report of the learning event no. 7 april 6, 2018, friday ... · slide presentation by mr. govindaa...
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REPORT OF THE LEARNING EVENT NO. 7
April 6, 2018, Friday Time: 3:00 to 5:00 pm
Venue: RAP 3 CONNECT Meeting Hall, Jawalakhel
I. BACKGROUND AND THE ORGANIZATION OF THE EVENT
In continuation of its practice of promoting cross-learning, Market Development Forum
Nepal (MDFN) organized a Learning Event on the 6th of April, 2018 at the RAP 3
CONNECT premises. The focus of the event was on learning the experiences of applying
Market System Development approaches in Non-Timber Forest Products (Medicinal and
Aromatic Plants) sector. The CECI partner organization, Nepal Herbs and Herbal
Products Association (NEPHHA), made a presentation. The presentation was made by
Mr. Govindaa Ghimire, president of NEHHPA. The title of the presentation was
“Challenges of Market System of Non-Timber Forest Products (Medicinal and
Aromatic Plants (MAPs).” The entire event was chaired by the MDFN Co-Chairperson,
Mr. Ganesh KC, Program Advisor of DEPROSC NEPAL. This edition of the learning event
was extended to participation of non-members as well, including two new membership
applicant organizations – Mount Digit Pvt. Ltd. and MADE Nepal. Twenty-seven officials
representing private sector and the MDFN member organizations participated in the event
(Annex 1). The proceedings of the event took place in two sessions – Session 1 witnessed
the thematic presentation, and Session 2 was organized as the 22nd General Assembly
Meeting of MDFN. The entire proceedings were facilitated by the event chairperson, Mr.
Ganesh KC. MDFN Convener, Mr. Bharat P. Upadhyay, submitted the agenda for
decision in Session 2.
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II. EVENT PROGRAM AGENDA
Time Agenda Responsibility
3:00 – 3:15 PM
Registration and Tea/Coffee
All participants
3:15 – 3:20 PM
Welcome and opening
Chairperson of the Event, Mr. Ganesh
KC
3:20 – 3:35 PM
Self-Introduction All participants
3:35 – 4:05 PM
Challenges of Market System of Non-Timber Forest Products - Medicinal and Aromatic Plants (MAPs)
Slide presentation by Mr. Govindaa Ghimire, President,
Nepal Herbs and Herbal Products Association (NEHHPA) – a
CECI partner organization
4:05 – 4:35 PM
Floor Discussion – Facilitated by the Chairperson
Participants were requested to focus their questions, comments
and suggestions on issues pertinent to market system
development in NTFP sector. Key questions: Can the learning
of the ongoing MSD programs such as Samarth, Sahaj-NAMDP
be applied to NTFP sector? What are the challenges and
opportunities in prompting market system development in MAP
sector?
4:35 – 4:45 PM
22nd GAM – MDFN Convener presented the agenda Agenda
• MSD success stories from the member organizations for publication
• A task team to be constituted to edit and enrich the stories.
• Who to volunteer for the presentation in the next learning event
4:45 – 4:50 PM
Vote of thanks and closing remarks by the chairperson
4:50 – 5:00 PM
Refreshments
III. HIGHLIGHTS OF OPENING AND CLOSING SESSIONS
The event chairperson, Mr. Ganesh KC, MDFN Vice-chairperson, delivered the opening
and closing remarks. In his opening remarks, he welcomed the participants on behalf of
the MDFN and his own behalf, and recognized the support of CECI in availing the speaker,
Mr. Govinda Ghimire, the president of NEHHPA, for presentation on market system
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development approach applied in the medicinal and aromatic plants (MAPs). Mr. Ghimire
through his organization called NEHHPA has been championing for promoting market
system of the sector, primarily engaging the private sector member companies. The
chairperson appreciated the willingness of the speaker to share sector experience among
the MDFN members. In the opening remarks, Mr. KC emphasized that this was the first
opportunity for the MDFN to discuss about the market systems in MAPs sector. MDFN,
as he said, has been benefitting much from such learning events where market system
related topical issues are discussed, which in turn has enhanced the MSD knowledge
base of the member and non-member development partners. He wished such events
would continue in future too.
While closing the event after the technical and General Assembly sessions, Mr. KC
thanked the participants and expressed his words of appreciation to the speaker for his
contribution to participant’s knowledge enhancement on the NTFP (MAPs) sector in
general and in particular on the role of private sector in the promotion of the market
system approach. Mr. Ghimire’s key take home message “How the public sector policy
has been constraining the growth of the sector and despite NEPHHA’s long persuasions
with the government in introducing policy reforms no significant headway has so far been
made in this area” was remarkably noted by the participants. The chairperson thanked
Ms. Ruth MacPake, Team Leader, RAP 3 CONNECT/IMC Worldwide for her support in
providing the venue for the meeting and the refreshments served to the participants. He
equally thanked all the RAP 3 CONNECT’s colleagues for their support in availing the
logistics to hold the event. The chairperson summarized the discussions in the technical
session by saying that the sustainable growth of the MAPs sector, as perceived from the
presentation and discussion, is greatly constrained by lack of appropriate value-addition
and on-farm production technology, inconsistency in policies - particularly for marketing
and export of the MAPs products whose quality is much higher by any world standard,
government’s failure to recognize MAPs cultivation as a part of the farming systems – the
sector not recognized even by the agriculture ministry, and marketing of MAPs products
though produced on-farm (out of forest areas) is governed by the forestry regulations not
by the agricultural regulations except for plant quarantine. He also shared his experience
gained in this sector during his tenure as the secretary of Agriculture by acknowledging
that these problems have been persistent and have not been resolved to date. MDFN, as
he suggested, can play a role in organizing policy dialogues in collaboration with its
member organizations to draw the attention of the policy makers and as the governance
is moving fast towards federalism it is most opportune time for intervention.
Lastly once again, he thanked all the participants for their presence and active
participation in the discussions.
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IV. HIGHLIGHTS OF THE SESSIONS
Session 1 covered the slide presentation on the topic
. Welcoming the speaker, Mr. Govinda Ghimire, the
chairperson asked him to make the presentation. Mr. Ghimire’s presentation (given in
Annex 2) was of 30-minutes duration. His presentation covered the following contents:
• Introduction of NEHHPA describing its strategic activities, partners, member
company products, international markets for NEHHPA Members.
• Background
• SWOT Analysis
• Market System in MAPs
• Challenges
• Recommendations
Introducing NEHHPA, Mr. Ghimire said that Nepal Herbs and Herbal Producers
Association (NEHHPA) is an apex organization of the herbal producers, manufacturers
and traders in Nepal. Altogether it has 86 members and was established in 2002. Its
strategic activities are in the areas of Marketing and Networking, Business Development,
Capacity Building, Research and Quality Assessment and Advocacy. NEHHPA works
with several national and international development partners (refer Annex 2 for details).
Member companies produce and market a wide range of herbal products - essential oils,
cosmetics and personal care products, ayurvedic medicines, vegetable oils, spices and
crude herbs. India, China, Korea, Europe (Germany, France, Italy, and others), Canada,
USA and Singapore are the major international markets for NEHHPA member companies.
They have been working to diversify the markets as well as the products.
Moving further on the presentation, Mr. Ghimire shared that Nepal’s distinct topography
& climatic feature provide opportunities for several varieties of Herbs and Non-Timber
Forest Products (NTFPs). Of the estimated 7000 species of flowering plants, 2000
species fall under Non Timber Forest Products (NTFPs) category. Medicinal and Aromatic
Plants (MAPs), commonly known as Jadibuti or Jaributi fall under the NTFP sector. 700
(10%) are medicinal plant species, and among them 250 species are traditionally used
as medicine. In addition, they are used for production of pharmaceuticals, dietary
supplements, natural health products, beauty aids, cosmetics and personal care products,
and some products are marketed for the culinary/food purpose. About 300,000 families
are engaged in this sector – 9% full time and 91% part time. MAPs contribute 5% to the
national GDP. Ministry of Forestry and Soil Conservation’s current estimate indicates that
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about US$ 583 million equivalent income is still untapped form the forestry sector, out of
which the share of MAPs sector is equivalent to US$ 67.6 million.
Sharing the findings of the SWOT analysis of the sector, the speaker mentioned that the
sector has ample opportunities but not without challenges (refer Annex 2 for details).
Referring to the market system operating in the sector, he said that ccollection and
marketing of MAPs is a major source of rural (household) income. The key Value chain
that operates, mostly in informal way, includes harvesters (collectors and domesticators),
traders (sub local and local levels), wholesalers (central and
regional level), manufacturers and the consumers.
Key challenges in the sector, as shared by the speaker, were as follows:
• Environment Protection Act 1997, Environment Protection Rules 1998 and Non-
Timber Forest Products Development Policy 2004 make EIA/IEE mandatory for
collection of MAPs items in the quantity of > 5 metric tons. They are invariably
applicable to both forest and cultivated products in private land. Public sector
agencies differ in EIA/IEE procedural matters - Ministry of Science, Technology
and Environment (MoSTE) claims that EIA/IEE needs to be conducted by a third
party while Ministry of Forest and Soil Conservation (MoFSC) claims IEE needs to
be conducted by the line ministry.
• Haphazard system of Royalty Collection at different levels - CFUGs, DFO & DDC;
inconsistent Royalty rate. For same species, royalty rates are different in different
names. Likewise, the sector lacks one window royalty collection system.
Permission(Nikasi patra/ Chod Purji) provided by DFO for transportation is of short
duration (21 days) which is not practical considering the remoteness of the
production areas.
• Multiple taxation and lack of financial incentives - Lack of single window taxation
system, lack of Explicit legal Provision for the payment of Prices of MAPs/NTFPs
at local level, limited access to Bank and Financial institutional credit company,
and lack of Insurance Policy.
• Poor Infrastructure - Poor testing infrastructure at custom points at National Plant
Quarantine Program (NPQP) for Sanitary and Phytosanitary certification, only
visual inspection conducted causing high chances of rejection of shipments from
Nepal, poor infrastructure at national testing bodies like Department of Plant
Resources / Natural Products Research Laboratory (DPR/NPRL) and Department
of Food Technology and Quality Control (DFTQC).
• Laboratory tests not harmonized with the international standards.
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• Trade Barrier. Traders passing through UP Government are subject a transit
permit from Ministry of Forest of the UP State government. Nepal exports around
80 items (MAPs) to India. But, Schedule VII of the Plant Quarantine Order 2003 of
India contains only 17 of those 80 items. Items not included in Schedule VII have
to be shipped under the names of those 17 items which requires significant
informal costs. Exporters also run the risk of seizure of such products because
exports are being done through informal means.
• Lack of development of HS Codes at 8 digit level by the custom authorities
• Cultivated MAPs are not considered as agricultural products. Most exports are in
raw form without value-addition.
• Species wise guidelines on Good agricultural cultivation Practices are lacking.
Concluding the presentation, the speaker put forward specific recommendations to
address the above mentioned constraints (refer Annex 2 for details).
Following this session, the chairperson asked to convene session 2 as the MDFN’s 22nd
General Assembly Meeting. The Convener, Mr. Upadhyay, submitted two agenda for
discussion. The first agendum was requesting the member organizations to share MSD
related success stories for MDFN publication as per the Year 1 work plan which ends in
June 2018. Once the stories are received, the Convener in consultation with the Executive
Committee will facilitate setting up a task group to edit the stories for publication. The
Convener also informed the members that the two organizations – Mount Digit Pvt. Ltd.
and MADE Nepal – have applied for membership and they will be notified after the
endorsement by the upcoming Executive Committee meeting. The second agendum was
to ask the members for volunteering the presentations at the next learning event which
would probably be organized after three months. Two organizations – iDE Nepal and IMC
Worldwide indicated their willingness to do so.
The chairperson closed the session 2 (General Assembly Meeting) by thanking the
members for their continued support and endorsement of the secretariat’s proposal.
V. DISCUSSION HIGHLIGHTS
Following the technical presentation, the chairperson opened the floor for general
discussion, comments and suggestions. He requested the participants to focus the
discussion on market system development related issues. The general discussions
revolved mostly around the government sector policies and regulations. The key points
of the discussion in this area are already described in the aforesaid section entitled
Session Highlights. The MAPS sector has ample policy provisions but their
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implementation is not harmonized and consistent. Participants were of the view that the
norms and standards for execution vary from agency to agency and from level to level
(center to local). MAPs sector is potential for integration with agricultural production
systems, for which enabling policy environment is lacking. Good agricultural and
collection practices (species wise) in the MAPs sector are not developed as in agriculture.
The MAPs species that can be potentially grown in the farm in Nepal are Mentha (Menthe
arvensis), Citronella, Aloevera, Palmarosa, Lemongrass, Pachauli, Tulsi, Kurilo and
Chamomile. Potential for growth of the sector is very high and also it provides unique
competitive and comparative advantages in the market.
For market expansion, the globally accepted standards for laboratory tests is crucial.
Such laboratory testing facilities are available, though in limited capacity, only in
government laboratories such as laboratories in DFTQC, Plant Quarantine, and
Department of Plant Genetic Resources of the MoFSC. For many tests, these laboratories
are not internationally accredited. Most trading in the sector are informal but occassionally
formal after the importing parties verify themselves the product quality through their own
tests. Essential oils – such as chamomile oil, lavender oil in France, Rose oil in Bulgaria
and Mint oil in India – have high demand but their export is constrained due to low scale
of production as well as substandard quality test results. The participants realized that
potentiality of MAPS is 200% higher than that of agriculture.
Research back up, appropriate processing and packaging technologies, access to
finance and insurance, local level initiatives (provincial and municipal level) in scaling up
the good production practices and sustainable harvesting practices, and increased
coordination between agricultural and forestry ministries, as concluded by the participants
after discussion, are the key areas for improvement for the market system in MAPs.
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ANNEX 1: Participants of the Learning Event No. 7
S.N. Name Designation Organization Email
1. Kanchan Bhandari Program 0fficer-
MSD
CECI [email protected]
2. Durga Datta Regmi Portfolio Advisor RAP3-Connect [email protected]
3. Govindaa Ghimire Chairperson NEHHPA [email protected]
4. Sanjeev Neupane Program
Coordinator
BFC/SEDRA [email protected]
5. Gyaneshwor Karki Program Director Mount Digit
Technology P.Ltd
6. Manoranjan Regmi Intern RAP3-Connect [email protected]
7. Niva Shakya Enterprise
Graduate
RAP3-Connect [email protected]
8. Milipa Thapa Enterprise
Graduate
RAP3-Connect [email protected]
9. Asmita Poudel Intern RAP3-Connect [email protected]
10. Ashesh Karki Intern RAP3-Connect [email protected]
11. Sudeep
Bajracharya
MSD Officer DEVTEC Pvt. Ltd. [email protected]
12. Binod Mishra Project Director IDE-Nepal [email protected]
13. Vijaya Sthapit NTFP Team
Leader
IDE-Nepal [email protected]
14. Ashta Prajapati Supply Chain
Coordinator
IDE-Nepal [email protected]
15. Ram Krishna
Neupane
Business
Development
Director
FORWARD Nepal [email protected]
16. Ganesh KC Vice -
Chairperson
MDFN
DEPROSC Nepal [email protected]
17. Sujan Piya Head of Program Practical Action [email protected]
18. Min Raj Bhandari Executive
Director
MADE Nepal [email protected]
19. Prakash Subedi Team Leader-
EEPSD
OXFAM [email protected]
20. Lokshastra
Shrestha
Program
Coordinator
SAPPROS-Nepal [email protected]
21. Prasanna Pradhan MSD Manager Mercy Crops [email protected]
22. Kanchan Gurung BMSD KISAN-II [email protected]
23. Sushila K.Thapa
Magar
GESI Advisor KISAN-II [email protected]
24. Sunil Dhungel PO CEAPRED [email protected]
25. Siddartha Khadka PM Swisscontact [email protected]
26. Bandana Bhatta Intern Swisscontact [email protected]
27. Bharat P.Upadhyay Convener MDFN [email protected]
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ANNEX 2: Mr. Govindaa Ghimire’s Presentation Slides
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(Shared for general information)