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Financial Viabilty of Medicinal Famring R - v15n1
Financial Viabilty of Medicinal Famring R - v15n1
Volume 15 No. 1
January – April 2003
Financial Viability of
Medicinal Plant Farming
Compiled by
Aurora S. Jose
Foreword
This issue contains the second of a two-part series of information on the production and
management of medicinal plants. Growing and cultivating medicinal plants is one of the
viable strategies for sustainable management of upland areas or the countryside.
With this two-part series on medicinal plants, we hope to raise the awareness and give
knowledge to the clientele and encourage them to venture into the growing and
cultivation of medicinal plants.
CELSO P. DIAZ
Director
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Introduction
Manufactured synthetic drugs command a high price which Filipino masses oftentimes
cannot buy. The passage of Republic Act No. 8423, otherwise known as “Traditional
Alternative Medicine Act (TAMA)” in December 7, 1997 answers the people’s present
needs on health care by providing and delivering Traditional and Alternative Health Care
(PAHC) products, services and technologies that have been safe, effective, affordable
and accessible for Filipinos.
As cited in the research and development work of the National Integrated Research
Program on Medicinal Plants (NIRPROMP), the first medicinal plantations were
established in Cavite and Davao in order to provide raw materials for the pilot plant of
Bicutan in manufacturing of medicinal products. In the establishment of three herbal
manufacturing plants of the Department of Health in 1985, pilot plantations of medicinal
plants were also established in Cagayan, Leyte, and Cotabato.
With the growing interest on traditional herbal medicine in the country several private
companies ventured into the production and manufacture of medicinal plants and
products. One of the biggest in the country is the Pascual Laboratory, owner of 40 ha of
medicinal plantation in Sta. Rosa, Nueva Ecija.
However, the Philippine Herbal Medicine Industry at this stage is not yet well-developed
as compared with China, Japan, Korea and Vietnam. To boost the country’s medicinal
industry, there is a need for a holistic paradigm shift of a small- or large-scale farming
since the country has sustainable indigenous medicinal plants like ampalaya (Makiling
variety), sambong, lagundi, acapulco, and many others.
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Marketing aspects of medicinal plants and products
Medicinal plants and products now known and used as alternative medicines in the local
market are the following:
• Lagundi (Vitex negundo L.) As-cof, Pascual Laboratory, for cough remedy.
• Sambong (Blumea balsamifera (L) DC), for diuretic relief, Pascual Laboratory
• Akapulco (Cassia/Senna alta L.) lotion, for anti-fungal and skin rushes
b. Plants being developed as drugs (but available in the market as food supplements)
Today many business-oriented groups have ventured into the herbal market.
Appendix 1 shows the list of some producers engaged in the manufacturing of herbal
and medicinal products in the Philippines.
Herb farmers at San Jose, Dumaran, Palawan who participated in the pilot study of the
Department of Health and the Palawan Center for Appropriate Rural Technology
(PCART) started to cultivate lagundi (Vitex negundo) and other herbs in their small farm
lot. The farmers were able to earn an extra income of P30,000 a year in lagundi
farming. On the first year of operation, they obtained a small financial return but
apparently in the succeeding years, the financial return increased. The socioeconomic
status of the herb farmers dramatically changed. They were able to support their
children through school aside from having the means to provide the basic needs of their
families.
The intervention showed that medicinal crops gave them extra income rather than doing
slash-and burn activities or over-harvesting of forest products. The farmers are now
active in herbal farming with the goal of producing high-quality herbal raw materials on a
large-scale production.
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Herbal farming is a profitable business. The pharmaceutical industry demands tons of
raw materials. Therefore, the entrepreneur must know the requirements of herbal
farming taking into account the externalities, risks and difficulties of growing and
cultivating medicinal plants. The general considerations for herbal farming are: site
profiling of the farm or plantation far from pollution, soil that is free from heavy metals,
high quality planting stocks to produce high quality leaves, use for organic fertilizer, and
non use of insecticides, fungicides or pesticides, moisture content of dry leaves or
powdered materials below 5% among others.
A study conducted by one of the professors at the University of the Philippines Los
Baños, revealed that medicinal plant farming is profitable. A 1-ha area planted with
lagundi or sambong produces 10,000 kg to 20,000 kg of fresh leaves at the price of
P15.00/kg in 2 times harvest per year with the gross income worth P300,000 to
P 600,000. Deducting the production cost, a farmer obtained a net income of about
106,000 per ha on the first year of operation. The harvest can be sold in dried and
powdered forms in order to obtain higher price and profit.
Table 1 shows the price of raw materials os some medicinal plants and other high value
crops.
Table 1. Prices of raw materials of some medicinal plants and other high
value crops
Source: Information gathered from the Manager of Altermed as per consultative meeting last
May 3, 2002.
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Based on the information generated by ERDB from the pilot project on the integration of
medicinal plants as agroforestry crops, the following are the projected income return per
hectare of four scientifically validated medicinal plants
2. Sambong: leaves
Year 1
• No. of harvests 2
(six months after planting & 3 months thereafter
Harvest done twice a year)
Amount in (Php)
Estimated cost of production:
• Cost of planting materials for 1 ha 200,000.00
With spacing of 0.5 x 1.0 meters
(20,000 plants/ha x Php10.00/plant)
• Cost of labor (clearing, planting, maintenance, 120,000.00
Harvesting 10 persons at Php250.00/day for 48 hours)
• Cost of soil management 5,000.00
• Cost of pest management (non-use of pesticides) 10,000.00
• Cost of water management 2,000.00
• Total cost of production for fresh materials 337,000.00
• Gross income for fresh leaves 480,000.00
(Estimated harvest: 60% yield 12,000 kg/ha x
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Php20.00/kg of fresh leaves x 2 harvest)
• Net income of fresh leaves 143,000.00
In dried leaves
• Additional cost of oven drying operation and
management 110,000.00
• Gross income for dried leaves 1,080,000.00
(Basis: yield 24,000 kg/ha/yr of fresh leaves x
15% recovery x Php300.00/kg delivered)
Less: Total cost of production for dried leaves 447,000.00
• Estimated net income on dried leaves 633,000.00
3. Lagundi: leaves
Year 1
• No. of harvests 2
(six months after planting & 3 months thereafter
Harvest done twice in a year)
In dried leaves
• Additional cost of oven drying operation and 110,000.00
management
• Gross income for dried leaves 900,000.00
(Basis: yield 20,000 kg/ha of fresh leaves/yr x
15% recovery x Php300.00/kg delivered
• Less: Total cost of production for dried materials 347,000.00
• Estimated net income on dried leaves 553,000.00
4. Acapulco: leaves
Year 1
• No. of harvests 4
(four months after planting & 2 months thereafter
Harvest done four x in a year)
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• Cost of planting materials (Php10.00/plant) 30,000.00
Population density 3,000 plants/ha with spacing
of 1.5 m x 1.0 m
• Cost of labor (clearing, planting, maintenance, 120,000.00
and harvesting: 10 persons at Php250.00/day for 48 days
• Cost of soil management 5,000.00
• Cost of pest management 10,000.00
• Cost of water management 2,000.00
• Total cost of production of fresh materials 167,000.00
Additional cost if dried
• Air drying + oven drying 20,000.00
• Cost of oven type dryer + maintenance 90,000.00
• Total cost of production for dried materials 277,000.00
To summarize the production process, Figure 1 shows the different stages of activities in
the production of medicinal plants before the delivery of raw materials to the
manufacturing plant.
Using the basic information, any individual, cooperative, or corporation could venture
into the herbal and medicinal products enterprise. There is a market for raw materials
produced.
References
Aldridge, N. 2002. There is money in Lagundi – but you have to know how.
Agriculture, Manila bulletin. December 2002.
Quintana, E.Q. 1999. A primer on growing medicinal plants. University of the Philippines
at Los Baños, College, Laguna
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Figure 1. Stages of activities in the production of medicinal plants
Plantation Sterilization
Establishment
& Management
(clearing, weeding,
planting & maintenance
Harvesting Packaging
Source: Data gathered from the interviewed done with Mr. Alex Parducho,
Farm Manager, Altermed Corporation
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3. AM Southern Enterprise Antonio Malaya, Jr. 42 New Orleans St.,
Cubao, Quezon City
Tel. Nos. 723-3159/
416-6331
8.Carica Herbal Health Ramon Tan Products 2626 Dian St., Makati City
Telfax No. 302-6154
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15. Herbcare Enterprise Horacio Abelarde PDC Commercial Center,
Pilar Village, Las Piñas City
Tel. No. 802-2222
19. Rita Riz Bake House Rita Carmela Santiago 151 Alley 1 Proj. 6
And Food Products Quezon City
Telfax No. 928-5942
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27. Osaka Iridology Geraldo Robles National Wellness Center
Quezon City
Tel. No. (033)509-9688
30. Dr. Romero Paduga Dr. Romero Paduga Lot 112 Blk. 1, Mandarin
St., Pleasant Village,
Muntinlupa City
Tel. No. 861-0733
Source: Chamber of Herbal Industry of the Philippines, Inc. Quezon City 2001
(For specific product line produced, contact the manufacturers)
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