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Ministry of Commerce And Supplies - Enhanced Integrated ...

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N T I S20107. MEDICINAL HERBS AND ESSENTIAL OILSStrengths Availability <strong>of</strong> collectors and intermediary workersin wild herbs and organized human resources forproduction <strong>of</strong> essential oils Biodiversity in Nepal <strong>of</strong>fers possibility to explore newand high-value products Proactive policy, directives, and regulations Production extension prospects through contractfarming system and purchase assurance to farmers Cultivation and processing centres in more than 15districts Organic certification from internationally recognizedorganizations <strong>of</strong> different countries havingaccreditation such as ECOCERT, NASSA, IFEAT, EFFEO,etc.Opportunities Increasing environment- and nature-conscious buyers Growing preference for organic and herbal-basedproducts over synthetic products Gradual shifting from crude export to processing <strong>of</strong>herbal products and essential oils Strong government and donorsWeaknesses Labour problems, in particular high wages comparedto productivity High collection charges Weak knowledge <strong>of</strong> scientific agronomical practicesand post-harvest technologies within the sector Inability to target attractive markets due to lack <strong>of</strong>exposure and lack <strong>of</strong> knowledge <strong>of</strong> internationalmarketing practices High cost <strong>of</strong> suitable packaging materials Lack <strong>of</strong> technical and policy support for processingand exporting <strong>of</strong> herbal products and essential oilsThreats Competition from India and China Low-price markets for chemical/synthetic substitutes High technical entry barriers with stringent rules forprocessed materials Question <strong>of</strong> sustainability <strong>of</strong> some raw materialsActionsProduct and Technology Support technology such as fractional distillation and steam processes for oil extraction toreduce material wastage and to lower the production costs. Encourage private sector investment in farming, processing, and production <strong>of</strong> forestry andherbal products for better use <strong>of</strong> resources. Facilitate internationally recognized product certification. Coordinate efforts <strong>of</strong> INGOs and NGOs in supporting production development and technologicalimprovement. Emphasize a market-oriented approach. Initiate R&D efforts towards processed products such as perfumes, food flavouring elements,and fragrances.Market Access Promote use <strong>of</strong> better packaging materials such as certified aluminium containers.Institutional and Human Resource Development Establish specialized institutions in the Mid-Western Region to support economically deprivedpeople from mountainous regions through development <strong>of</strong> herbs and aromatic plants andplant products. Collaboration with the Jadi Buti Entrepreneurs Association <strong>of</strong> Nepal (JABAN),Nepalgunj might be appropriate.Business Environment Set up a national laboratory through public-private partnership (PPP) that issues internationallyrecognized product certificates. Such a laboratory should be supplemented by a branch inNepalgunj.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT277

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