After successfully completing its pilot of growing medicinal and aromatic plants (MAPs) in Madhya Pradesh last year, ITC Ltd is looking to scale up the project. Plans are afoot to consolidate and strengthen its presence in central India and then move into other geographies, including the southern and northern parts of the country.
According to Rajnikant Rai, Divisional Chief Executive, Agri Business Division, ITC, the company will expand its presence into five districts of Madhya Pradesh, up from the current three and almost double the area under cultivation of such plants to around 10,000 acres (5,000 acres at present) this year.
“We completed the pilot last year and have started commercial production, albeit on a small scale. We want to make it large and go to multiple states. By 2022, we will try to go out of Madhya Pradesh and reach about 25,000 acres,” Rai told BusinessLine .
While the future expansion or selection of geography and the replacement crop would depend on the economics of the region, the company is looking at adding one southern state (Andhra Pradesh, Karnataka or Tamil Nadu) and one from the northern part from either Uttarakhand or UP border in its next phase of expansion.
Lower cost and higher returns
Sharing details about some of the key outcomes of the pilot project, he said, medicinal and aromatic plants such as tulsi and ashwagandha, which were used to enable crop diversification against traditional crops like soyabean and wheat, widely grown in Madhya Pradesh, yielded better profits at a much lower cost.
While soyabean gave an average profit of around ₹5,000-6,000 an acre, tulsi which was used as an alternative crop for diversification from soyabean delivered a profit of around ₹14,000-15,000 an acre. The average cost incurred per acre for growing soyabean is around ₹11,000/acre, while the same for tulsi is around ₹8,500 an acre.
In line with Chairman Sanjiv Puri’s vision to make a meaningful contribution to the agricultural sector, ITC started looking at this category (medicinal and aromatic plants) mainly to encourage Indian farmers to come out of the habit of resorting to monocropping which leads to high water usage and hence, depletion of water resources. A farmer who is into monocropping is also impacted by the changes in demand and supply as it affects the prices.
So a diversification to such plants that incur low input costs, calls for lower maintenance and labour and gives a better return, would put the farmer on a better footing.
Potential for growth
The market for medicinal and aromatic plants is estimated to be close to $129 billion globally and has been growing at around 7 per cent on year-on-year basis. As compared to this, the market for such plants in India is estimated to be around $1 billion (just 1 per cent of the global market) but has been growing at around 14-15 per cent annually, he said.
Extracts from these plants go into making nutraceuticals, which is estimated to be close to a ₹35,000-crore market.
“This segment has been growing at around 20 per cent annually, but this year we have seen this category grow by about 35-40 per cent due to the pandemic-induced health consciousness among consumers. Given the kind of emphasis and focus the government is laying on health and ayurveda, this category is set to receive a further boost. We expect this segment to clock an annual growth rate of around 20 per cent for the next 10 years,” he said.
ITC, which has empowered over 40 lakh farmers through its e-Choupal ecosystem, is currently working with around 3,500 farmers under its MAPs project. It is looking to add around 7,500 farmers this year as it scales up to 10,000 acres.