Sustainable Development
Sust. Dev. 20, 128 140 (2012)
Published online 29 June 2010 in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/sd.470
Sustainable Development: A Role for
Market Information Systems for Non-Timber
Forest Products
Manmohan Yadav1 and Shekhar Misra2*
1
Indian Institute of Forest Management, Bhopal, M.P., India
2
College of Business, California State University, Chico, CA, USA
ABSTRACT
The extraction and exploitation of non-timber forest products (NTFP) has been one of the
major causes of the degradation of forests in developing countries like India. The highly
unorganized and secretive nature of intermediary operations leads to market imperfections
that are usually to the disadvantage of the collectors and cultivators. This often leads to
destructive and unsustainable harvesting techniques. We provide a possible solution based
on a market information system (MIS) that can help to remove market imperfections by
providing information related to demand and supply to collectors and cultivators. This can
be helpful in promoting sustainable harvesting and also to policy-makers and implementa-
tion agencies. A conceptual framework related to an MIS for medicinal and aromatic plants,
a subset of NTFPs, is presented. The development of such MISs can not only help to reduce
unsustainable harvesting techniques but also to improve the economic condition of some
of the poorest people. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
Received 29 October 2009; revised 18 March 2010; accepted 30 March 2010
Keywords: environment; herbal products; Market Information System; medicinal and aromatic plants; sustainable development
Introduction
HERE IS A GROWING BODY OF LITERATURE RELATED TO THE PERILS OF ENVIRONMENTAL DEGRADATION AND A NEED
for sustainable development, and this has provided various perspectives on sustainability (Gunder, 2006;
Hart and Milstein, 2003; Tanzil and Beloff, 2006). A significant aspect of environmental degradation is
Tthe case of  vanishing forests , which play a vital role in maintaining the environmental balance
(Pawlowski, 2008; Singer, 2003; Trombly, 1992). Humans play a very important role in the preservation  as well
as destruction  of forest lands (Carr et al., 2005). Among other aspects, this destruction of forests increases the
risks to the maintenance of biodiversity (Spangenberg, 2007). It is also noteworthy that the sustainable develop-
ment of forests may even have implications for the maintenance of sustainable communities and cultural heritage
resource management (Keitumetse, 2009).
* Correspondence to: Dr. Shekhar Misra, Professor of Marketing, College of Business, California State University, Chico, CA 95929-0051, USA.
E-mail: [e-mail]
Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment
A Role for Market Information Systems 129
One of the major reasons for this degradation of forests in India has been the harvesting of non-timber forest
products (NTFPs) in a non-sustainable manner, substantially through lack of information and education, and this
needs to be addressed. Although similar situations exist in many other countries (e.g. Brazil and Indonesia), this
issue has gained added urgency in the case of India since the passing of the Scheduled Tribes and Other Traditional
Forest Dwellers (Recognition of Forest Rights) Act 2006, by the Government of India (Gazette of India, 2007). This
act empowers the tribal and other indigenous residents of these forests, giving them the property rights to forest
produce. Although this new law has many positive aspects, it could have unintended consequences and has been
criticized by citizen groups as a prelude to widespread deforestation as a result of the lack of information available
among indigenous people (Sethi, 2007). This new law became effective 1 January 2008.
It is now fairly well accepted that supply chain management issues can be crucial to furthering the cause of
sustainability (Vermeulen and Seuring, 2009). Market imperfections can develop in the supply chain when whole-
salers (or any player) gain and retain market power by controlling the availability of information. We address one
such situation where a market information system (MIS) can help transform a closed market to an open market
where each stakeholder in the supply chain has a level playing field in terms of market information. Existing
stakeholders as well as new ones can then use this system in a competitive manner. At the same time, the role of
the community in maintaining and developing forests is increasingly being realized (Pandey, 2010).
What Are Medicinal and Aromatic Plants?
Phytomedicines  therapeutic agents derived from plants or parts of plants  have been used by traditional health
systems in the form of herbs, plants and extracts for centuries, for health as well as for cosmetics. By some esti-
mates, as many as three-quarters of the world s populations uses one or other of these medicinal and aromatic
plants (MAPs) in some form or another (National Research Center for Medical and Aromatic Plants, 2008; Schulz
et al., 2004). This use is in the form of medicines manufactured and marketed by fi
rms of various sizes as well
as direct use of the plants (or parts thereof) by people or as directed by local health practitioners and traditional
healers. Some of the common aromatic plants in India are agarwood, basil, eucalyptus citriodora, ginger grass,
lemon grass and mentha arvensis (Sanganeria, 1998; see also CIMAP, 2008). Aromatic plants are also used in
manufacturing of food flavors, fragrances, perfumes, cosmetics and related products (Sanganeria, 1998).
Plant Resources in India and the World
The medicinal plant resources found all over the world are important because nearly 75% of the world s population
uses them. Of all the known plant species 10 18% are medicinal in nature (Schippmann et al., 2002). Table 1
shows that in India almost half of the plant species known have some medicinal uses.
A majority of species of medicinal plants are used only in traditional medicine, knowledge about which is orally
transmitted and associated with households, communities and ethnic groups. Traditional medical systems for
which there exists documentation of knowledge and practitioners employ a more selective number of medicinal
Country of origin Number of species Total number of % of flora which Reference
of medicinal plants native species in flora is medicinal
China 11 146 27 100 41 (Pei Shengji, 2002a)
India 7 500 17 000 44 (Shiva et al., 1996)
Mexico 2 237 30 000 7 (Toledo, 1995)
North America 2 572 20 000 13 (Moerman, 1998)
World 52 885 297 000 510 000 10 18 (Schippmann et al.,
2002)
Table 1. Medicinal flora across the world
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130 M. Yadav and S. Misra
Traditional medical system No. of plant Reference
species used
Traditional Chinese medicine 500 600 Pei Shengji, 2001
Mongolian medicine 1430 Pei Shengji, 2002b
Tibetan medicine 1106 3600 Pei Shengji, 2001, 2002b
Ayruveda 1250 1400 Dev, 1999
Unani 342 Shiva et al., 1996
Siddha 328 Shiva et al., 1996
Table 2. Use of medicinal flora in traditional health systems
plant species. As Table 2 indicates, the number of medicinal plants used in Ayurveda is higher than in some other
systems of medicine. There are other systems of medicines current in India such as Unani and Siddha, as well as
folk medicine. Western (allopathic) medicines also use some medicinal plants as ingredients.
Aromatic plants are used to extract essential oils, spice oils and oleoresins in India. Of the large number of plant
species found in India, some 1300 species are known to contain aromatics. Even though such a large number of
plants possess these aromatics, only about 65 species have a large and consistent demand worldwide. Aromatic
plants are also used in the manufacturing of products like food flavors, fragrances, perfumes, cosmetics and related
products. (Sanganeria, 1998)
The Market for MAPs
According to the World Health Organization herbal preparations account for 30 50% of total medicinal consump-
tion in China, while in Germany 90% of the population has used a natural remedy at some point in their life. In
the USA 158 million adults use complementary medicines and herbal supplements (WHO, 2003). The global
market for herbal products, including medicines, health supplements, and herbal beauty and toiletry products, is
estimated at US$62 billion and is growing at a rate of 7% annually (Exim Bank, 2003) and is expected to grow to
US$ 555 billion by 2010 (Sinha, 2002). The WHO s forecast is that the global market for herbal products would
be of the order of US$5 trillion by 2050 (Planning Commission India, 2000). The world market for herbal
remedies in 1999 was estimated to be worth US$ 19.4 billion, with Europe in the lead (US$ 6.7 billion), followed
by Asia (US$ 5.1 billion), North America (US$ 4.0 billion), Japan (US$ 2.2 billion), and the rest of the world
(US$ 1.4 billion) (Laird and Pierce, 2002).
The overall herbal market in India was estimated to be about US$ 1.75 billion in 2008, with exports accounting
for about US$ 900 million, and these numbers were expected to more than double by 2012 (Sharma, 2008). The
domestic market of Indian Systems of Medicine and Homoeopathy was of the order of US$ 1 billion in 2000. Of
this, the Ayurvedic drug market alone was of the order of US$ 800 million, which has been expanding fast because
of a resurgence of interest in natural and herbal remedies (NMPB, 2004).
Ninety per cent of the raw material for herbal products comes from the forests. It has also been observed that
70% of medicinal plants involve destructive collection because the parts used are wood, roots, stem, bark or the
whole plant. Even in 2002, 90 95% of the raw material for domestic production was supplied from wild sources,
and fewer than 20 out of 660 wild plant species that are traded in India are under active commercial cultivation.
(CEE, 2003).
Market Issues for MAPs
The MAP market in India is an oligopsony, with relatively few well-informed (and secretive) buyers and a very
large number of ill-informed sellers. The limits on information from the demand side are intentional for the
purpose of artificially manipulating the market price in their favor, whereas the information flow from the sellers
Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment Sust. Dev. 20, 128 140 (2012)
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A Role for Market Information Systems 131
is unintentional. Such opaque market structures are disadvantageous to the collectors and cultivators and also lead
to overharvesting of the natural resource in the absence of reliable and accurate information about market demand
and price. These markets suffer from the following imperfections (Dutta, 2001):
" Lack of proper information about the demand and supply of the products being traded
" Lack of assured markets for the collectors and cultivators
" Unique characters of medicinal plants and uncertainty regarding their availability
" Inadequate knowledge about the herbs being collected, cultivated or traded
" Quality issues in collection of medicinal herbs and the processing of final products
" Stakeholders not aware of intellectual property rights issues related to the medicinal plant products
" Market barriers for new entrants in a closed market with scarce market information
" Problems in marginal cost pricing of the medicinal herbs, i.e. with sellers unable to receive fair value.
There has also been depletion of medicinal plant resources as the result of irregular and unscientific collection,
uncontrolled forest grazing by cattle, forest fires, shifting cultivation patterns, and biotic pressure, well beyond the
carrying capacity of the land given the burgeoning human as well as animal population in India. The government
organizations and non-government organizations (NGOs) that attempt to help the cultivators and collectors are
also severely hampered by the absence of reliable and accurate market data.
In India the sale of the medicinal herbs grown in the wild is usually by locals with the herbs in their raw form
without any significant processing or value addition. The producer/collector access to consumers is limited to sales
made in local villages or in the weekly village markets. A major portion of their collection is sold to intermediaries
like contractors and commission agents who operate in the area, before they get to the organized sector. The market
is also geographically limited. Access-to-market issues are more pronounced in the case of perishable items or
items containing active principles, which change or deteriorate with time. The relatively small volume of collection
further aggravates the problem, forcing the local tribal population into a vicious circle of a small market, low pro-
duction and (leading to) small marketable surplus. This limited marketable surplus makes them more vulnerable
and makes their exploitation possible because it continuously erodes their bargaining capacity as their need for
conversion of small production into cash becomes more acute. Wide variation in the content of active principles
of the wild varieties of medicinal herbs constitutes yet another supply-side imperfection. Such variations complicate
the process of manufacturing herbal medicines and affect the efficacy rates and quality control. Scientific cultiva-
tion of medicinal plants through bioengineering and modern farming techniques could overcome this problem,
but progress in this area is almost non-existent.
Some of the consequences of market imperfections are the lack of information to the needy stakeholders and
posing obstacles in the path of commercial exploitation of MAPs in a sustainable manner. In India, availability of
reliable data continues to be an issue; even the statistics for demand, supply and trade related to timber, which is
a major produce from the forests, are not reliable and accurate (ITTO, 2003). Similarly, the statistics for Non-Wood
Forest Produce are also only estimates and reliable data on exact inventory, extraction and trade are not available.
One of the consequences, as identified in a study by the Associated Chambers of Commerce and Industry of India
(Assocham), is that over 70% of the plant collection involves destructive (non-sustainable) harvesting because of
the use of parts like roots, wood, stem and the whole plant, whereas traditionally other parts like the (renewable)
leaves and fruits were preferred This problem has increased because demand has been growing very rapidly. This
poses a threat to the genetic stock and is not sustainable (Sharma, 2008).
Complexity of the MAP Market Structure and Supply Chain
The MAP market is highly complex with a large number of players at the producer, trader and manufacturer levels.
The complexity of the MAP market is further accentuated because of the different forms of the herbs traded, the
lack of proper herb identification and final product classification systems, the lack of governmental control and
monitoring of the markets, and an absence of assessment of MAP inventory available in the forests. Each of these
problems is discussed here. Supply of medicinal plants occurs from wild harvest as well as cultivation. The local
villagers either consume part of their produce or sell it to local traditional medicine practitioners, local traders,
Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment Sust. Dev. 20, 128 140 (2012)
DOI: 10.1002/sd
132 M. Yadav and S. Misra
local markets or agents. The middlemen at various levels collect and sell the produce to the next level with the sole
objective of making maximum profit in the short term. The complex supply chain is outlined in Figure 1.
Even the largest retailers  who could and do perform some wholesaling functions  are forced to buy medicinal
plants from the oligopolistic wholesalers who command high margins. This is a result of the lack of market access,
which results in lack of information on the part of these businesses about the source, supply and price of medicinal
plants. The issue is magnified at the national level. The MAP produce is traded in various forms, such as raw,
semi-processed or processed, and through various channels; this makes demand assessment at the local level dif-
ficult. At the manufacturer or processor level there exist a large number of primary and intermediate processors.
Initial processing may be carried out by the collectors or cultivators whereas some intermediate processors buy
the herbs from collectors and local traders, process them and sell them to larger manufacturers or at the local
markets. The presence of multiple levels of processors and users, traders, manufacturers and exporters combined
make the market structure complex and the reliability of data is very low.
Figure 1. Market structure in medicinal and aromatic plants trade
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A Role for Market Information Systems 133
Lack of Proper Herb Identification and Final Product Classification
A single herb may be identified by different names at different regions and in different languages in different
parts of India. This leads to incorrect quantity figures in cases where the local name for each herb is not correctly
identified to its equivalent scientific name. The presence of large numbers of species and languages makes the
generation of national level statistics a challenge, hence the greater reliance on estimates rather than precise data.
Development of classificatory codes for herb-based trade could help proper gathering and consolidation of data
related to trade in herb-based products.
Lack of Governmental Control and Monitoring of the Markets
Unlike the control and monitoring mechanisms of the government on production, pricing and supply of the staple
food commodities, MAPs are not covered under monitoring mechanisms. Government intervention in developing
infrastructure for marketplaces, leading to a competitive market for MAPs, apart from increasing the MAP trade
will also facilitate the monitoring of prices, supply and demand.
Absence of Assessment of MAP Inventory in the Forests
At present, governmental institutions have no system for assessing the forest inventory of MAPs. Assessment of
MAP inventories, similar to the methods applied to timber, will lead to sustainable use of the forest MAP resources
by means of better policy and planning decisions based on the more reliable data.
Potential Role of a Market Information System
Most stakeholders would find it useful to have regular access to information on production trends, prices for
specific product lines, product availability, market channel opportunities, and any other information of potential
competitive value. The preceding discussion of the present status of information availability and reliability high-
lights the need for an MIS for the MAP sector at local, state and national level in India. In the case of staple food
commodities and timber the establishment of an MIS has proven effective in providing reliable and consistent
information (FAO, 2000; FAO, 2009; Gera et al., 2003; IGAD, 1996; Koppel, 1995). The need and potential utility
of an MIS for MAPs is now discussed.
MIS Application in Eliminating the Demand Supply Gap
Delay in information transfer from demand side to the supply side can result in time loss in meeting customer
demands and/or not fulfilling total demand because of limited availability. Lack of demand information also limits
the value realization for producers. Apart from the lack of real-time information there can be other causes for the
gap between demand and supply of MAPs like poor cultivation and collection practices, inefficient processing and
storage, and other market imperfections. These include the short-term orientation of wholesalers who attempt to
maximize profitability from growing season to growing season.
Eliminating Poor Cultivation and Collection Practices
This problem by and large exists as a result of a lack of proper knowledge among the stakeholders in the supply
side and needs to be addressed. Incomplete knowledge and understanding about the types of plants to be collected,
the parts to be collected, and the form in which they are to be collected so as to preserve their active principles all
adversely affect supply. A MIS could potentially disseminate this required information to the collectors and cultiva-
tors to ensure the quality and quantity demanded. Yet another impact of lack of knowledge is the continuation of
unsustainable practices of collection used. According to the CERPA demand and supply study (CERPA, 2001), the
supply of some of the medicinal plants is dwindling as the result of unsustainable harvesting practices. That same
conclusion was also reached by a study conducted by Assocham (Sharma, 2008).
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134 M. Yadav and S. Misra
The role of MIS is as a decision support system to make decisions regarding the induction of the plant species
in the appropriate danger level (including putting in negative list). The logic of such a decision support system
can be based on criteria and indicators for assessing the sustainability of specific medicinal plants. Captive cultiva-
tion by industries, where the finished product manufacturer invests in a plantation that produces some of the raw
materials, particularly ones that are limited in terms of supply or which are not allowed to be legally collected from
the wilderness. Presently some of the manufacturers are averse to captive cultivation because of limited knowledge
and expertise about the species and their characteristics, as well as a lack of market data. Some manufacturers
though already have captive cultivation, which can be relied upon. According to one study, manufacturers also
require an MIS to provide information regarding species identification (66%), new uses of herbs (68%) and alka-
loid analysis (55%) (Majumdar, 2001). The information so provided in an organized manner and at accessible
locations can motivate more manufacturers to go for their own captive cultivation, reducing the pressure on the
forests. Limited cultivation of medicinal plants as a cash crop by farmers tends to be yet another problem. One
course of action would have the Forest Department fix a  reserve price for wild collections. The role for MIS lies
here in disseminating information regarding the reserve prices set by the Forest Departments. Also, MIS may lead
to better interaction between the manufacturers and the suppliers.
Improving Processing and Storage Techniques
Knowledge about techniques and recent developments regarding the proper handling of perishable herbs, produc-
tion of herbs with maximum active contents, and minimization of loss of active contents during processing can
be best disseminated through an MIS (in printed form where the electronic system is not feasible). This can also
enhance the value realization of the suppliers.
Removing Market Imperfections
Demand and supply side imperfections can be dealt with by the real-time market information provided by an MIS
along with the additional information regarding cultivation technology, species recognition and by promoting
sustainability measures. Another market imperfection of the marginal-cost pricing system can be solely attributed
to the presence of large numbers of middlemen between the collector/cultivator and the end-user, who block the
price-related information for their own benefit. Implementation of MIS will lead to flow of data like demand and
price changes to the collectors/cultivators and other recognized stakeholders. This will result in a transparent and
demand pull based supply chain, ensuring a due share of benefits to the primary collectors/cultivators.
MIS Application in Generating Awareness About Quality and Property Rights
The quality of raw material or the resultant final product is a low priority for some of the medicinal plant industry
stakeholders. Though the product manufacturers tend to be most concerned about the quality of the inputs, they
are not able to maintain quality. With the industry growing at >20%, and demand exceeding supply, manufactur-
ers are more inclined to meet the growing demand for the final product without paying much attention to raw
material quality. As a result of the large number of collectors and middlemen, with a high degree of variability
between them, the quality concerns of the manufacturers are difficult to implement at the best of times. Removing
market imperfections through smooth flow of information between the collectors/cultivators and the manufactur-
ers can provide a key to overcoming poor quality problems.
MIS Support in Documentation of Traditional Knowledge
In India traditional knowledge of use of plant-based medicines/formulations has been well accepted in various
sections of society but such knowledge has not been well documented. This vast domain of knowledge lies scat-
tered among practicing vaidyas (traditional health practitioners/healers), researchers and tribal people, and the
documentation of this is a mammoth task. Although some of it is documented in ancient texts, a significant portion
of this knowledge base has been passed on within families and not documented appropriately. This has resulted
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A Role for Market Information Systems 135
in the degradation of and restricted growth of the traditional knowledge and could benefit from proper documenta-
tion. Apart from the traditional uses, there are uses devised by newer practitioners with success. The continuous
documentation of such new uses could be the dynamic part of a resource building for the consumers as well as
manufacturers, which will ensure future sustainable demand for herbal products. An MIS can be the ideal platform
for housing such information as well, and can be accessed by all the stakeholders of the medicinal plant industry.
This documentation of the uses of medicinal plants can be backed up by the proper identification database of the
medicinal plants available in India.
MIS Application in Sustainable Resource Usage
The data based on demand, uses and price of different MAPs and their dissemination to various stakeholders will
provide incentive to manage resources in a sustainable manner for long-term economic returns capability. Simi-
larly the information on better storage management and processing technologies will help to reduce waste and
encourage better use of the resource. MIS application can help to develop an organized market structure that would
be transparent and more effective. Organized markets are generally more stable and are considered to be beneficial
to all stakeholders.
MIS Application for Better Economic Returns to Collectors/Cultivators
The UN Conference on Environment and Development held in 1992 has already recognized the role of Non-Wood
Forest Products in sustainable management of forests. One of the important steps in realizing these prospects is
to ensure better economic returns to collectors of medicinal plant parts. Middlemen often exploit collectors igno-
rance of market factors and claim a disproportionate share of value for themselves. With increased availability of
market information, producers will have the potential to strengthen their position in markets and obtain better
value realization. This should reduce their incentive to overharvest, and practice sustainable harvesting
techniques.
MIS Application in National Trade Database Creation and Policy-making
The adoption of an MIS structure at national level along with the local and state level MIS, will enable the estab-
lishment of a national-level database on the supply, demand, prices and uses of MAPs. Such a database with proper
management will help to make suitable policy changes at both national and state levels. Such an enabling policy
framework will further the development of the MAPs sector.
Proposed Framework for a MAP MIS
The present reporting framework for production and consumption of both timber and other NTFPs in the country
does not provide data for generating a true picture of the MAP trade going on at the national level or at state level.
The data about trade at each district level is also not available.
Goals of the MIS
An open market is a market where market factors such as demand, supply and quality may determine the price
of the products traded in the market, with each market player competing with others. Hence, the primary objective
of the MIS would be to transform the market from a closed market to an open market where each stakeholder,
whether an established one or a new one, at his supply chain level gets a level playing field in terms of market
information, which he can use in a competitive manner. Such competitiveness by the power of knowledge may
benefit all the stakeholders at all levels of the supply chain.
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136 M. Yadav and S. Misra
As the majority of the market supply of MAP is based on forest produce, it is equally important for the MIS
to monitor the status of the forest resources to cater to the needs of the market in the long run. This brings in
the issue of sustainable harvesting, constant monitoring of resources, and presentation of resource usage infor-
mation to the policy-makers and decision-makers so that timely action can be taken to ensure sustainable avail-
ability of MAPs to the market. To achieve this market transformation the primary goals of the MIS would be as
follows.
1. Ensure the availability of information throughout the MAP supply channel as well as to the policy-makers.
2. Ensure sustainable extraction of medicinal plants from the forest resources.
3. Guide the decision-making process of the channel members and policy-makers by means of projected informa-
tion provided by the MIS.
4. Eliminate the information gaps found between suppliers and the ultimate manufacturers of herb-based medi-
cines, resulting in a transparent open market as opposed to the present closed market.
5. Encourage new entrepreneurs to take up business in the medicinal plant trade by providing them with the
necessary information about market structure, prices, trends and future projections through training organiza-
tions like CEDMAP, and providing even newcomers with a level playing field.
6. Scale the medicinal plant information system up to international standards by proper classification of raw as
well as finished products. Incorporating the Harmonized Commodity Description and Coding System (HS-
Code) of international trade will help proper monitoring of the medicinal plant trade domestically as well as
internationally.
7. Disseminate critical information related to medicinal plant identification, uses and processing techniques to
existing stakeholder and to new entrepreneurs.
8. Disseminate information regarding quality standards, government regulations regarding quality, packaging and
labeling.
To achieve the goals of the MIS it has to be effective in the sense that it should remove the information barrier
present between the stakeholders present at the lower level of the supply chain (collectors/cultivators) and those
present at the higher level (processors/manufacturers).
The suggested MIS framework shall be primarily based at the district/forest division level, which then must be
aggregated at the state level from where it is to be connected to the national information system. The various
stakeholders and the type of information needed/supplied at each level in the suggested MIS framework are shown
in Figure 2.
The marketing information system receives the input data (enlisted in the following paragraphs) from cultiva-
tors, forest management officials, importers, exporters, traders, manufacturers, and seed/mother plant providers.
The sub-parts of Figure 2 describe the specific data flows between the MIS and the various stakeholders.
Similar to the other users communicating with the system, the MIS department itself is also considered as a
user by the MIS. The MIS department uses the system resources to enter the periodical survey data, data access
policies for the registered stakeholders, and information on recent government policies. The MIS department also
queries the system for periodical market reports and for frequent customized reports.
Input
Inputs to the system define all the data which flow from the stakeholders to the central system. These survey data
are received as soft copies or printed copies from the nodal centers. This would include: price and availability of
products at local/regional/national levels; names and addresses of traders and other stakeholders; transportation
information and so forth.
Analysis
The above input received by the system will be analyzed to provide information about not only the current supply
and price but also trends in demand, prices at different markets, transportation costs, and other data of
relevance.
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A Role for Market Information Systems 137
Figure 2. The market information system (MIS) framework with its stakeholders. (a g) Information exchange between the MIS
and (a) cultivator unions, (b) forest department, (c) traders, (d) importers
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138 M. Yadav and S. Misra
Figure 2. Continued. (e) exporters, (f) manufacturers/pharmacies, and (g) MIS department
Output
The analyzed information will be output by the system in the form of reports, which may be online or in published
form. In addition to the prices and trend analyses, the system would provide information related to trade leads
and demand forecast. These would be supplemented with expert analysis and research, as well as other useful
information mentioned earlier. The frequency of the reports may depend upon the medium through which they
are disseminated to the stakeholders.
This suggested MIS is only a conceptual framework and needs to be tested in the field before it is refined and
finalized for its actual implementation. The federal government of India should finance this MIS for the first 10
years. Once the system is widely accepted a protocol would have to be devised where users finance the ongoing
cost through levies.
Conclusion
The market for MAPs in India is a closed market with little transparency. Current practices lead to collecting and
harvesting techniques that are not sustainable, and more so given the rapidly increasing demand for MAPs. One
of the reasons for  overharvesting and other unsustainable techniques is because of the low value realization by
the primary collectors/harvesters who live in the forests. Value realization for them can be enhanced by removing
market imperfections that result in benefiting the large consumers and the middlemen, at the cost of the primary
collector/harvester. Even policy-makers and implementation agencies, including NGOs, can benefit significantly
from the better availability of information.
An open market is a market where market factors such as demand, supply and quality determine the price of
the products traded in the market, with each market player competing with others. Therefore, the primary objec-
tive of the MIS may be to transform the market from a closed market to an open market where each stakeholder,
whether an established one or a new one, gets a level playing field in terms of market information, which he uses
to market his products in a competitive manner. Such competitiveness by the power of knowledge/information
may benefit all the stakeholders at all levels of the supply chain. An MIS will also be helpful to NGOs, civil admin-
istration and others in providing appropriate guidance and advice to the harvesters/gatherers/producers with the
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A Role for Market Information Systems 139
goal of improving their incomes as well as of educating them about better harvesting practices. As the majority of
market supply is based on the forest produce, it is equally important for the MIS to monitor the status of the forest
resources to cater to the needs of the market in the long run. This brings in the issue of sustainable harvesting,
constant monitoring of resources, and presentation of resource usage information to the policy-makers and
decision-makers so that timely action can be taken to ensure sustainable availability of MAPs to the market. The
policy approach for augmentation of supply position and sustainable use of medicinal plants should include a
combination of institutional, economic, administrative and legal agenda.
While the increasing demand for herbal products will put further pressures on the already overexploited forest
resources, it is high time to promote cultivation of MAP on the farm and on degraded lands. This alternative
supply will not only reduce pressures on the collection from the forests but will also help in standardization of the
quality of raw materials, which has been one of the major obstacles in establishing the efficacy and credibility of
the traditional health product formulations. The setting up of the national medicinal plants board by the govern-
ment of India in 2002 was certainly a step in the right direction but much more needs to be done to collate all
the available information regarding medicinal plant development in the country so as to obtain a comprehensive
overview. This will provide the necessary insight for coordinated and effective action to cope with the expanding
global herbal market. Such an overview could form the basis of a renewed development of India s medicinal
plants sector, and a strategic exploitation of her comparative advantage in the global market on a sustainable and
equitable basis.
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