Essential oils are high value, low-volume volatile liquid (oil) product which are mostly
extracted from plant parts through steam distillation method. Essential oil is one of the most
important commodities exported from Nepal. Nepal Trade Integration Strategy (NTIS),
20 I 0 has also identified Medicinal herbs and essential oil as one of the major 19 goods and
services having high socio-economic impact and medium export potential. Mentha (Mentha
arvensis) and Chamomile (Matricaria chamomilla) are one of the major essential oil bearing
plants which are widely adopted by farmers for production and marketing of essential oil
particularly in the terai region of Nepal. This study was conducted in Banke and Bardiya
districts ofNepal to explore key actors as well as their status, and practices of production,
processing and marketing of Mentha and Chamomile oil. A list of all the distillation units
(DUs) that were in operation for processing of Mentha and Chamomile crops in Banke and
Bardiya districts during the study period and in previous years were prepared through the
consultation of stakeholders and key informants. Primary information were collected
through the survey with all the identified distillation unit (DU) operators/farmers and
traders in June-July of2012. Similarly six focus group discussions (three in each district) as
well as key informants' interviews and a consultative workshop involving participation of
farmers, DU operators, traders, and other stakeholders was also organized for collecting and
validating the infonnation. The study revealed the involvement of more than 2500 farmers
in Mentha fanning in the study area who produced and sold around 40 Metric ton of
Mentha oil whereas only 76.6 kg of Chamomile oil was produced by a total of 116 farmers
in FY 2011112 in the study area. Majority of the farmers however had limited technical
knowledge and market assurance and information for these crops. Mentha farming was
widely spread in the study area due to increasing price as well as easily available processing
units and market for the oil. In contrast, Chamomile production could not get momentum
due to downward movement of price since last two years and also limited availability of
processing units and the market. Overall around 72.4 Million Nepalese Rupees were
generated through the sale of Mentha (70.8 Million Nepalese Rupees) and Chamomile oil
(1.6 Million Nepalese Rupees) in the study area during the FY 2011/12. Mentha and
Chamomile were though grown in the private land of the farmers displacing the cereal
crops such as maize and wheat, there was no any significant support on these crops from
the government's institutions. Mentha and chamomile crops have remarkable contribution
in income and employement generation as well as in human-wildlife conflict mitigation in
the study area. It is therefore necessary to formulate and implement the concrete policies
and programs on these crops in order to promote essential oil value chain as well as support
on livelihoods of the farmers in a sustainable way.

Essential oils are high value, low-volume volatile liquid (oil) product which are mostly
extracted from plant parts through steam distillation method. Essential oil is one of the most
important commodities exported from Nepal. Nepal Trade Integration Strategy (NTIS),
20 I 0 has also identified Medicinal herbs and essential oil as one of the major 19 goods and
services having high socio-economic impact and medium export potential. Mentha (Mentha
arvensis) and Chamomile (Matricaria chamomilla) are one of the major essential oil bearing
plants which are widely adopted by farmers for production and marketing of essential oil
particularly in the terai region of Nepal. This study was conducted in Banke and Bardiya
districts ofNepal to explore key actors as well as their status, and practices of production,
processing and marketing of Mentha and Chamomile oil. A list of all the distillation units
(DUs) that were in operation for processing of Mentha and Chamomile crops in Banke and
Bardiya districts during the study period and in previous years were prepared through the
consultation of stakeholders and key informants. Primary information were collected
through the survey with all the identified distillation unit (DU) operators/farmers and
traders in June-July of2012. Similarly six focus group discussions (three in each district) as
well as key informants' interviews and a consultative workshop involving participation of
farmers, DU operators, traders, and other stakeholders was also organized for collecting and
validating the infonnation. The study revealed the involvement of more than 2500 farmers
in Mentha fanning in the study area who produced and sold around 40 Metric ton of
Mentha oil whereas only 76.6 kg of Chamomile oil was produced by a total of 116 farmers
in FY 2011112 in the study area. Majority of the farmers however had limited technical
knowledge and market assurance and information for these crops. Mentha farming was
widely spread in the study area due to increasing price as well as easily available processing
units and market for the oil. In contrast, Chamomile production could not get momentum
due to downward movement of price since last two years and also limited availability of
processing units and the market. Overall around 72.4 Million Nepalese Rupees were
generated through the sale of Mentha (70.8 Million Nepalese Rupees) and Chamomile oil
(1.6 Million Nepalese Rupees) in the study area during the FY 2011/12. Mentha and
Chamomile were though grown in the private land of the farmers displacing the cereal
crops such as maize and wheat, there was no any significant support on these crops from
the government's institutions. Mentha and chamomile crops have remarkable contribution
in income and employement generation as well as in human-wildlife conflict mitigation in
the study area. It is therefore necessary to formulate and implement the concrete policies
and programs on these crops in order to promote essential oil value chain as well as support
on livelihoods of the farmers in a sustainable way.