Demand analysis of medicinal plants in Himachal Pradesh

The medicinal plant market in Himachal Pradesh is oligopsonic in nature where a large number of small buyers controlling buying side make medicinal plant market a buyer's market. Therefore normal demand-price relationship could not be established in case of medicinal plants. The rarity and derived demand of these plants are the other reasons for abnormal demand-price relation. The demand analysis of medicinal plants by major industries has been presented under this background. Ten major medicinal plants have been identified based on their annual consumption recommended by National Medicinal Plants Boardn (NMPB). The analysis has shown low own price elasticity and high growth rates of Kuth, Banafsha, Kutki and Bankakdi which assure steady market for them. It has been suggested that the plants like Kutki, Kuth and Bankakdi should be given priority in commercial cultivation in view of their scarcity values. A market driven management policy is warranted for the popularization of medicinal plants in the state.