Growing the Wealth of the Poor - World Resources Institute

A New Model:Community Management of MedicinalsCameroon’s failure to address the open-access issue illustratesthe need for national governments and communities to proactivelycreate and enforce guidelines for the medicinals market.Today governments, communities, NGOs, and donors are learninghow best to support such efforts. Sri Lanka, Nepal, India,and Ethiopia are a few of the countries serving as test groundsin recent medicinal plant development projects.Between 1998 and 2004, the World Bank partnered with theSri Lankan government to establish community managementsystems for biodiverse areas known to have medicinal species.The Bank contracted with NGOs to help 29 villages formMedicinal Plant Conservation Areas on state-owned lands,meant to act as buffers between village domains and stateforest reserves. Village Project Management Committees,partnering with the NGOs and local researchers, oversaw thestudy of medicinal plants within the area and developed plansfor harvesting them sustainably and monitoring their populationsover time. The communities involved also startedcommunal gardens in which they cultivated medicinal plants toaugment their collection of wild stock. The effort created agreater awareness among local populations of conservationmethods and experience with joint forest managementpractices (Crown 2004:4–5,8–10,46). At the end of the sixyearproject period, the Bank considered the outcomes andfuture potential for the project successful enough to pursue asimilar effort in Ethiopia (World Bank 2001).In Nepal, thousands of communities have spent the last12 years working with NGOs, the U.S. Agency for InternationalDevelopment, and other donors to grow the medicinals marketunder the state’s decentralized forestry law (USAID 2006).NGOs like the Asia Network for Sustainable Agriculture andBioresources (ANSAB) have helped many of the country’sCommunity Forestry User Groups to craft sustainable harvestplans for medicinal plants and other non-timber forest productsand to build processing facilities to add value to them. In 2006ANSAB’s technical and networking efforts, which includedsecuring “organic” and “sustainably harvested” certificationsfor many forest-derived products, helped more than 65,000villagers take in US$5.54 million in additional monetarybenefits (ANSAB 2007:2). The certified products include 17different essential oils, such as jatamansi, and 44 single-ingredientherbs, such as juniper, which have various uses inAyurvedic (a traditional form of Indian health care), Chinese,and modern medicine (ANSAB 2005; Subedi 2001:4–6).Business’s Evolving Role:The Example of Gram Mooligai Co, Ltd.Based in Bangalore in southern India, Gram Mooligai Co, Ltd.(GMCL) is a medicinals processing company that uses a differentbusiness model from Nepal’s community ventures tocapitalize on the medicinals market and achieve environmentaland social aims. Founded in 2002 with a grant from the FordFoundation, the company is owned by self-organized groups ofmedicinal plant gatherers and cultivators from across southernIndia who hold the company’s shares. The company buys all ofits raw stock of medicinals from these groups, eliminating intermediariesfrom its supply chain. As a policy, it pays producers70 percent of product sale prices to obtain the raw stock—avery high return (GMCL 2006:2). On average, harvesters makea seasonal income of about 3,500 rupees (US$88) per year—a critical contribution for low-income families (Raju 2006: 8).To protect medicinal plant stocks from overexploitation, GMCLpartners with Indian non-profits to train harvesters to carry outtheir work in a sustainable manner (GMCL 2006:2). Thecompany also encourages organic cultivation of medicinals toaugment wild supplies and ease the work of plant collection.The company has established a 12-ha test farm to fine-tunemethods for organic plant cultivation. The lessons learned onthe farm are then integrated into the training program forproducers (GMCL 2006:8).As part of its larger mission, GCML’s business model emphasizeshelping women and poor rural consumers. The companyfosters rural employment by encouraging women’s self-helpgroups to sell the company’s medicinal products in the countryside;the women’s groups make 150 rupees for every 500rupees of medicine they sell (Indian NGOs 2007). At the sametime, GMCL hopes that these rural sales will help meet some ofthe unmet health care needs of the poor. The medicine sold inthese areas is certified by Ayurvedic physicians and targets themost common ailments of the rural population (GMCL 2006:9). The company expects such rural sales to eventually accountfor 20–30 percent of its total market (GMCL 2006:7).Overall, Gram Mooligai’s business strategy seems to be working.In fiscal year 2005–2006, the company achieved sales of morethan US$240,000 (Raju 2006:7,8). Having doubled its salessince 2002, GMCL hopes to expand into northern India andcapture 3 percent of the country’s medicinals market within thenext 5 years (GMCL 2006:6). The company’s success is testamentto the potential for economic and social impact andenvironmental sustainability that exists in the medicinalsmarket under the right conditions. With care, medicinals canconnect the traditional knowledge and practices of ruralcommunities with the global market economy. 99