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RESEARCH INFORMATION SERIES ON ECOSYSTEMS

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.

The integration of medicinal plant as a crop in agroforestry is a relatively new approach


that is beneficial to the local people, whether they are lowland or upland farmers or most
especially, the indigenous people. The Ecosystems Research and Development Bureau
(ERDB) of the Department of Environment and Natural Resources (DENR) is publishing
this issue on medicinal plants as a profitable farming technology to serve as a guide in
the development of small backyard herbal gardens, community-based herbal plantation
or urban herbal park. This can help boost the Philippine herbal industry by providing
adequate supply of raw materials for local as well as global needs.

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.

The Ecosystems Research and Development Bureau (ERDB) of the Department of


Environment and Natural Resources (DENR) in collaboration with the Chamber of
Herbal Industry of the Philippines (CHIPI), PITAHC-DOH, other government agencies,
and private sectors had shared their knowledge and workshops and exhibits on the
production and management of medicinal plants. These collaborative efforts are geared
to develop community-based herbal plantation in public lands or private farm lots.

These endeavors provide solution to the problem of pharmaceutical companies on the


limited supply of raw materials for herbal production. At the same time, it creates
livelihood options for upland dwellers and indigenous people in the countryside.
Likewise, it helps increase awareness and recognition of the value of medicinal plants in
rehabilitating the upland forest ecosystems. It helps promote conservation of forest
biodiversity aside from serving as a potential material source of alternative medicine for
people on research areas.

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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:

a. Commercial available drugs from medicinal plants

• 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)

• Ampalaya (Momordica charantia L. var. Makiling) – relief for diabetes mellitus

• Ulasimang bato (Pepermia pellucida (L) HBK) – anti-hyperrurecemic

• Tsaang gubat (Carmona refusa (Vahl) Masam) – anti-motility

• Mutha (Cyperus pudica) – relief for malaria

• Makahiya (Mimosa pudica) – relief of diarrhea

• Yerba Buena (Mentha cordifolia Opoz.) – analgesic

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.

Financial benefits from medicinal plants and products

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

Plant Fresh materials (kg Dried materials (kg)


Plant part Pick-up Delivered Pick-up Delivered

1. Lagundi leaves 12.00 20.00 200.00 300.00


2. Sambong leaves 12.00 20.00 200.00 300.00
3. Ampalaya leaves 15.00 50.00 200.00 300.00
Makiling var.
4. Akapulko leaves 10.00 15.00 100.00 200.00
5. Banaba leaves 12.00 15.00 150.00 200.00
6. Yerba Buena leaves 20.00 40.00 200.00 300.00
7. Tanglad leaves 10.00 15.00
8. Malunggai leaves 15.00 25.00
w/stalk
pure leaves 30.00 50.00
9. Tsaang gubat leaves 20.00 40.00
10. Pansit- leaves 5.00 15.00
Pansitan w/ stalk
11. Takip-kuhol leaves 5.00 15.00
w/stalk
12. Saluyot leaves 20.00 40.00
13. Ginger rhizome 40.00
To
60.00
14. Siling labuyo fruit 65.00

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

1. Ampalaya (Makiling variety): leaves


Year 1
• No. of harvests 48
(twice/week x 4 weeks x 3 mo. X 2 crop season)
Amount (Php)
48,000.00
• Total fresh weight (kg per year)
(1,000 kg/harvest)
• Weight after drying (kg per year) 7,200.00
(48,000 kg x 15% recovery)

• Estimated cost of production:


Cost of materials (seeds, organic 106,200.00
Fertilizer, and pesticides, etc.)
Cost of labor (land preparation, clearing 792,000
Harvesting, air drying, etc.)

• For drying of materials with additional cost of:


Oven type dryer & maintenance 120,000.00

• Gross income on fresh leaves at Php30.00/kg 1,440,000.00


• Gross income on dried leaves at Php300.00/kg 2,160,000.00

• Estimated net income on fresh leaves 421,800.00


• Estimated net income on dried leaves 1,141,800.00

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)

Estimated cost of production: Amount (Php)


• Cost of planting materials for one hectare with 100,000.00
Spacing of 1.0 x 1.0 meter (10,000 plants/ha
x Php10.00/plant)
• Cost of labor (clearing, weeding, 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 (non-use of pesticides) 10,000.00
• Cost of water management 2,000.00
• Total cost of production for fresh materials 237,000.00
• Gross income for fresh leaves 400,000.00
(Estimated harvest: yield 10,000 kg/ha x Php20.00/kg
of fresh leaves x 2 times harvest)
• Estimated net income on fresh leaves 163,000.00

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)

Estimated cost of production: Amount (Php)

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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

• Gross income for fresh leaves 400,000.00


(Basis: yield 10,000 kg/ha/yr x 4 harvest x Php10.00/kg

• Gross income for dried leaves


(Basis: yield 40,000/kg/ha/yr fresh leaves x
15% recovery x Php100.00/kg)

• Estimated net income on fresh leaves 233,000.00


• Estimated net income on dried leaves 323,000.00

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.

Annual Reports of the PITAHC-DOH. 2000 and 2001.

Domingo, R.M. 2002. Marketing experiences of herbal medicines. Paper presented


during the training on the “Production Management of Medicinal Plants”. Sta.
Catalina, Atimonan, Quezon. July 17-19, 2003.

Quintana, E.Q. 1999. A primer on growing medicinal plants. University of the Philippines
at Los Baños, College, Laguna

Business World. August 14, 2002. Manila.

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Figure 1. Stages of activities in the production of medicinal plants

Fresh Leaves Operation Dried Leaves Operation

Nursery Operation Oven Drying & Milling

Plantation Sterilization
Establishment
& Management
(clearing, weeding,
planting & maintenance

Harvesting Packaging

Cleaning & Washing Releasing

Air Drying Delivery to


Manufacturing Plant

Source: Data gathered from the interviewed done with Mr. Alex Parducho,
Farm Manager, Altermed Corporation

Appendix 1. List of some producers of herbal and medicinal product in the


Philippines

Name of Company Contact person Location

1. Allied Express Wilson Tong 1165 Benavidez,


International Import Sta. Cruz
And Export Corporation Metro Manila
Telfax No. 723-2168

2. Altermed Corporation Dr. Francis Gomez 817 EDS, South


Sister Triangle Quezon City
Company of Pascual Telfax No. 925-8469
Laboratory

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3. AM Southern Enterprise Antonio Malaya, Jr. 42 New Orleans St.,
Cubao, Quezon City
Tel. Nos. 723-3159/
416-6331

4. Amazing Touch Rolando dela Cruz Condo II, Balong


International Lydia dela Cruz Bato, Quezon City
Tel. Nos. 366-7894/
365-4001

5. A2Z Marketing Zenaida Uy Corporation #50 Lockheed St., Concord


Village, MIA Road, Tambo
Parañaque

6. BioEssence Facial Dr. Emma Beleno- 57 Examiner St., West


Slimming Center Guerrero Triangle, Quezon City
Telfax No. 372-9910

7. CARD Industries Agnes Car c/o 52 Jaquar St.,


Fairview, Quezon City,
Tel Fax No. 939-6208

8.Carica Herbal Health Ramon Tan Products 2626 Dian St., Makati City
Telfax No. 302-6154

9. Circle of Life Mylene de Joya U-6 Wack Wack


International Corp. Shaw Blvd.
Mandaluyong City
Tel. No. 726-6387

10. CRD Herbal Products Ma. Carlita Rex-Doran 52 Jaquar St.,


Fairview, Quezon City
Tel. No. 938-1763

11. Dalia Herbal Enterprise Aleli Pansacola 63 San Rafael St.,


Community Bo. Kapitolyo, Pasig City
Tel. No. 637-5153

12. Eurochemical Jessie Plana 3rd Flr. Agoho Bldg.


Incorporation 5023 P. Burgos St.,
Makati City
Tel. No. 897-1874

13. Fragrance World Ellen Co 9390 Calamba St.,


San Antonio, Makati City
Telfax No. 895-1889

14. Goldwin Manufacturing Edgardo De Guzman GMCL Bldg. # 50


Corporation Laboratory Champaca St., Marikina
Heights, Marikina City
Telfax No. 940-2986

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15. Herbcare Enterprise Horacio Abelarde PDC Commercial Center,
Pilar Village, Las Piñas City
Tel. No. 802-2222

16. Kisap Beauty Care Ricardo Aquino 1914 D. Gutierrez St.,


Products Gil Zombra Pasay City
Tel. No. 400-4037

17. Net Care Marlon Saldi 41 D. Narra St., Project 3,


Quezon City
Tel. No. 913-3286

18. New South Star Drug Corazon Dy 73 C. Shaw Blvd.


Mandaluyong City
Telfax No. 531-6950

19. Rita Riz Bake House Rita Carmela Santiago 151 Alley 1 Proj. 6
And Food Products Quezon City
Telfax No. 928-5942

20. Ever World Trading Elsie Saavedra 47 Valderama St.,


Zamboanga City
Telfax No. 991-0293

21. Reneur Cosmetics Dr. Rainier Villanueva 406 G. Reyes St.,


Laboratory Inc. San Juan, Metro Manila
Telfax No. 727-2129

22. Securisafe Enterprise Era Ocampo 2nd Flr. Virka Bldg.


Eufracio Ocampo Roosebelt Avenue,
EDSA, Quezon City
Telfax No. 641-9271

23. SK Laboratories, Inc. Wilfredo Tuangui 7 Saturn St., PGV


Rosario, Pasay City
Telfax No. 641-9271

24. Sol Y Viento Phyto Dr. Vicente Escobar Km 55.5 Pansol


Theraphy Research Calamba City, Laguna
Center Tel. No. 413-4552

25. Sto. Niño Botanical Pedro Montañez 55 New York St.,


Center Provident Village Marikina City
Telfax No. 933-1771

26. Trenton Marketing John Peter Liu U-2105 Jolibee Plaza


Corporation Bldg., Emerald Avenue,
Pasig City
Telfax No. 643-5879

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27. Osaka Iridology Geraldo Robles National Wellness Center
Quezon City
Tel. No. (033)509-9688

28. Vilcru Company, Inc. Nelin Ching 406 G. Reyes St.,


San Juan, Metro Manila
Tel. No. 727-2129

29. Villa Jireth Japeth Helyn Escano Ugong Labrador


Holistic Pangasinan
Telfax No. 926-8622

30. Dr. Romero Paduga Dr. Romero Paduga Lot 112 Blk. 1, Mandarin
St., Pleasant Village,
Muntinlupa City
Tel. No. 861-0733

31. Veraluz International Luz de Vera 1803 18th Floor, Global


Antel, Corporation Center
Quezon City
Tel. No. 634-8883

32. Sirawan Foods Jing Reyes 2281 Pasong Tamo Street,


Corporation Makati City,
Telfax No. 816-7185

Source: Chamber of Herbal Industry of the Philippines, Inc. Quezon City 2001
(For specific product line produced, contact the manufacturers)

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