Marketing Issues of NTFPs

NTFPs are defined as all tangible animal and plant products, other than industrial timber, which can be collected from forests for subsistence and for trade.

Due to physiographic and climatic variability, Nepal occupies about 0.1% of the global land mass and harbors floral diversity of 3.2% of the global diversity, and has marked ranked 25^th position of global biodiversity richness and 11^th among Asian countries.

Tonnes of NTFPs are being exported to foreign countries from Nepal. Forest Resource Information System Project has published a manual of NTFPs in Nepal describing 121 varieties of NTFPs.

As per Forest Regulation 2079″No VAT on plant-based products but VAT on mine and water-based products“.

• CF/leasehold forest: NO VAT and royalty on NTFPs. All income from NTFPs goes to the CFUGs fund.
• Collaborative forest: scheme of 50-50% product allocation to Group and Government for timber and firewood but Silence on NTFP.

Marketing

Marketing is the set of activities undertaken by the actors to provide satisfaction to the customer. The products are supplied according to the preference of the consumers for their
satisfaction. Marketing of NTFPs includes either raw materials, semi-processed materials, or final products, however, ample ntfps are being exported in raw form. It can be local, regional, and international according to the products and their importance.

Types of NTFPs

1. Local Marketing channel: Marketing of products is limited to the geographical boundaries of the nation (home country only), and the area served is small. e.g. Bael juice.
2. Regional marketing channel: Marketing of products in a defined region, specific countries, or neighboring countries. e.g. resin and turpentine
3. International marketing channel: marketing of products across several countries in the world e.g. paper, essential oil.

Contribution of Ntfps

More than 700 plant species have medicinal value in Nepal, of which
238 are in active use and 100 are traded (Shrestha and Das, 2008 cited in Banjade
and Paudel 2008). The GoN has kept 30 species in priority, of which 12 are for
commercial cultivation and market promotion.

The following are the contributions/importance of NTFPs:

1. Close to 15,000 people derive economic benefits from essential oil harvesting, trade, and processing in Nepal.
2. The NTFPs-based enterprise created part-time employment for about 300 community people in Jumla and Dolakha (IRG, 2006.).
3. Yasha Gumba collections- support local people’s livelihood of Rukum district 5-8 lakhs/kg (Thapa et al. 2004).
4. Its contribution is estimated at around 5% of the national GDP.

Marketing issue of NTFPs

• Unstable government policies
• Lack of institutional support.
• More hassles in trade and export of NTFPs discourage its trade.
• Multiple layers of permits and checkpoints for verification increase transaction costs and add other costs.
• Burden added in transboundary trade: Until 15 years ago, Indian traders were coming to the city centers (Biratnagar, Birgunj, etc. ) and collecting NTFPs from the wholesalers (FNCCI, 2004 in Banjade and Paudel, 2008). Now, has to be exported to India.
• Trade is largely in raw form (low profit to farmers).
• Non-transparent market eg, high profitability tendency of middleman through the labor of local people
• The insufficient market of NTFPs.
• Insufficient knowledge about market demand, and training in product processing.
• The low bargaining power of local people is linked with lower market benefits.
• Inadequate required marketing infrastructure.
• Unsustainable harvesting results in depletion of NTFPs resources- a problem in market supply.
• Generalized harvesting method/mensuration for all NTFPs.
• Inadequate research.
• The market price depends upon limited market agents.
• The uprooting of entire plants hinders further regeneration.