National Medicinal Plants Board under the Department of Ayush has received a six to seven fold increased the funding under the 11th plan. Although, the details of the outlay were not available, it is indicated that a substantial portion of the outlay is for the cultivation of plants in high demand.

Under the 10th Plan, Rs 72 crore was released as subsidy for cultivation to the farmers in different states. The board has been providing financial assistance for cultivation of medicinal plants to ensure that supplies are regular and to prevent its extinction.

In this regard, the NMPB has proposed to the herbal industry in the country to identify clusters for the cultivation of selected medicinal plants. The industry representatives include the Ayurveda Drug Manufacturers Association, Ayurveda, Unani and Siddha units and herbal extract manufacturers.

NMPB considers that the financial support for cultivation is directly linked to the industry. In this way, the industry could come forward to enter into a buyback agreement with growers cooperatives/ associations/Self Help Groups (SHGs) in selected clusters, according to B S Sajwan, head, NMPB in a letter dated May 7, 2008 via F. No. Z - 18020/17/2008/ NMPB to the industry.

The board has called to pinpoint the regions in the country which the industry would like to cover for cultivation of selected medicinal plants and organize growers into cooperatives, associations, SHGs and get bankable proposals prepared for assistance under NMPB scheme. The industry also needs to facilitate supply of Quality Plant Materials (QPM) quality seeds, technology dissemination along with a buy back for the purchase of raw material.

The proposal would be appraised by a scheduled bank, and could be forwarded to State Medicinal Plant Boards which in turn, after necessary scrutiny would forward to NMPB together with their recommendation. This is essential as the NMPB subsidy is credit linked. Further, it was also highlighted that the Board would like to provide support for cultivation only if proper backward and forward linkages are indicated by the industry.

In the absence of proper marketing linkage farmers do not get remunerative prices for their produce which resulted in discontinuing cultivation after the initial one or two years. Though there is a system of a pact between the grower and the buyer, it is rarely enforced and often it is the farmer who is the looser. On the other hand, the industry continues to source most of its raw material from the traders. Therefore, there is a disconnect between the growers and the industry, stated NMPB.

The Department of AYUSH, is providing assistance to the Special Purpose Vehicles (SPVs) constituted for AYUSH industry clusters during the 11th Plan. The SPVs are advised to identify cultivation clusters in adjacent areas so that cultivation and processing can be synergistically linked. The SPVs may simultaneously come up with proposals for financial assistance under NMPB schemes to the cooperatives/SHGs of farmers for cultivation in clusters of the medicinal plants species relevant to the agro-climatic region.