Download The economic importance of Indigenous Plant in Namibia: a rapid

Ministry of Agriculture, Water and Rural Development
The economic importance of Indigenous
Plants in Namibia: a rapid assessment
Issues in Agricultural Marketing
Discussion Papers No20.
Division of Agricultural Planning
Directorate of Planning
Department of Agriculture and Rural Development
Windhoek
January 2005
The economic importance of Indigenous Plants in Namibia: a rapid assessment
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Discussion Paper No.20
January 2005
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To gather or to grow?
Towards a strategy for cultivation and wild harvesting of Namibian
indigenous plants, with special reference to Devil’s Claw.
The economic importance of Indigenous Plant in Namibia: a rapid
assessment
i
The economic importance of Indigenous Plants in Namibia: a rapid assessment
TABLE OF CONTENTS
Page Number
Issues in Agricultural Marketing Discussion Paper Series list
i
Table of contents
ii
Introduction
1
Background
1
Measuring the existing and potential economic worth of indigenous
plants
1
Summary of results
2
Discussion of method and interpretation
2
Detailed product by product assumptions
3
Table of results
6
ii
The economic importance of Indigenous Plants in Namibia: a rapid assessment
Introduction
The purpose of this short report is to demonstrate the existing and potential contribution
of the indigenous plants sector to the Namibian economy.
Background
Namibia has unique bio-diversity, particularly in the plant kingdom. Some of this
diversity is already utilized through traditional use of plants for an array of purposes
including food, but also for medicine, decoration, clothes, etc. In the past few years,
efforts to use some of this bio-diversity have led to a number of projects supporting the
commercial exploitation of indigenous plants.
Since 2000, activities in the field of indigenous plants have been coordinated by the
Namibian Indigenous Plants Task Team (IPTT)1, whose purpose is to ensure sustainable
utilization and to promote collaborative approaches in the sector. Both the Government
of Namibia and donors such as the European Union have contributed funds to activities
managed by the IPTT.
Through its first major project, the Promotion of Indigenous Fruit (PIF), the IPTT
developed a ‘pipe-line’ approach to the evolution of business opportunities from target
species. This approach selects a short-list of Namibian plants which might have market
potential and then focuses on investing in overcoming the bottlenecks which are
preventing commercialization. By its nature, the pipeline approach allows the IPTT the
flexibility to move forward along one pipeline when another becomes blocked.
To date, significant funds have been brought to bear on the indigenous plants sector.
Measuring the existing and potential economic worth of indigenous
plants
In formal agriculture or forestry, national accounts measure the contribution of each subsector to the Namibian economy and government ministry’s are obliged to keep records
of production which can be easily compared with actual prices. In the emerging market
for indigenous plants, production record either don’t exist or are in the ‘grey’ data field.
This paper attempts to systematically evaluate product by product the actual, current
volume of production, degree of employment and total value of each commodity of
present interest to the IPTT.
1
Prior to this date numerous programmes had been promoting the development of indigenous plants.
Particularly, the pioneering work of CRIAA-SADC is reconised.
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The economic importance of Indigenous Plants in Namibia: a rapid assessment
The same method is then applied to the potential of that product or its derivatives to
contribute value to the economy after the IPTT has successfully and sustainably assisted
with developing a formal market.
Summary of results
A table summarizing the results of this study is attached. The estimated aggregate
existing value of those indigenous products that are in the IPTT pipeline is N$100
million. It is important to note that for most of these commodities; only the current
formal sale value is captured. For Devil’s Claw and Marula, recent surveys have
demonstrated the wider value of these commodities as existing contributors to households
specifically and the rural economy in general. If the same level of residual value was
applied to other plants, the ‘before’ figure would be substantially increased.
A conservative estimate of the total value of these same products and their derivatives
once markets have been secured is N$407 million.
Highlights of these findings are:

Marula pulp is likely to be the largest single commercial opportunity for Namibia
in the indigenous plants commodity group.
Comment. Namibia has less Marula than other SADC countries. To keep a commercial
advantage, the technology and quality standards applied must outpace the competitors.

Growth in Devil’s Claw contribution to the Namibian economy will depend upon
capturing higher value markets
Comment. Urgent action is needed to arrest the global price decline in Devil’s Claw and
to reposition the products as ‘high value’.

Several of the minor product opportunities (Baobab, Manghetti, Terminalia root
bark, Ximenia) are projected to make relatively small returns, but could grow
rapidly if there is a break-through with a big commercial buyer.
Comment. Recovery of GRN investment costs is unlikely from these minor products, but
it can be seen from Marula that the potential for contribution to the overall tax base
through employment and consumption is substantial.
Discussion of method and interpretation
Due to the nature of these products (i.e., wild harvested, domestically consumed,
informally traded) it is much harder to quantify the volume and value of the current
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The economic importance of Indigenous Plants in Namibia: a rapid assessment
production than, say maize. In many cases, harvest is only for domestic consumption and
this is related to festivals or special needs. For some products, many different subproducts are made from one fruit (i.e., marula) and assessing the contribution of all the
minor by-products is not currently possible.
The process of calculating an economic value of Namibia’s indigenous plants will have
to be iterative. As more information is gathered on existing and new opportunities, it can
be expected that the ‘current position’ on the attached list will be amended. Since many
plants have uses, it is quite possible that the total current value is a gross underestimation. Also, as new market opportunities present themselves and mature, the
‘potential opportunity’ columns will have to be adjusted.
The calculation of future values was deliberately conservative so as not to raise
expectations. This prudent approach to valuation of potential makes sense in a highly
risky and uncertain environment such as Namibia.
Indigenous fruit play an important role in the social fabric on Namibia’s rural (and urban)
economy. The importance of indigenous plant availability for gift giving and social
interaction is intangible, but not insignificant.
Detailed product by product assumptions
This section briefly reviews the assumptions behind the figures presented. A subjective
view on the likelihood of achieving the projected potential opportunity is also offered.
Devil’s Claw
After a peak in exports of 1000mt in 2003, the demand for Devil’s Claw has declined
substantially. This has been caused by falling demand in Germany, the main market for
the product where the Government has removed the remedy from the state prescription
list.
The total number of households involved is an estimate based on the Situation Report
done in 2002. The price is the current non-organic market price.
In the future, it is assumed that product development will drive additional demand, but
that this demand will be met by fewer gathers, cultivators and centralized processors. It
is further assumed that the Devil’s Claw Working Group policy of supply management
will help drive the price of Devil’s Claw higher.
Expectation of achieving potential - medium
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The economic importance of Indigenous Plants in Namibia: a rapid assessment
Kalahari Truffle
Current production is highly variable (none in drought years). Achieving high volumes
and prices depends upon overcoming complex technical barriers to cultivation.
Expectation of achieving potential – medium to low
Wild silk
Production variable (as truffle). Price expectations based on similar hand made silk
products elsewhere and application of sound business management.
Expectation of achieving potential - medium
Marula
Practically all households in the North of Namibia collect and use marula. Limited
amounts of all the various marula products reach the market. A switch to harvesting and
collecting for extraction of pulp and the sale of marula kernel oil has the potential to
generate substantial income. Generic uses of marula flavour and oil could greatly
enhance this already valuable opportunity.
Expectation of achieving potential – medium to high
Baobab
Baobab fruit pulp has a niche market in the health food sector. This sector is prepared to
pay an organic premium. Baobab is widely available in large quantities elsewhere in the
region. Therefore, there is a risk that Namibia will be under-cut on price.
Baobab oil is interesting but others can produce it more cheaply than Namibia.
Expectation of achieving potential - medium
Ximenia
Namibia seems to be close to a break-though in creating a market for Ximenia as a
cosmetic oil. Unfortunately, this is a common plant, so to secure market, Namibia will
have to work hard. Therefore, no more that the current opportunity is described here.
Expectation of achieving potential - High
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The economic importance of Indigenous Plants in Namibia: a rapid assessment
Manghetti
At an advanced stage of developing a secure market i.e., waiting for its first serious order
from a cosmetic formulator. Until the market has been properly tested it is not possible
to set expectations beyond the current sample sales.
Terminalia root bark
Like Manghetti, the success of this product depends upon its inclusion in commercial
formulations. Unlike Manghetti, the possibility of this happening seems closer, hence a
higher value to the potential opportunity.
Expectation of achieving potential - medium
!Nara
Included in the list because it remains one of the IPTT pipeline products, though its
commercialization has been stifled by the discovery that it does not contain any
particularly economic important properties. Its inherent rarity is probably its most
valuable asset.
Hoodia
This was broken down into some of the sub-species because it is hoped that the market
opportunity arising from Gordonii will wash over onto the others. It is expected that
Hoodia Gordonii will become a commercial food supplement in the sliming industry and
that it will be intensively cultivated. This will turn it into a relatively low value
agricultural commodity rather than a high value exotic. Namibia must seek to capture the
maximum advantage from the commercialization of Hoodia, therefore value is also
attached to growing succulents for niche markets such as decoration. There is nothing to
base these calculations on, so the figures are educated guesses.
Expectation of achieving potential - high
Indigenous vegetables
The IPTT has only just started the work in this area. Little is known about the market
potential and processing costs involved in bringing indigenous vegetables into the formal
market. Latent demand for these products appears to be good and the technical barriers
to creating a good local market not insurmountable.
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The economic importance of Indigenous Plants in Namibia: a rapid assessment
Expectation of achieving potential – medium to high
6