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Field Visits by

National Biodiversity Authority, Chennai

Dr. Prakash Nelliyat, Project Associate, UNEP-GEF-MoEF ABS Project

Gujarat Biodiversity Board

Mr. Shailesh Dodiya, (Scientific/Technical Assistant, UNEP-GEF-MoEF ABS Project) Dr. Aeshita Mukherjee-Wilske (State Project Coordinator, UNEP-GEF-MoEF ABS Project)

For

“Economic Valuation of Bio-resources for ABS”

From 15-9-2014 to 18-9-2014 and during Oct-Dec 2014

At

Gandhinagar, Anand, Mehemadabad and Narmada. Gujarat

National Biodiversity Authority UNEP – GEF – MoEF ABS Project

Project on “Strengthening the implementation of the Biological Diversity Act and

Rules with focus on its Access and Benefit Sharing Provisions”

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Day 1 (15-9-2014)

Discussion Meet at Gujarat Biodiversity Board

A discussion meet was organized by Dr. A P Singh, IFS, Member Secretary, Gujarat

Biodiversity Board with Dr. Aeshita Mukherjee, Dr. Prakash Nelliyat and Mr. Shailesh Dodiya

at the Member Secretary‟s chamber.

Following are the issues highlighted in the discussion.

Progress on the economic valuation components of the UNEP-GEF-ABS project.

Methodology developed for economic valuation of bio-resources for ABS

Experiences of the economic valuation exercises carried out in other project states.

Criteria‟s for the identification of bio-resources for ABS

Need to select economic / commercial potential bio-resources and understand its

value addition

Normally traded and exotic resources and their exemption in the ABS process.

Cost elements in bio-resources collection and cultivation

Sustainability issues in bio-resources extraction

Community rights on forest resources

Livelihood enhancement of the tribal communities through NTFPs collection

Finally Member Secretary proposed to select at least one bio-resource (out of 3 - neem seed, rice

bran and dehydrated onion) from Gujarat and complete the valuation process. In this regard he

proposed to study the neem-seed (Azardiractha indica) and its use by the Mother Dairy Private

Ltd., Anand for manufacturing products such as Gronim (Botanical Insecticides) and Gronimix

(neem blended organic manure).

Subsequently, the team did a preliminary preparation towards understanding the neem seed

based bio-prospecting at the Mother Dairy Private Ltd, through reviewing the available materials

in the Board, collection of basic information through internet and a telephonic conversation with

the company management.

Based on the inferences from the above attempts a questionnaire has been drafted for conducting

an interview with the company management (see appendix 1).

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Day 2 (16-9-2014)

Prakash Nelliyat along with Dr. A P Singh, IFS, Member Secretary, Gujarat Biodiversity Board,

Dr. Aeshita Mukherjee, and Mr. Shailesh Dodiya participated in the celebration of the

“International Day for the Preservation of the Ozone Layer” at TRO Bhavan, Gandhinagar. This

programme was organized by the Gujarat Environmental Management Institute, where many

senior government officials and experts delivered their lectures. Presentations were focus on the

reasons and challenges of ozone depletion and the urgency of preservation of the ozone layer.

Visit to the Mother Dairy Fruit and Vegetable Private Limited’s NEEM BIOCIDE PLANT

Mr Shailesh Dodiya and Prakash Nelliyat visited the Mother Dairy Fruit and Vegetable Private

Limited‟s NEEM BIOCIDE PLANT at Anand and conducted an interview with Mr. Mahesh

Kumar Parik, the Unit Head. Even if the company is closed couple of months before and going

to shift in Delhi, Mr. Mahesh Kumar Parik allowed us for a meeting and provided some valuable

information. However, certain information (which is essential for economic valuation) was not

shared as the company is already closed.

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Following are the major inferences from the interview with Mr. Mahesh Kumar Parik and the

secondary information about the company, which the team collected from different sources.

Companyprofile: (information were collected from the company website as suggested by the Mr. Mahesh Kumar and modified)

The Mother Dairy Fruit & Vegetable Private Ltd. (MDFVPL) with its registered office at Delhi

is a company owned by the National Dairy Development

Board (NDDB), Anand, and is engaged in the activities of

production, procurement, processing and marketing of

fresh, frozen, processed and dry dairy and horticultural

products.

The Neem Biocide Plant (NBP), a Unit of Mother Dairy

Fruit & Vegetable Private Ltd., located at Anand, is

engaged in production and marketing of eco-friendly

neem based botanical insecticides.

Companies‟ final products include:

1. Azadirachtin 10% w/w min. extract concentrates

(i.e. technical material) - available in 5 Kg, 10 Kg

and 25 Kg HDPE drum packaging.

2. Azadirachtin 0.15% w/w min. (1500 ppm) EC

formulation - available in (a) retail pack size of

100 ml, 250 ml, 500 ml, 1000 ml and 5000 ml

HDPE bottles, and (b) bulk pack size of 200 liters

HDPE barrels (for registered formulators).

3. Azadirachtin 0.03% w/w min. (300 ppm) EC

formulation - available in (a) retail pack size of

100 ml, 250 ml, 500 ml, 1000 ml and 5000 ml

HDPE bottles, and (b) bulk pack size of 200 liters

HDPE barrels (for registered formulators).

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4. Azadirachtin 1.0% w/w min. (10000 ppm) EC formulation - available in (a) retail pack

sizes of 250 ml, 500 ml, 1000 ml and 5000 ml HDPE bottles, and (b) bulk pack size of

200 liters HDPE barrels (for registered formulators).

5. Neem blended organic manure available in retail pack sizes of 50 kg HDPE bags.

6. Trichoderma viride 2 x 106 CFU/gm available in retail pack sizes of 500 gm & 1 kg.

The above indicated Azadirachtin based insecticides (Brand: GRONIMTM) are registered with

the Central Insecticides Board and have been widely researched for their efficacy over several

crops and their pests at different agricultural universities situated in different agro-climatic zones

of the country. They have been found effective against a range of crop pests including sucking

pests.

Apart from this, Trichoderma viride and neem organic manure are already being used by

farmers, both extensively and effectively. These are marketed under the brand names,

GRODERMA and GRONIMIX, respectively. The companies Azadirachtin 10% technical

product is registered u/s 9(3), apart from being the first manufacturer in country to get a

permanent registration for this product.

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Basic Statistics about the company

Head Profile

Year of establishment 1995

Products Neem based bio-pesticide, azadirctic technical, neem based organic manures, pure neem oil

Main market Asia

Number of employees 16-25

No. of R&D staff 5

Quality control In house

Certification ISI and Organic certified company

Total annual sales volume 2.5 – 10 Million USD

Neem Seeds and its Collection

Neem trees are largely available in the public lands (such as road sides) as well as in

private lands. In some locations individual farm lands are fenced with neem trees.

Neem seeds available only in particular season (June end to July middle).

Major collection of neem seeds is occurred during the early July.

Collectors are village farmers, tribal communities, and school going children.

Generally, after the rain start; farmers engage in agriculture activities.

We don‟t have a direct contact with the community, who are collecting the neem seeds in

the villages and don‟t have any idea about the price offered by the traders and the

weighing practices.

Neem Seeds Market and procurement Practices

The company collected neem seeds from the

traders in DAHOD district and BHABHAR

(Banskalla district) mandies, which are

located 175 kms and 200 kms (respectively)

away from Anand.

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DAHOD is a biggest market for neem seeds in Gujarat. From there, resources are also

going to other part of the countries.

At the time of order, we assign certain terms

and conditions with respect to the quantity

supply and quality requirements.

Generally traders are directly supplying the

resources to the company gate. In this situation,

the wholesale price in the mandies and the

transportation cost (freight on road) is the

criteria‟s in fixing the price.

In certain occasions the company directly purchased the neem seeds from the whole sale

mandies and transported to the company.

However, both type of procurement has not much difference.

According to Mr. Mahesh Kumar Parik, the company procured around 750-1000 metric

tons of neem seeds annually.

The last procurement was done during 2012.

Storage Practices

In the case of neem seeds, purchasing wind is very short; only 15 to 20 days.

At that time we need to collect our required quantity for one year.

We use to dry and keep it in our premises.

Normally storing the neem seeds is a challenge. It generates too much heat and high

probability in get fire.

For avoid fire we need to follow certain storage procedures, as well as replacing the

stocks from one place to another. Further neem seeds to be stored in the manner in which

good ventilation to be provided.

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Price of Neem Seeds

The company last procured the bio-resources (neem seeds) during 2012. At that time

following are the price for neem seeds at the company gate:

Price of neem seed at the company gate (2012)

Type Price (Rs / Kg.)

Dry 6-7

Semi-dry 5-6

Wet 4 - 4.50

Generally we try to get maxim dry seeds, since we

don‟t have much facilities for drying.

Price determination for neem seeds:

According to Mr. Mahesh Kumar Parik, the price

determination of the neem seed is purely depends on

the market conditions, where supply and demand is

the key factor.

In the case of neem seeds, the supply factors are very significant, and is completely

depends on the monsoon.

The monsoon impacts are in two ways: when the monsoon starts; (a) majority of the

collectors stops neem seed collection and concentrates on agriculture practices, (b) since

the neem seeds / fruit collected under the tree, when it fall down, the rain will be affected

its quality (mix with mud and water). Further collection itself is difficult during the rainy

period.

Price of neem seed is highly fluctuating, since many factors are influencing its supply.

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In-house Production Practices

Major steps involved in the neem seeds processing are: refraction (removal of other part

of neem – leaf, braches etc. and removal of stone).

But, generally we use to check the quality of the seed prior to finalize the purchase order.

No need for removing the husk, before expelling.

Input-output Ratio and Product Price

If we expel 35 kg neem seed, we will get 1 liter of neem oil and 31 kg neem cake.

The ex-factory price of one liter of neem oil is Rs. 100.

The ex-factory price of one kg cake is Rs. 9 – 10.

Apart from the neem oil we need to add emulsion, at the rate of 2 – 5 % (in one liter oil)

for diluting the pesticides in the water.

Cost of Production and Total Sale

Regarding the cost distribution details about the different products and the profit analysis

the required information (as indicated in the questionnaire) were not provided by Mr.

Mahesh Kumar Parik. According to him, since the company is officially closed in Anand

and in the shifting stage to Delhi, it is not good to discuss those issues.

Suggestion

Mr. Mahesh Kumar Parik, suggested the team to contact Shri Ambica Oil Cake Industries

at Mehemdabad for the comprehensive understanding of oil extraction process and its

cost analysis.

Day 3 (17-9-2014)

Visit to Shri Ambica Oil Cake Industries at Mehemdabad

Mr Shailesh Dodiya and Prakash Nelliyat visited Shri Ambica Oil Cake Industries at

Mehemdabad and interviewed the company management (Mr. Jayeshbhai M Sheth and Mr.

Rajeshbhai M Sheth).

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Companyprofile (Information has collected from the company website as suggested by the entrepreneurs and modified)

Shri Ambica Oil Cake Industries was established in the year 1987, and is engaged in processing

unique range of Organic Oils. To maintain the quality of the oils, the company test the entire

range on different parameters in adherence with the industry standards and norms. These oils are

extracted from natural seeds and processed with the use of high quality ingredients & other

naturals herbs sourced from reliable market vendors and appreciated for their purity,

effectiveness, accurate composition and extended shelf life, these products are used in

agricultural, pharmaceutical, laboratories, textile and other allied industries.

With the aid of experienced and trained

professionals, the company has been

successful in manufacturing and supplying

an extensive range of Solvent Extraction, Oil

Mill and Refining Plants. Products are

manufactured with the utilizing optimum

grade raw material and sophisticated

technologies with the assistance of

production engineers. Products and production lines are meeting the needs of processing and

extracting oils from seeds, plants and other natural herbs. Furthermore, admired for its robust

construction, optimum performance and low

maintenance

Under the visionary guidance of management the

company has achieved a remarkable position in the

entire domestic market. The owners‟ management

capabilities and extensive domain expertise have

enabled the company to meet the different

requirements of the clients‟ on-time.

The primary advantage of the company is;

experienced R & D Department, Good Financial

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Position & TQM, Large Production Capacity and Provide Customized Solutions.

Basic Statistics

Products and Features

The company is engaged in processing a comprehensive range

of oil products. The oils are processed with the use of natural

herbs and finest quality seeds sourced from reputed market

vendors. In addition to this, the company has gained expertise

in manufacturing an innovative range of Solvent Extraction,

Oil Mill and Refining Plants. Furthermore, company

professionals make use of optimum grade raw material and

latest methodologies to manufacture the entire product line

and the entire product range is processed and manufactured in

confirmation with the guidelines of quality standards and

norms.

Head Profile

Year of establishment

1987

Products Organic Oils

Nature of the business

Manufacturer, Supplier & Trader

Ownership Partnership

Shipment By rode

Number of employees

51 to 100 People

No. of R&D and skilled staff

6 – 25 people

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Major Products

Category Products Features

Oil

Rice Bran Oil Neem Fruit Oil Karanja Oil

Purity Effectiveness Accurate composition Excellent healing and disinfecting properties

Machines and Plants Oil Mill Plant Solvent Extraction Plant Oil Refining Plant

Sturdy construction Longer functional life Optimum performance Low Maintenance

The company offer high quality neem oil. Use of neem urea coating insecticides purpose, powder

helps to retard the activity and growth of the

bacteria responsible for de- nitrification. Triteness

in nature neem urea coating agent will inhibit the

process of nitrification and reduce formation of

nitrate which in-turn will reduce N2O emission.

Infrastructure: The company located at the suburbs of

Ahmadabad with ample infrastructure base in different units such as processing, warehousing,

research, production, logistics, and administration. The entire unit is facilitated with amenities

and latest technologies that are suitable for manufacturing a flawless range of products. The

entire infrastructure is maintained with the assistance of trained and experienced professionals,

who specialize in carrying out each activity in a streamlined manner.

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The company installed various machines

include: Expellers, Oil filters, Extraction

machine, Boiler, Refining machine etc.

Storage facilities:

In order to meet the need of storing the

finished products and bulk orders, company

has set up a voluminous warehousing unit,

which spread large areas with all required safety precautions within the company premises. Unit

is segmented into different divisions so as to make the storage and retrieval tasks simple &

organized.

Unit is facilitated with temperature control system, which helps in keeping the entire range of oils free from all kinds of impurities. Furthermore, company makes use of optimum grade packaging material to keep range of oils safe from leakage during transit.

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Quality Control and Research and Development:

The company is maintaining high quality for their products and manufacturing steps. The

organization has recruited a team of experienced specialists, who make use of advanced

methodologies to test the quality of our entire product line.

Furthermore, to manufacture the entire range of machines and plants, our professionals utilize

advanced technologies & high raw material. These products are tested on the basis of durability,

performance and construction. Moreover, our oils are tested on the following predetermined

parameters such as: Medicinal and nutritional values, Freshness, Effectiveness, Side effects, and

Shelf life.

The organization is empowered with an advanced R & D unit, with eminent scientists which

facilitates to improve the drawbacks and shortcomings of our entire product line. Further

extensive marketing research also carried out for gather the most genuine and innovative ideas

pertaining to technology. Company‟s

research specialists helping the production

department towards manufacture new and

innovative line of products for the clients.

Following are the issues and points emerged

from the discussion with the company

management (Mr. Jayeshbhai M

Sheth and Mr. Rajeshbhai M Sheth).

Major products manufacture are Neem Refinery Oil, Rice Bran Oil , Neem Cake,

Rice Bran Cake

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Rice Bran Oil and By-product (Rice Bran Oil)

From 100 kg paddy processing, 7 kg rice bran will generate.

In rice bran, around 20% oil content may available.

Rice Bran Oil is very valuable and edible oil and widely using in cooking.

It is extremely useful for human health, since it reduces the cholesterol and protect from

heart diseases.

Shri Ambica Oil Cake Industries is supplying the

oil to many reputed oil manufacturing companies

in India.

Rice Bran is directly supplying by the rice mills to

the Ambica oil mill.

Rice Bran is a by-product of rice mills.

Normally Rice Bran available during the period of

October to March.

We use to manufacture the Rice Bran Oil during the

above period only.

We can‟t store the Rice Bran for a longer period, since

Rice Bran get decay within a short span of time.

There are around 300-400 rice mills in-and-around 50

kms radius of our company.

Rice Mill owners use to bring and supply the Bran in our

premise (----/kg).

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Our annual demand of Rice Bran is 7000 metric

tons.

Oil percentage in the Rice Bran is varying from

16-20 % based on the variety of the rice.

For example; the Bran from the rice variety of Guj.

17 have 20% oil concentration, while the bran

from the rice variety of IR- 8 has only 17%.

Following are the major steps in the oil extraction:

Major steps in Rice Bran Oil manufacturing

Steps Activities

Step 1 Screening (removals of waste particles from the rice bran)

Step 2 Steaming Step 3 Pellets (make solid) Step 4 Drying (through dryer) Step 5 Oil extraction

Waste (solid parts) derived during the processing is used for manufacturing the cattle

cake.

From the 100 kg. rice bran around 20 kg. oil and 80 kg. cake will emerge.

Extracted oil is supplying to many major oil refinery

companies such as Saffola Gold, Marry Gold etc., which

are located in Himachal Pradesh and Maharashtra.

Our annual (6 months) production of rice bran oil is 1200

to 1300 metric tons.

We are supplying the oil to the companies directly

through oil tankers.

The price we are supplying to the companies is Rs. 54/

kg., which include transportation cost also (which come

around Rs. 3/ kg.).

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We supply the cake to dairy companies; include Amul in Anand & Sagar Dairy locates in

Mehsana.

The rate of the rice cake, cattle feed, is Rs. 7-8 / kg, which include transportation cost

also (Rs. 0.50 / kg.)

The company managers refused to provide the product wise cost distribution details

for profit / BENEFIT estimation (indicated in the attached questionnaire).

According to them; “we are in this business during last 30 years and over a period we

learned many business tricks. Currently our machinery cost is “0” except some

negligible maintenance cost. We bought this land for Rs. 1 lakh, but now the land itself

worth around Rs. 6 crores”.

The major cost components (rice bran oil manufacturing) include: raw-material cost,

labour cost, electricity cost, administrative charges, and transportation cost.

Neem Oil and By-product (neem cake)

Neem oil is an eco-friendly substance widely using for manufacturing the eco-friendly

pesticides.

Neem seed is collecting from the traders

based in Panchmahal district & Dahod

district and other states like Rajastan and

Maharashtra.

50 – 60 regular traders are supplying the

seeds to us.

Traders are collecting the resources from

communities or local traders located in

different areas, and those details we are not

aware.

Generally poor school going children in

villages are involved in the collection of

neem seeds, and the income derived from the

collection is using for paying their school

fees and purchasing books.

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June to July is seed availability and collection period.

We are paying Rs. 7-8 / kg of neem seeds (with 30% moisture) in our company gate.

Neem seed price will vary based on the market conditions (demand and supply)

We required 6000 – 7000 Metric tons of

neem seeds annually.

Screening, drying, expelling (grinning)

are the major activities in neem oil

extraction.

Apart from the storage facilities in the

company premises in Mehamadabad, we

are having a godown in Kapadwanj in

Kheda district.

Storing the neem seeds for a long period is a problem and risky exercises.

There are possibilities of firing in the godown due to the heat as well as the oil and

moisture concentrations in the neem seeds.

For avoiding the fire in godowns we are following the staking methods of storing the

seed bags.

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In neem seeds expelling following are the ratio:

Ingredient Percentage

Oil 8 %

Cake 52%

Moisture / water 30%

Waste (Silica) 10%

Neem seed oil selling price is Rs. 80/ kg, which

include transportation cost in the tune of (Rs. 2).

The company is supplying the neem oil to the

government companies such as: KRIBHCO

(Krishak Bharati Cooperative Limited), GNFC

(Gujarat Narmada Valley Fertilizer and Chemicals

Limited), IFFCO (Indian Farmers Fertilizers

Cooperative Limited) etc.

Neem cake is supplying to -------------------.

The cost is -----/ kg, which include the transportation cost of Rs.---- / Kg.

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We are having 30 years experiences in the neem oil manufacturing.

Compared to earlier period, recently more competition in the neem oil sector is

experiencing.

We are manufacturing 600 – 700 metric tons of neem oil and 4000 Metric ton of neem

cake annually.

The neem blended urea is more ideal, since it release nitrogen to the plants gradually.

Otherwise 50% wastage will occurs.

The profit margin in the business is good.

We are paying 5% as VAT for our neem products, which is relatively in higher side than

the neem industries paying in other part of the country.

The company is very keen on the developments occurring in the neem extraction sector

and reviewing many journals in this area.

Review Meeting at GBB

A review meeting about the industrial visit was conducted by Dr. A P Singh, IFS, Member

Secretary, Gujarat Biodiversity Board at the Member Secretary‟s chamber in the evening. The

team explained about the field experiences, data collected, companies willingness in signing the

ABS agreement etc. with the help of photographs.

The Member Secretary suggested the team to make a proper documentation of the experience

and information collected during the company visits as well as carryout some attempt to

valuation with the available / existing data.

Day 4 (18-9-2014)

Report Drafting and Preparation of Presentation

During the morning hours report preparation work was progressed. Besides, a brief power point

presentation about “Bio-resources Valuation for ABS: Empirical Attempt in GBB” was also

drafted. This presentation was prepared based on the instruction from Member Secretary for

presenting to the Chairman, Gujarat GBB in the afternoon.

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Discussion Meet with Dr. J A Khan, Chairman, GBB and Presentation

Dr. A P Singh, Member Secretary, Gujarat Biodiversity Board organized a brief discussion meet

with Dr. J A Khan, Chairman, GBB at the Chairman‟s chamber for reviewing the economic

valuation of bio-resources exercises progressing in the State. All the GEF team and Research

Assistants in the Board also participated in the meeting.

The issue discussed in the meeting includes:

Significance of economic valuation of bio-resources in ABS.

Complexity and challenges in valuation.

Need of companies cooperation in the exercises.

But, general reluctance from industry side in providing certain business details or

correct information.

Need for more awareness generation about the Biological Diversity Act among the

business and industrial communities.

Subsequently Prakash Nelliyat made a power point presentation about “Bio-resources Valuation

for ABS: Empirical Attempt in GBB”, (see appendix 2), where he explained the following points

and concerns.

Draft methodologies developed by the NBA for economic valuation of bio-resources.

What should be the emphasis and objectives of valuation for ABS?

Significance of incorporating different rents (scarcity, endemic and information) in bio-

resources valuation

Brief description of the company visits and the attempts for valuation.

Data gap and further action.

With response to the draft methodology, particularly assigning the value based on collectors‟

time or day; Dr. J A Khan, Chairman, GBB stated that bio-resources collection is an irregular

activity and not a time bounded one. Generally community collects bio-resources in the morning

and or evening times. Hence collectors‟ time based or minimum livelihood approach is difficult

to consider in certain cases.

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Dr. A P Singh highlighted that, if certain bio-resources / NTFPs including neem seeds, failure in

collecting in stipulated season or a particular time is a big blow since the resource will spoil or

get composed within the soil. In this case its entire commercial value will get loss. Since most of

the bio-resources are perishable, storing for longer period is not possible for communities. Hence

the practicability in attain the maximum willingness to pay from the bio-resources users to the

provider is doubtable, and collectors are not in a position to get the better prices.

Both Dr. J A Khan and Dr. A P Singh, indicated the significance of incorporating the land value

as well as lands unique contribution in enriching the bio-resources in the valuation process.

Dr. Aeshita Mukherjee stated that the team will investigate / consider the entire value chain of

the bio-resources which we initiated and assess the value of the resources.

Major Inferences and Learning

The trip was well planned and organized nicely. Apart from the rigorous meetings and debates

on valuation issues, the team succeeded in visiting two important industries; Mother Dairy Fruit

and Vegetable Private Limited‟s NEEM BIOCIDE PLANT at Anand and Shri Ambica Oil Cake

Industries at Mehemdabad.

Mother Dairy Fruit and Vegetable Private Limited‟s NEEM BIOCIDE PLANT is manufacturing

Azadirachtin based insecticides (brand name: GRONIMTM) and Trichoderma viride and neem

organic manure (brand names, GRODERMA and GRONIMIX respectively). In brief, in this

company the complete value addition from the input (neem seed) to output (final product with

branded insecticides and manure) is taking place.

Shri Ambica Oil Cake Industries is primarily a solvent extraction (refinery) unit, where oil

extraction is taking place from two resources such as rice bran and neem seeds. In the Rice Bran

Unit, Rice Bran Oil and by-product (rice bran cake) are the major output (product). In the neem

seed unit, Neem Oil and by-product (neem cake) are the output (product).

In this company outputs are manufacturing as intermediate products and supplying to different

reputed companies, who manufacture the final products. For example; the rice bran oil is

supplying to major oil refinery companies such as Saffola Gold and Marry Gold located in

Himachal Pradesh and Maharashtra. The neem oil is supplying to reputed insecticide

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manufacturing organizations such as: KRIBHCO (Krishak Bharati Cooperative Limited), GNFC

(Gujarat Narmada Valley Fertilizer and Chemicals Limited), and IFFCO (Indian Farmers

Fertilizers Cooperative Limited). Rice bran cake is supplying to dairy companies; include Amul

in Anand and Sagar dairy in Mehsana.

In brief, in Shri Ambica Oil Cake Industries, the value addition is occurring from raw-material

(seed / bran) to intermediate products like oil, which are used by other companies for

manufacturing their final produce.

Both these industries cooperated with us and provided very valuable information which is extremely useful for us for designing our further steps towards assessing the value chain. The information include: companies broader profile and statistics, raw-materials, procurement practices and price, trader (supplier) and the locations, bio-resources collectors in the villages, price determination of bio-resources, major process and production steps in the unit, major products manufacturing and their supply price, in-house management and maintenance, and sustainability issues of bio-resources. However, companies reluctant to share the cost of production and profit details, since they feel this information are confidential in business.

Currently we are analyzing the information provided by the companies. This exercise will provide some comprehensive idea about the available information and the major data gaps. Additional information required for valuation from industry side will be identified and again request or clarify to the industry for continue the valuation exercises. Following tables provides the statistical base for economic valuation of bio-resources and a rough estimate with available data.

Mother Dairy Fruit and Vegetable Private Limited’s NEEM BIOCIDE PLANT (2012)

Bio-Resources: Neem seeds

Products: Neem oil based organic pesticide and Neem cake based organic manure.

Raw-material Neem seed (Demand &cost)

Total Production Input-Output Ratio (35kg. neem seed)

Products Ex-factory rate

Total Turnover

Demand (annual)

Price /Kg.

Pesticide Manure Pesticide Manure Pesticide Manure Pesticide Manure

750-1000 Metric Tone

Rs. 6-7 21,429 to 28,571 liters

664.3 to 885.7 MT

I liters 31 kg Rs. 100/lit

Rs. 9-10 / kg.

Rs.21.4 to 28.6 lakhs

Rs.63.1 to 84.1 lakhs

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Shri Ambica Oil Cake Industries (2013)

Bio-Resources: Rice Bran

Products: Rice Bran oil and Rice Bran Cake.

Raw-material Rice Bran (Demand &cost)

Total

Production

Input-Output Ratio (100kg. Rice Bran)

Products selling rate (oil rate + transportation cost)

Total Turnover

Demand (annual)

Price /Kg.

Rice Bran oil

Rice Bran Cake

Rice Bran oil

Rice Bran Cake

Rice Bran oil

Rice Bran Cake

Rice Bran oil

Rice Bran Cake

7000 Metric Tone

Rs. --- 1200-1300 MT

5600 MT

20 lit. 80 kg Rs. 54/L (51+3)

Rs. 6-7/ kg (5.50+0.506.50+0.50)

Rs. 604.80 Lakhs

Rs. 291.20 Lakhs

Shri Ambica Oil Cake Industries (2013)

Bio-Resources: Neem seeds

Products: Neem oil and Neem Cake.

Raw-material Neem seed (Demand &cost)

Total

Production

Input-Output Ratio (100 kg. neem seed)

Products selling rate (oil rate + transportation cost)

Total Turnover

Demand (annual)

Price /Kg.

Neem oil

Neem Cake

Neem oil

Neem Cake

Neem oil

Neem Cake

Neem oil

Neem Cake

6000-7000 Metric Tons

Rs. 7-

8

600-700 mt

4000

mt

10 L 57 Kg Rs. 80/kg (78+2)

Rs. --- Rs. 480 to 560 Lakhs

Rs. ---

Future Plan

At the first stage, the team emphasized on the bio-resources based (neen seed and rice bran)

companies and the bio-prospecting. However for completing the value chain analysis we

required information from other stakeholders: particulars the traders and communities who

collect the bio-resources.

25

In the case of neem seeds, companies are primarily procuring the resources from the Dahod

market (one of the leading neen seed wholesale market in Gujarat) through the traders; the team

will be planning a meeting with the wholesalers and traders in Dahod soon.

Traders and wholesalers in Dahod may provide some details of small / village traders and

communities who engage in the neem seeds collection and supply to them and the locations.

Accordingly the team will be going to visit the collection spot and interact with the communities.

Rice bran suppliers are rice mill owners located around 50 kms away from Mehemdabad. Since

the rice and bran quality is influencing in the level of oil concentration, an interactive meeting

with the rice mill owners (who supply the bran to the company) and the farmers (who cultivate

the rice) / villagers (who depend the rice mills for processing) is important and is planning.

The value chain of the Dehydrated Onion also will be studied in the near future.

Dr. Aeshita Mukherjee suggested the economist, NBA to make a visit to Gujarat in near future.

As per the recommendation follow up was done which is as below:

1. At the first stage, the team emphasized on the bio-resources based Neem seed

companies and the bio-prospecting. However for completing the value chain analysis we

required information from other stakeholders: particulars the traders and communities who

collect the bio-resources. In the case of neem seeds, companies are primarily procuring the

resources from the Dahod market (one of the leading neem seed wholesale market in

Gujarat).Through the traders; the team planned a meeting with the wholesalers and traders in

Dahod. Traders and wholesalers in Dahod provide some details of small/ village traders and

communities who are engaged in the neem seeds collection and supply to team and at various

pre-selected locations. Accordingly the team went and visited the collections spot and interacted

with the communities.

Keeping the above strategies in mind Shailesh R Dodia, SA, UNEP-GEF reached

Godhara and at first met Shri. R M Parmar, ACF, Godhra division. He suggested that one

biggest neem seed suppliers is Limkheda, and Agro market in Dahod. Further reached

Devegadhbaria and meet Mr. A R Rathva, Divisional Manager, Gujarat Gaun Vikas Pedash

Nigam, D.baria. While interaction with him, he informed that since 2011-12 they started

26

collecting 72 quintal neem seed and recently 535.75 quintal seeds are purchased from tribal

people with a valuation average @ 1 quintal = 600 Rs. (Commission, Transportation not

included).

Latter having interaction with Shri. Radeshyam Jagdishchandra shah, R J Seeds &

Nursery, Seed suppliers, Limkheda explained that they collect the neem seed from different

talukas viz. Limkheda ( 148 village include), Dhanpur, Devagadh baria, Haraf modva and also

purchased from Gujarat Gaun Vikas Pedash Nigam, D. baria. Aproximately 535.75 quintal neem

seed purchased are sold to lucknow, UP Forest Dept. and prinicipally for making of fertilizer

called “ Limbodi no Khol “. In addition the RJ Seeds, Limkheda also purchases other seeds of

forest plants like Baheda (Terminalia bellirica ) , Ber ( Zizyphus sp.), Sitaphal (Annona

squamosa), Kuvech, Khair (Acacia catechu) Seven ( Gmelia arborea), Garmalo (Moringa

oleifera) , Siras (Albizia lebbeck) Parpaliya (

Holoptelea integrifolia) Sag (Tectona grandis),

Harde ( Terminalia chebula) for additional

commercial earnings.

In continuation, visit was made at the

APMC of Dahod for neem seed. Neem seed

seller at the APMC, Dahod are 1. Shri

Jaynatibhai 2. Shri. Ravi Natiya, but the day of

visit these two person were not present. Hence

the interaction remained un noted Local traders of Limkheda (R J Seeds , Limkheda)

Seed of Moringa oleifera Seeds of Terminalia Chebula

27

Seeds of Tectona grandis Seeds of Zizipus

Following the months ( Oct-Dec 2014) later on repeated visits for works like PBR verification,

or TK documentation or drawing of action plan, the aim was also to record various information

on BR use and commercial utilization thereof earning an economic valuation

2. The Shoolapaneshwar forests in south Gujarat are remnants of

some of the finest forests in the Gujarat. The Dediapada forests

are part of the Shoolpaneshwar forests. They are home to a

variety of natural resources and a diversity of flora and fauna.

The Vasava tribals who inhabit the Shoolpaneshwar forests form

a prominent part of the diverse ethnic groups. They form a

homogenous group with their own leadership, law and custom. They form a community of

farmers who support their life by forest hunting, gathering of herbal plants, and raising cattle.

They possess immense knowledge about the medicinal plants growing in that area but due to

lack of awareness amongst the group there is no documentation of this knowledge by the tribals.

It is orally passed by the elders to the next generation. With the changing time this knowledge is

getting extinct.

Fr. Lancy D‟Cruz, while pursing the research in Ethno botany came in contact with the Vasavas

adivasis. Despite living in areas rich in biodiversity, these tribals were living below the poverty

line. Deeply impressed by the fact that these tribals have both – the plants, and the knowledge

about the plants, he thought of innovative ideas to help the tribals generate income from these

resources. This was done through a project that the Xavier Research Foundation carried out

28

along with the Adivasi Samajik Kendra, Dediapada titled “People –forest-laboratory linkages for

conservation of ethno botanical biodiversity”

On completion of this project Fr Lancy D‟Cruz joined hands with Jeevan Tirth and Manthan

Educational Programme Society India and the team. They together designed a project which was

forwarded to an NGO, ALBOAN. The aim was to promote the socio-economic development of

the Vasavas and to protect their traditional knowledge of medicinal plants. Several ideas were

exchanged among the partner NGOs who are experts in the field of education, research, training,

etc in order to support the Vasavas.

Our group has managed to participate in several exhibitions and fairs outside Dediapada.

The Aadiaushadhi gropu has participated in the traditional Food Festival event “Bhuli Bhulai

Vanngi” held at the prestigious Indian Institute of Management (IIM) in Ahmadabad; at this

event the group earned some income and were also awarded with a special prize for its Brahmi

products.

The group has also represented the District Rural Development Agency (D.R.D.A) at fairs in

Jamnagar and in Ahmadabad. It has helped the group to get publicity and many people from

different parts of Gujarat have tried to contact them.

Today, thanks to the team effort, they are able to prepare a variety of products. These products

help in curing many common diseases. To name a few, medicines for acidity, arthritis, diabetes,

kidney stone, general sickness, jaundice, cough and cold, loose motions, etc.

The group has also experimented with various products of Amla, hair oil, massage oil, tea

powder and Chavanprash. All these products have been marketed in Ahmedabad. Usages of local

plants like „Khati bhindi‟ for jam, sharbat and drink concentrate have also been successfully

tried.

The groups have started a small Nursery for multiplying medicinal plants. Initially they used to

grow few medicinal plants. Increasing interest in growing medicinal plants has encouraged the

group to increase the production of these plants. This has helped in increasing the sale of the

medicinal plants.

29

For the future progress of the group, they have decided to train ten selected members as master

trainers for training new members. The group has been very progressive and addaptive to new

thoughts and have created awareness about themselves by making a documentary on the group

activities and process. This webpage is an effort to increase the scope of the group‟s business and

expand the reach of its products nationally and globally.

Below is the showcasing of their effort and earnings:

Herbal Medicinal Products

For Kidney Stone For Joint Pain

For Digestion For Diabetes

For Menstrual Problems For Acidity

30

Herbal Food Products

Brahmi Kahkhra Brah Khari Multigrain Biscuit

Nagli Soya Biscuit Soybean Biscuit Tea Masala

Herbal Oils Massage Oil Hair Oil

Who are these people involved:

31

Learning Process:

32

33

Marketing:

34

Adi Ausadhi and ABS: As the group is using their knowledge to commercialize various

Cultivable and Bio-resources available from the surrounding forest, the team leader and the

group members (81) agreed to sign the ABS agreement. During our several field visit, we have

repeatedly talked about the BD Act and its provisions. The group also agreed to get involved in

their activities through respective BMCs and to be associated with herbal industries for their

future expansion. Al though the group is working on a very low scale production and marketing

thus the profit at present is non-significant. On April 28th 2015, the team leader Dr. Lancy De

Cruz representing the group and the Member secretory, GBB Mr. B K Sinha, IFS signed the first

ABS agreement in Gujarat. AS per the information collected the group on an average makes a

sale of Rs. 25,000 per year.

3.Dehydrated Onion:

Agricultural Product Marketing Committee, Mahuva was established in 1858 by a local lawyer

named Shree Jugaldas Mehta. The APMC was established for the purpose of regulating the

marketing of different kinds of Agricultural Produce. APMC was primarily set up to cater to the

marketing needs of the farmers and provide them a platform for selling agricultural produce in

various markets and at competitive prices. It is spread across 90 bighas of land. Mahuva and its

surrounding villages are best known for its onion production in India.

35

Onion Onion and Onion (Source : APMC,Mahuva)

Onion producers and consumers : cost of onion and realities:

The total annual production or onion in the country is about 150-175 lakh tons. In the last decade

Gujarat holds the second place in onion production which accounted about 25% of the whole

onion production which has tremendously gone down to 10%. Interestingly however, Gujarat

stands first in production per ha which is about 25 tons/ha. In Gujart the belt of Bahvnagar,

Mahuva and Talaza are world famous for onio production. The most of the produced onion goes

for export to the Gulf, States and to Europe both as raw and dehydrated mainly.

The self life of onin is on a average 12-20 days as a result the growers/farmers immediately sells

the onion soon harvested from the field at whatever price offered. If the initial price of onin is

considerd then it comes to an average of Rs 120/ 20 Kg i.e Rs6/Kg and thus the framer actually

earns a benefit of Rs 50/20 Kg in an ideal situation which is hardly happening. So the alternative

adopted is dehydration of onion either as chips or as powder.

During the month of May generally the price of bulk onion sell goes significantly low due to

approach of monsoon. The onion are stored and on an average 75,000 ton of dehydrated onion is

made in two major forms as powder or as chips. The most rather all of it is then exported. The

36

average calculated price comes to about Rs 160/kg of chips (please note that 10 kg raw onion

give 1 kg dry onion) In India, there are 90 active onion dehydration units. Of these, 75 units are

located in Gujarat mostly in Bhavnagar, Mahuva, Vadodara and Gondal (Rajkot). The country

has about 30 export oriented units of onion dehydrated products while the rest are suppliers.

Source: Mr. Gahnshyam Patel, Chairman, APMC Mahuva. The onion is cultivated in both

kharif and rabi seasons. In comparison with the average sowing area of onion for the last three

years, the sowing was up 136 per cent. The three year average for onion sowing is 53,600

hectares, against which sowing this rabi season has been in 72,600 hectares. There are about 81

such dehydration units across Guajart, and the UNEP-GEF team has visited more than 30 such

units and interacted with the owner or representatives of these units.

Glimpses of onion and related…..

37

The various forms of dry onions are as below:

Chopped Sliced White

Granules ( White & Red)

Minced Onion Roasted Powder Toasted Onion

38

Kibbled ( White & Red)

39

Appendix 1

Questionnaire

Neem-seed (Azardiractha indica) based products: Manufacturing and cost analysis

1. Brief profile about the company

2. How you are mobilizing the raw-materials (neem seeds)?

3. rom where (places in Gujarat and other part of country) you are mobilizing the resources

(neem seeds)?

4. If through traders, provide the details (last year, (2013)

S. No Trader / Supplier (with location) Quantity (kg)

1 2 3

5. What is the current price you are giving to the neem seed at the collection point

(company gate)?

6. Did the price of the neem seed increased over a period of time?

7. If so, how much?

Years Rs. / Kg 1980 1985 1990 1995 2000 2005 2010 Present

40

8. If neem seed’s price increasing over a period, what are the reasons?

9. Did any quality variations occurred to the neem seed?

10. If so, what are those elements?

11. How you handle the different varieties of neem seeds (wet, dry, semi dry)?

12. What are the general processes you are doing on the neem seed at the first stage (such as

drying, husk removal, etc)

13. Appropriate value addition through this process.

14. What are the products derived from neem seed?

S.

No

Products Purpose

Intermediate Final

1

2

3

3

15. Major Process

Steps Product 1 Gronim (Botanical Insecticides)

Product 2 Gronimix (neem blended organic manure)

Steps 1

Steps 2

Steps 3

Steps 4

Steps 5

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16. Cost of production of neem seed based final products Gronim (Botanical Insecticides) (……ml)

Cost components Quantity* required

Unit price* Cost (Rs)

Variable costs Raw materials (neem seed) Other raw-materials/chemicals Labour Electricity / fuel Packing materials Administrative cost Insurance / fee / tax etc. Fixed costs Building Machinery R&D (unit cost) Profit Total Cost

* : If relevant Gronimix (neem blended organic manure), ( ------ gr/kg)

Cost components Quantity* required

Unit price* Cost (Rs)

Variable costs Raw materials (neem seed) Other raw-materials/chemicals Labour Electricity / fuel Packing materials Administrative cost Insurance / fee / tax etc. Fixed costs Building Machinery R&D (unit cost) Profit Total Cost

* : If relevant

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17. What about the products (which you derive from neem seed), marketing conditions?

(Demand / supply / marketing / price etc.)

18. Current market price (ex-factory) rate of your product

Products MRP

Gronim (Botanical Insecticides)

Gronimix (neem blended organic manure)

19. Products are supplying (only domestic, inly international, domestic and international)

20. Are your products facing competition in the market?

21. If so, please explain the intensity of the competition.

22. What you think about the availability of neem seed in the future?

23. Are you doing any initiative with communities (cultivators and collectors) towards the

sustainable availability of neem seeds?

24. If so, please explain.

-----------------------------

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Appendix 2

44

45

46

47

48

49