AGRO NAD FOREST BASED INDUSTRIES

Agro and Forest Based Industries
i) Medicinal and Aromatic Plants
Due to the varied agro-climatic environment, Nepal is very rich in medicinal and aromatic plants with over 700 plant species. The collection of such plants from wild sources has been practiced since ancient times. With the establishment of the Royal Drugs Research Laboratory in 1962, the commercial utilization of medicinal plants has been encouraged. More than 300 species have been screened and studied and extraction of diosgenin, reserpine, alkaloids of belladonna, glycosides of digitalis, lemon grass oil, rosin, turpentine and menthol has commenced. Nepal, a traditional exporter of crude herbs, is now gradually emerging as an exporter of processed herbs and aromatic plants. In recent times, commercial cultivation of medicinal plants such as atropa belladonna and aromatic plants such as palmarosa, lemon grass, citronella and mentha arvensis have assumed importance. Recent studies also indicate good prospects for the cultivation and processing of chrysanthemum cinerariaefolium (pyrethrum), claviceps purpurea (Ergot), digitalis lanata, eucalyptus camaldulensis, glycyrrhiza flabra, mucuna pruriens, piper longum and valeriana wallichi.The medicinal and aromatic plants can be exploited for the production of the following: essential oils from lemon grass, citronella, palmarosa and mint, oleoresin from ginger, large cardamoms, timur and tejpat, turpentine oil and rosin from chirpine, medicines from valeriana wallichi, calamus acrous and nardostachye jatamashi. In addition to traditional medicines and essential oils, herbs and essences also have a potential as a raw material for the production of cosmetics and perfumes, herbal teas and natural health products.
ii) Vegetable Seed Production
A wide variation in agro-climatic regions from tropical to temperate and alpine climates provides opportunities to produce seeds of a wide range of varieties. More importantly, the pockets of micro-climates separated by high mountains provide ideal environment where the risk of loosing parental lines of high value seeds is minimal. Vegetable seed production is undertaken in 15 different areas with the following 4 special areas highly successful in the production of a variety of seeds : Thak Khola Marpha in the Western Development Region (elevation 2516 m.) - cabbage, carrot, cress, peas, turnip, broad leaf mustard; Musikot in the Mid-Western Development Region (elevation 1460 m.) - onion, radish, cauliflower, peas, turnip, spinach, capsicum, knoll-kohl; Kathmandu Valley in the Central Development Region (elevation 1350 m.) - cauliflower, cress, spinach, turnip, radish, broad leaf mustard; Sarlahi in the Central Development Region (elevation 60 m.) - tomato, egg plant, cucurbits, capsicum, spinach, peas and okra. Nepal has well qualified vegetable seed agronomists and vegetable seed breeders. The vegetable development division in the Department of Agriculture has many regional farms located in different agro-climatic regions with well equipped production, cleaning and storage facilities. The division is providing technical supervision and quality control services through well equipped seed testing laboratories.
Very good potential exists in Nepal for the establishment of vegetable seed farms catering to both domestic and foreign markets. Potential markets in India, Bangladesh, Sri Lanka, Pakistan and Thailand could be developed successfully. The seed quality standards in these countries are close to Nepalese seed standards. Export markets in American and European countries too could be tapped with the participation of investors from these countries.
iii) Flower Seeds Due to varying agro-climatic conditions, Nepal is in an unique position to produce a wide variety of flowering seeds which could be sold in international markets. In the summer season, zinnia, marigold, gladiolus, salvia, dahlia, canna are grown extensively. In winter and spring, most of the annual flowers such as bellies, dianthus, pansy, antirrhinum, helichrysum, aapaver, verbena, sun flower and so on are grown. The potential for seed production of the following varieties, in particular, has been identified as being very high: anemone sp., aster, chrysanthemum morifolium, elsholtzia Californica (California poppies), lathyrus odoratus (sweet pea).
The availability of varied climatic conditions and easily trainable labour provide Nepal comparative advantage to produce flower seeds at low cost. Commercial production and export of flower seed require maintenance of high technical standards and good supervision. Technology and expertise of foreign companies could be effectively employed to develop this profitable agro-business in Nepal.
iv) Vegetable Production for Export
A variety of agro-climatic regions and fertile soils permits the production of a wide variety of vegetables of good quality in Nepal. The major items of vegetables grown on a commercial scale are cabbage, carrot, turnip, radish, cauliflower, peas, capsicum,. egg plant, tomato, okra, beans and cucumber. The major centres of vegetable production are in Kathmandu Valley and in the Dhanusha, Sarlahi, Bara, Makawanpur and Chitwan district. Almost the entire production of vegetables is consumed within the country, though some exports to India and Tibet are taking place. Recently, the production of snow peas for export to Japan has got off to satisfactory start and other items like French beans are to be produced for export. This has clearly demonstrated the potential which exists for the production of a few special varieties of vegetables on a commercial scale for export. Foreign investment for the scientific cultivation of vegetables for export would be a profitable business.
v) Fruit Processing
Nepal is endowed with good ecological conditions for the cultivation of a variety of fruits. At present, citrus fruits, apple, banana, pineapple, mango, pear, litchi, guava, peach, plum and apricot are available in sufficiently large quantities. Plans are also underway to increase the area under cultivation through commercial fruit development programmes. The total quantity of fruits produced is estimated around 500,000 mt. Fruit processing industries consume a fair proportion of total production. Some small fruit processing industries are engaged in the production of fruit squash, fruit juice, jams, jellies, marmalades and fruit salad. Some of these products are exported from Nepal. Opportunities exist for the setting up of industries to process fruits for sale in export markets as fruit juices and squash, jams and jellies and fruit based special liquors.
vi) Tea Development
Nepal has commenced commercial production of tea only in comparatively recent times. The Nepal Tea Development Corporation, a government agency, owns seven tea gardens with a total area of around 880 hectares. In addition, the private sector owns tea gardens with a total area of around 1250 hectares. These tea growing areas are in the Eastern districts of Ilam, Jhapa, Panchthar, Terhathum and Dhankuta, almost adjacent to the world renowned tea gardens of Darjeeling in India.
The government has given high priority to increase tea production in the Eastern Districts with a view to achieving self-sufficiency in tea and to export high quality tea to overseas markets. In order to encourage tea cultivation, an exemption from the land ceiling has been provided together with attractive incentives. Good prospects exist for the production of quality orthodox tea in Nepal similar to the Darjeeling tea produced in India. Improved cultural practices, latest technical know-how and efficient management systems are required to bring the tea industry in line with other tea producing countries in the region.
vii) Sericulture
The development of sericulture has been identified as offering very good prospects for development in the mid-hills and Terai belt of Nepal by experts from Japan, Korea, China and India. Agro-climatic conditions in these areas favour the cultivation of mulberry and the rearing of cocoons. The Government has set up a nucleus center at Khopasi (Kabhrepalanchwok) about 35 km. east of Kathmandu since 1975. The center initially served as a demonstration center and later expanded its activities to provide training, extension and research functions. Since 1991/92, it also functions as a major silkworm egg breeding station. Nepal has developed six bivoltine lines and these will be used to produce hybrid silkworm eggs in the country. The preferred production technology in Nepal is the temperate bivoltine technology which is simple and easily adaptable by small farmers.
On a very preliminary assessment, mulberry cultivation could be extended over an extent of 6,000 hectares which could yield around 350 tonnes of raw silk and 85 tonnes of waste silk. The value of silk fabric from this level of production could exceed Rs. 1800 mln. Private investment to encourage mulberry cultivation and cocoon rearing by small farmers could be developed successfully in Nepal. Post cocoon activities involving reeling, twisting, weaving and production of items out of silk fabric could be developed as medium-scale industries.
viii) Integrated Dairy Industry
Nepal has a long tradition in dairy farming. In fact, Nepal has in the past exported milk products to India and Tibet in the form of ghee and butter. She could develop the dairy industry to meet domestic demand as well as renew exports to India and other markets. Good prospects exist to produce yak cheese in high altitude for export to overseas markets. The topographical and climatic conditions are well suited to dairy development. An integrated dairy industry incorporating related activities such as improved livestock breeding, cattle feed production and processing of milk products would offer promising prospects for profitable investment. Such a project could be built up on existing small dairy units spread around the country through a well organized program of extension services to improve livestock breeds and an efficient collection system for processing in a central unit.
ix) Floriculture
Due to the variations in climate, topography and vegetation, Nepal has a diversity of ornamental plants and flowering plants which could be scientifically cultivated to promote export oriented business. The flower and orchid industries are increasing in the country. The commercial development of floriculture is still in a very early stage of development. The development of tissue culture initiated by the National Herbarium and Plant Laboratory at Godavari is opening up opportunities for mass production of flowers which could be exported from Nepal. Already tissue culture method of propagation has been successfully developed in the production of orchids and other cut flowers. Some of the orchid genera which have been successfully developed are coelogyne, cymbidium, dendrobium, epidedron and vanda. Among the other cut flower species carnations and chrysanthemums have also been similarly developed. Prospects for the development of floriculture business are excellent especially for the following species of orchids: cymbidiums, dendrobiums, calanthe, coelogyne. Similarly in other cut flowers carnations, gerbera, rose, gladiolus primulinus, iris polyanthes, chrysanthemum, narcissus tazella offer very good prospects. The varieties of exotic orchids-paphiopedilun, cattelya, cattelya hybrids, arachris, epidendron, mokara, oncidium and odontoglossums; exotic cut flowers - tulipa, anthurium, alstroemeria, freesia and gysophila have good prospects for commercial production.
Foreign collaboration for the development of floriculture to provide technical know-how for cultivation of flowers is required to meet the standards demanded in international markets and to provide guidance in market identification and development. The availability of direct flight connections to Frankfurt, London, Dubai, New Delhi, Singapore, Osaka, Hong Kong and Paris offer good prospects for the development of a profitable export oriented floriculture business in Nepal.
x) Processing of Spices
Nepal produces a large variety of species such as ginger, timur, large cardamom, turmeric, medicinal spicy herbs, himali cummin, cinnamon, garlic and a variety of chillies. Most of the spices cater to domestic demand and some items like chilli, turmeric, garlic, ginger and cardamom are exported to India and other markets in a raw form.
Good prospects exist for the setting up of spice processing industries using automatic, dehydration, cleaning and packing technology to export increased value added products. Foreign collaboration is required to provide technical know-how for processing and packaging and to secure marketing outlets.
xi) Mushroom Cultivation
Many varieties of edible mushrooms are found in a wild state in the Terai lowlands, the hills and mountains of Nepal. Two rare varieties similar to European types known as "Guchchi" and Cordyceps (Yarsha Gumba) are found in the hills and mountains under natural conditions. Among the cultivated varieties, agaricus bisporus, pleorotus spp. and volvariella are important. The temperature and humidity conditions necessary for growing agaricus bisporus (bottom mushroom) are very satisfactory in the hilly regions during some seasons. The pleorotus spp. (oyster mushroom) and volvariella (paddystraw mushroom) grow easily during most seasons. Kathmandu Valley has temperature, humidity and other biological factors suitable for the cultivation of these two varieties of mushrooms throughout the year. The Plant Pathology Section of the Department of Agriculture's Research Station at Khumaltar (Kathmandu Valley) is producing mushroom spawn. This unit has well qualified staff to undertake research, spawn production and for extension work.The potential for mushroom production on a commercial scale is good especially with a view to marketing overseas as fresh mushroom, dried mushroom and canned mushroom.
Xii) Coffee Processing
Coffee beans are produced in Western Development Region of the country. Though the international coffee price has increased sharply, the coffee farmers in Nepal are getting not more than 50 cents. a kg. Establishment of small scale coffee processing plant would encourage the farmers to grow more coffee beans. This industry can substitute the import and also export high quality chemical free coffee.