Madagascar Aromatic and Medicinal Plants Value - Microlinks

d) AMP products exported from Madagascar (predominately essential oils) pay two export taxes (2 percent of FOB
value and 3 percent of CIF 14 value), and processors/wholesalers pay an import tax on material used in the
processing, testing and manufacturing of other AMP products (i.e., stainless steel, boilers, specialty bottles,
containers and testing equipment, dryers, packaging). These tax rates are established by the Ministry of Finance.
The following table shows the cost structure of three AMP products, including various fees and taxes. Transport costs
are factored at each step of the value chain (e.g., raw material includes landed cost at the collection places, collection
includes collectors’ mark-up and transport, etc.)
Table 5: Cost Structure of Three AMP Products
Cost
Percentage of Total Cost
C. camphora R. aromatica L. camara
Raw plant material 50 28 30
Collection + taxes (ristourne, redevance) 10 25 15
Processing 26 32 46
Export taxes 5 6 0*
Other 9 9 9
Total
* not exported
100% 100% 100%
Source: Etude filière : Plantes aromatiques, médicinales, et huiles essentielles (SCAC, FOFIFA/DRD, 2003)
Ministries: The national and local enabling environment is further complicated by the number of ministries directly
implicated in the AMP value chain. In addition to the Ministry of Environment, Water and Forests, there are:
• Ministry of Agriculture, Husbandry and Fisheries, which claims that
since most AMP (aside from products derived from trees) grow or are
produced in buffer or agricultural lands, the sector falls under their
mandate
• Ministry of Finance, which oversees taxation
• Ministry of Health and Family Planning, which approves new drugs
that emanate from traditional medicinal practice. It overseas the
medicinal segment of the AMP value chain as well as conventional
medical practice. It is tasked to provide the population a safe and
equitable option to conventional medicine through traditional
pharmacopoeia and medical practices.
• Ministry of Industry and Commerce and Support to the Private Sector.
This Ministry’s Norms and Standards Bureau is tasked with defining
and establishing norms, grades and standards for consumer products
and, when possible, harmonizing these with importing countries’
norms. Presently there are only a few national level norms and
standards related to AMP products. Some date back to the colonial
TEXT BOX 3: SAME
STANDARDS FOR 56
YEARS
To export cinnamon bark in the
form of “cigarette” bark rolls, a
standard set in 1950 and still on
the books stipulates these must not
exceed 10 cm. However,
consumers prefer and importers
specify longer size rolls. Another
decree stipulates that dried plants
must be transported in jute bags,
but international standards require
non-contaminant plastic bags. An
exporter either loses the client or
breaks the law.
14 CIF—Cost, Insurance and Freight—indicates that the quoted price covers all expenses and risks up to and including delivery at
a named destination. The price excludes import customs clearance and other costs and risks.
MADAGASCAR AROMATIC AND MEDICINAL PLANT VALUE CHAIN ANALYSIS 24