Role of Medicinal Plants on National Economy

 Chapter 9

Role of Medicinal Plants on National Economy

INTRODUCTION

• Since ancient times, mankind all over the world mainly depended upon plant kingdom to meet all their needs of medicines: for alleviating ailments, search for eternal health, longevity and to seek remedy to relieve pain and discomfort, fragrance, favours and foods. It had prompted the early man to explore his immediate natural surrounding and try many plant, animal products, mineral and develop a variety of therapeutic agents.

• Medicinal plants still play an important role in emerging and developing countries of Asia, both in preventive and curative treatments, despite advances in modern Western medicine. They also generate income to the people of many Asian countries, who earn their livelihood from selling collected materials from the forest or by cultivating on their farms. Thus, the medicinal plants constitute a very important national resource. People in India and China are known to have used plants in organized health care regime for over 5,000 years. European herbal medicines blossomed in the Graeco-Roman era and remained in mainstream until six decades ago. The ancient civilization of India, China, Greece, Arab and other countries of the world developed their own systems of medicine independent of each other, but all of them were predominantly plant based. But the theoretical foundation and the in sights or in depth understanding on the practice of medicine was much superior in ayurveda among organized system of medicine. It is perhaps the oldest (6,000 B.C.) among the organized traditional medicine, People from other countries of the world as China. Cambodia, Indonesia and Baghdad used to come to the ancient universities of India, like Takshila (700 B.C.) and Nalanda (500 B.C.) to learn health sciences of India particularly ayurveda. From history, we learn that since ancient times, plants remained major natural resource in the world.

• One of the oldest repositories of human knowledge, the Rig Veda (4500–4600 B.C.) mentioned the use of medicinal plants for the treatment of one or other disease. In the long struggle to overcome the powerful forces of nature, the human beings have always turned to plants. There are reports available about the local communities in the Asian, African and Latin American countries having a long history of dependence on traditional remedies, largely based on plants, for immediate access to relatively safe, cost-effective, efficacious and culturally acceptable solutions to primary health care.

• The World Health Organization (WHO) estimated that 80% of the population of developing countries relies on traditional medicines, mostly plant drugs for their primary health care needs. Even the modern pharmacopoeia still contains at least 25% drugs derived from plants and many others, which are semisynthetic, built on prototype compounds isolated from plants. Medicinal plants are the major components of all indigenous or alternative systems of medicine. For example, they are common elements in ayurveda, homoeopathy, naturopathy, Oriental and Native American Indian medicine. Demand for herbal drugs is increasing throughout the world due to growing recognition of natural plant-based products, being nontoxic, having no side effects, easily available at affordable prices and sometimes the only source of health care available to the poor. Hence, medicinal plant sector has traditionally occupied an important position in the socio-cultural, spiritual, economic values of rural and tribal lives of both developing and developed countries. Millions of rural households are using medicinal plants in self-help mode. 

• About 90% of medicinal plants used by the industries are collected from the wild source. While over 800 species are used by industries, not more than 20 species of plant are under the commercial cultivation. Hence, more than 70% plant collection involved destructive harvesting because of the use of parts like root, bark, stem, wood and whole plant (in the case of herbs). This process is a definite threat to the genetic stock and diversity of medicinal plant resources, and ultimately to the economy of the country if the biodiversity is not sustainably used.

• The other main source of medicinal plants is from cultivation. The cultivated material is definitely more appropriate for use in the production of drugs. Indeed, standardization, whether for pure products, extracts or crude drugs, is critical and becomes easier. Hence, higher cost for cultivated material and cultivation are often done under contract. More recently growers have set up cooperative or collaborative ventures in an attempt to improve their negotiating power and achieve higher prices, and thus medicinal plants in a wider context generate income to the people of many Asian countries who earn their livelihood from selling collected materials from the wild forest, or by cultivating on their farms.

• Asian countries and East Asia, Europe and North America is growing in economic importance, e.g. Nepal is earning an estimated US$ 8.6 million annually from the export of medicinal plants; thus, the medicinal plants and other forest products influence local, national and international economics.

• Ecuadorians rely on medicinal plants or products derived from plants. There is lack of access to modern drugs in a significant part of Latin America. In India, annual turnover of herbal industry was estimated around US$ 250 million in 1995. According to Chemexcil report, export value of Ayurvedic and Unani medicine was about US$ 41.6 million during 1999–2000; the major OTC products contribute around US$ 30.5 million.

ECONOMIC GROWTH POTENTIAL IN NATURAL HEALTH AND COSMETIC PRODUCTS

• Medicinal plants also play a great role in food supplements for health care as well as in personal care of the mankind alongside the therapeutically active substances, thus medicinal plant based nutraceutical and cosmeceutical industry is a promising sector with enormous economic growth potential. The United States leads the market, followed by countries of Western Europe and Japan. In 1999, the global health food products market was US$ 6.8 billion, almost thrice the value in 1987. The global demand for herbal extract in food products grew to US$ 3 billion in 1999 from US$ 0.76 million in 1997, almost 4.5 fold rise in demand (Table 9.1). There are reports that Asia and Pacific Latin America, Africa and Middle East are set to provide the fastest growth for food-based (nutraceutical) industry. The United States, Japan and major European countries are the largest global producers and consumers of neutraceuticals, owing to higher level of consumer income.

• Globally, the market for plant-based cosmeceuticals has been estimated to US$ 22 billions, and the fastest growing sector in this market is antiaging products. The developed countries like the United States, Japan, Australia and Europe are the most dominant market for cosmeceuticals, and China, Malaysia, Russia and Latin America have a strong potential for long-term growth. In the United States, the market for cosmeceuticals was estimated at US$ 2.5 billion, where the market for medicinal plant ingredients used in cosmetics and toiletries stood at US$ 345 million in 1998, forecasted to increase 7.9% annually to reach US$ 503 million by 2005 and 760 million by 2008.

FUTURE ECONOMIC GROWTH

• Throughout the world, about 35,000–70,000 species of plants have been used at one time or another for medicinal, neutraceuticals and cosmeceuticals purposes. In India, about 1,000 plant species, in Nepal about 700 species, about 700 species in Peninsular Malaysia and its neighbouring Islands and in Chinese medicine about 9,905 plant materials are used but only a relatively very small number of them are used in any significant volume. According to the International Trade Centre (ITC) report, there is generally upward trend except for 1990, when it dipped slightly before rising again to US$ 1.08 billion in 1991. The world trade in medicinal plants and raw material from plants parts averaged US$ 1.28 billion during 1995–1999. Thus, there is lot of scope in future for new plant-based drugs that are still to be introduced, and the economic significance of these plant-based pharmaceuticals is considerable which is based on the following two aspects:

• 1. The value of the current plant-based pharmaceuticals, and 

• 2. The value of potential plant-based pharmaceuticals, which are yet to be introduced.

• The relationship between the economic value of a medicinal plant species and market price of the drugs derived from it, is not a direct one. However, it is true that the market prices are minimum valuations assuming that:

• the demand for the drug is inelastic, 

• that it is appropriate to value an essential input as its own cost plants, and 

• the economic rent obtained from it plus the associated consumer’s surplus.

• For example, the market value of a stand of forest could be measured by translating the wood volume there in into an equivalent quantity of paper and then taking the market value of the paper. In contrast, economic value to society includes not only the value of the paper (or whatever the other commodity is selected), but also what may be referred to as the in situ benefit of trees as forest that is the contribution as:

• The forest checks the soil erosion, stabilizing the water table, converting carbon dioxide into oxygen (environmental effects);  

• Providing protection to wild life, and; 

• Providing recreational opportunities; hence, the economic value is much larger in magnitude but also much more difficult to quantify.

• This reflects that medicinal plants and their products have taken an increasing medical and economical importance with respect to product categories like health food, cosmetics and personal care products containing natural ingredients—the demand for medicinal plants is growing exponentially. The fastest growing world market in herbal products is opening up new opportunities for the developing countries to benefit from the rising green consumerism, trend to develop their export potential. However, this requires a grand strategic plan, which takes a holistic view of the entire situation to boost the export.

DEVELOPMENT OF HERBAL MEDICINAL INDUSTRY

• To cope up with the increasing demand for quality herbal medicines in the domestic as well as export markets, the successful development of herbal medicines industry will contribute to positive impact for the development of the national health care systems, improvement of people welfare, creation of competitive pharmaceutical products and encouragement of new drug discovery in the pharmaceutical industry, which will ultimately contribute to the economy of the people.

CONTRIBUTION TO ECONOMY OF THE PEOPLE

• A partnership scheme among institutions involved, i.e. the fanners, general public, research and higher education, Government health care services providers and the industry, taking into consideration the interest of each constituent, is to be directed to an integrated National Herbal Medicine Industry.

• The industry is expected to have better access to the market and the customers of the commodities for further processing to produce added value. The industry and its technology will play its role in creating and enhancing the competitiveness of the products, and the results in the form of revenue will be distributed to the farmers through the procurement of farmer’s products in an agreed reasonable price. Research and higher education institution with the support from government will provide the knowledge and technical assistance required by the farmers. The farmers will then have all the requirements to participate and contribute to activities that will ultimately and positively impact the economy of the farmer. The scheme will result multiplier effects through creation of new jobs.

• Herbal medicines will be the leading products in pharmaceutical business in the future. The abundant sources of many varieties and uniqueness of medicinal plants for herbal medicines open opportunity for the development of competitive pharmaceutical products to supply the domestic and export market.