training of medicinal plants and starts tulsi cultivation. 2066 [2009] The participants say that the market price of medicinal plants this year was low. 2067 [2010] After the scandal, they estimate a low price for medicinal plants this year due the insecurity in the market.

Crystal Nepal Ltd is a company founded in 2004 with the purpose of medicinal plant cultivation. The company has its own farms but also purchases medicinal plants from individual farmers affiliated to its network. The company offers an initial training on cultivation to the member farmers and a promise to buy the medicinal plants at an agreed price, usually lower than the market price. Crystal Nepal collects and processes the medicinal plants. Then a different company, Crystal Vision International Limited (CVIL), sells the finished products through a network marketing scheme. The farmers that are part of CVIL – meaning they sell the company’s products – get a better price when selling their plants to Crystal Nepal compared to farmers that are not members of the marketing network. The decision making processes in the Crystal Nepal network is quite interesting. The administrative board of the company takes the main decision on cultivation of medicinal plants (species and quantity). The local branches of the company then organise meetings with farmers and then each one chooses what plant he/she can grow and what quantity. The farmers affiliated to this network have a more homogeneous knowledge on the plants they cultivate, but rarely other knowledge on different plants.

6 Crystal Vision International Limited Page 36 Annex 3: Focus groups transcripts

II. Ranking exercise During the focus group discussion, the farmers were asked to compare the plants they know according to their own criteria. Table 3 presents the results of the scoring and ranking exercise. For this group the most important criteria when comparing the plants were “health benefits”, “profitability”, “easy to cultivate” and “storage time”. Healing benefits is the most important criterion because the farmers believe that health should be achieved first, then wealth, according to the CVIL logo “Health, Wealth and Creativity for Humanity”. Table 2 Matrix ranking exercise with Crystal Vision group Plant Criterion Tulsi Godtapre Camomile Lemongrass Health benefits 1 2 3 4 Profitability 2 4 1 3 Easy to cultivate 1 4 3 2 Storage time 1 4 2 3 Water requirement 3 2 4 1 Labour intensive 4 2 3 1 Environmental health 1 4 2 3 Multiple use 1 4 2 3 Manure input 3 1 4 2

Health benefits of tulsi are the most significant as according to the farmers, if taken every day, tulsi prevents 38 types of diseases. Moreover, camomile is the most profitable because the essential oil extracted costs almost 30.000 Rs/litre (360 euro/litre) while the flower is worth 600 Rs/kg (7 euro/kg). Storage time is quite an important criterion because it directly affects profitability. The farmers mentioned that they store the tulsi for some time, while the market price is low, before they sell it to the network or elsewhere. The water requirement of the plant can be the limiting criterion for some farmers. One of the factors that contribute to the fact that camomile is cultivated on a smaller area is its water needs compared to the other plants. “Multiple use” – refers in this context to the fact that the plant is used as ingredient in more products. It should be noted that tulsi and camomile are the most versatile and used plants.

Page 37