The Economic Potential of Medicinal Plant Production with Particular Reference to Quebec

Plants are the source of a large proportion of medicines. It has recently been estimated that there are about 400,000 species of higher or vascular plants (Govaerts 2001, Thorne 2002). While not all of these are equally useful, studies suggest that somewhere between a quarter and a third of all species have been used for medicinal purposes by indigenous societies.

Deans and Svoboda (1990) suggested that there are over 20,000 medicinal plants; Torkelson (1995) lists over 4,000 scientific names and more than 28,000 common names of medicinal plants; and Duke (2002) provides detailed information on over 800 of the most important medicinal plant species. Despite these large numbers, relatively few species are cultivated commercially on a large scale, as is the case, for example, with ginseng, echinacea, and ginkgo.

For medicinal plants, becoming commercially significant is not easy. The odds are about a thousand to one. A species needs to be very special in order to join the relatively elite club of important commercial plants. Fortunately, with common sense and enough background information, the odds of profitably growing medicinal plants that have not previously been raised in a given region are considerably higher than a thousand to one.

While this discussion focuses on the economic wisdom of expanding production of a specific class of crop (medicinal crops) in a specific province of Canada, it is very important to remember that this is an example of a general problem. The phrases "alternative crops," "replacement crops," "substitute crops" and "new crops" all relate to attempts to improve the profitability of farming by growing crops that have not been grown, at least recently, in a give locality. Most such crops are "minor," "specialty," "niche,""non-traditional," or "under exploited," at least initially in the region in question.

There have been many analyses of the exercise of new crop introduction (see Small 1999). It is disappointing to learn that no one has yet found a reliable means of choosing new crops that will be successful. Nevertheless, by examining some aspects of new crop introduction, it is at least possible to make more informed choices and to avoid some problems.

Except in cases of monopoly, new offerings in the marketplace strongly tend to follow a characteristic life cycle of profitability, and it is extremely important that those investing in any new crop understand this.

More at: 

http://www.agr.gc.ca/eng/science-and-innovation/science-publications-and-resources/resources/canadian-medicinal-crops/the-business-of-medicinal-plants/the-economic-potential-of-medicinal-plant-production-with-particular-reference-to-quebec/?id=1302131510016