1. Development of Supply Chain of
Lemon Grass in the Patna
District of Bihar India
By
K.M. Singh, Director, SAMETI, Bihar, India
Burton E. Swanson, Prof. Emeritus, UIUC, USA
Expert Consultations on Herbal, Medicinal & Aromatic Plants,
ICARDA, Aleppo, Syria, 10-12 July 2007

2. Background
ATMA, Patna pursued a strategy that would help farmers
diversify into higher value commodities and products. Three
criteria were used to evaluate alternative crops and products
within the district:
 There had to be a continuing market demand for the crop or
product.
 The crop must be well suited to the existing agro-climatic
conditions, and
 The production technology to be used must be relatively low-
cost to reduce the farmer’s risk and provide enhanced
returns.
 In other words, each ATMA is expected to pursue:
 Market-driven,
 Farmer centered, and
 Environmentally friendly approach to agril. diversification.

3. Lemon grass: The ideal crop
The following case study outlines the steps followed by the
ATMA, Patna to assess and develop a financially sustainable
supply chain for the production and post harvesting handling of
Lemon Grass by groups of farmers in the district.
Lemongrass cultivation due to its many advantages has come as boon for
the farmers, some of them are as follows:
 They can be grown even on less fertile and marginal lands.
 They resist drought and can grow successfully where no other crop
generally grows provided, some care is taken by the farmers in terms
of providing life saving irrigation.
 There is little damage to the crop from animals and insect-pest, as they
normally keep away from it due to its bitter taste.
 Attractive economic returns with little risk on the part of the growers.
 Selling the Lemon grass oil is not a problem because of its ever
increasing demand and a large number of buyers.

4. Building the Supply Chain for Lemon grass
The main constituent of lemongrass oil is 70-
88% of citral,
Minor constituents are: linalool, geraniol,
citronellol, nerol, 1.8 cineol, linayl acetate etc.
The perfume industry has found that Lemon
grass oil can give almost the same effect in
blends as more expensive scents.
Pharmaceutical industry also uses the lemon
grass oil extensively
Therefore, cultivation of HMAPs quickly
emerged an important crop for small-scale
farmers

5. Step 1: Conduct PRA and develop SREP
Participatory Rural Appraisal (PRA) used
to assess local condition and to identify
marketable crops that could be
successfully introduced
Entrepreneurial farmers already
producing different Herbal, Medicinal &
Aromatic Plants (HMAPs) were identified
Researchers were consulted to
determine which HMAPs could be
successfully grown in Patna district
Findings included in Strategic Research
and Extension Plan (SREP) and submitted
to ATMA Governing Board for approval

6. Step 2A: Investigate potential markets
Investigating potential markets was difficult
since traders engage in secretive and
opportunistic buying practices
The Internet, published sources, the media
and personal contacts were all used to
identify firms that manufacture traditional
medicines
Different companies were contacted to
determine their interest in contracting with
farmers to produce to specification.
Many firms were not interested, Potential
demand for different HMAPs was assessed
from interested firms

7. Step 2B: Organize Farmers into FIGs
Farmers with similar social/economic
backgrounds and shared goals were organized
into farmer interest groups (FIGs)
Typical village-level FIGs have 10-15 members
FIGs that share a common interest, such
HMAPs (Lemon grass), may organize into a
block-level Farmer Association (FA) and these
FAs may organize at district level into Farm
Federations (FFs).
The goal was to create a producer network
whereby a substantial quantity of Lemon grass
oil could be produced on a sustained basis to
secure:
Economies of scale
Increased market power
Good financial returns for members

8. Step 2C: Develop/Test Production Technologies
.
Company contracting for Lemon grass wanted the crop
produced organically
KVK was asked to develop and validate the technology
Then the KVK was to train the FIG members so they
could meet the company’s quality and organic production
specifications

9. Step 3A: Facilitate Contract Negotiations
A contract was negotiated between the
company and a group of FIGs to supply
lemon grass oil.
ATMA, Patna served as the facilitator
between the FIGs and the Buyer.
Contract specified that the produce should
be free from any adulteration, with min. 70%
citral content
Company agreed to buy 2MT/year during
next five years with a provision of a 20%
increase each year.
Securing credible markets was considered
essential to the success of this activity

10. Step 3B: Arrange exposure visits for FIGs
.
FIG leaders were taken to other states
(Maharashtra, Uttar Pradesh and Madhya
Pradesh) to learn how other farmers have
successfully grown HMAPs
FIG members were taken to other districts to
visit other farmers who were successfully
producing herbal, medicinal & aromatic crops
FIG leaders were also taken to research
institutions, like CIMAP in Lucknow and the
FFDC in Kannauj to learn about:
Specific high-value aromatic crops
The production and post-harvest
handling techniques needed to
successfully produce these crops.

11. Training programs were organized by by ATMA in
association with national institutes like CIMAP in
Lucknow, CEDMAP in Bhopal and FFDC in Kannauj
The local KVK and experts from the SAU also helped
train the FIG members
Company experts were also actively involved in
training the FIG members
Step 3C: Training FIG Members

12. Step 4: Arranging for Quality Planting Material
Planting material (Slips) for lemon grass was made
available to farmers by the ATMA on actual cost-
sharing basis
Since not available locally, they were procured
from CIMAP, Lucknow and FFDC, Kannauj
The actual cost of Rs.2/- per slip was charged from
the farmers

13. Step 5: Technical Backstopping of FIGs
Company technical staff and researchers from the KVK,
SAU and ATMA visited the farmers regularly to monitor
the crop
Care was taken to ensure that the crop remains organic
and free from any pesticide contamination
Any problems encountered were resolved in the field
itself

14. Step 6: Harvesting, & Oil Extraction
.
All pre- and post-harvest handling is supervised by the
company and ATMA
The crop must be harvested properly, shade dried and then
cut into pieces before loading in the Field Distillation unit for
oil extraction, as per the requirement of the company
Also, the Oil must be properly packed in food grade plastic
or stainless steel containers before transporting to the
delivery site

15. Step 7: Oil Tested and Delivered
FIG members transport the lemon grass oil in food grade
plastic or stainless steel containers to the company’s
delivery station
The company has its own testing facilities located here.
Samples are tested for moisture content, pesticide residues
and citral content, (min 70% desired)
Payment to farmers is made after testing the oil for citral
content and weighing the oil

16. Identify firms that buys
and uses Lemon grass oil
BTTs organize FIGs;
assess interest in HMAPs
Steps in Developing a Supply Chain
ATMA Organizes PRA and develops a SREP
Arrange for planting material (slips) and other inputs
needed to produce the Lemon grass oil
FIG members produce lemon grass oil to specification;
BTT and buyer’s staff supervise
Consult with research
institutions; KVK to
field test technologies
FIG leaders oriented to
Aromatic crops through
exposure visits
ATMA arranges with
KVK to train FIG
members
Transport Lemon grass oil to delivery site, test
product, weigh product and pay farmers
ATMA facilitates contract
agreement between FIGs
and buyer

17. Details of Aromatic crops being grown in Bihar through leads
provided by ATMA, Patna (Year 2005-06)
Aromatic
Crops
Area
(ha.)
Oil yield
(kg./Ha.
Total oil
producti
on (kg.)
Rate at
which
oil sold
Rs./kg
Gross
income
Rs./ha
Net income
per ha.
Rs./ yr
Lemon
grass
102 140 14280 300 42000 19500
Java
citronella
30 125 3750 270 33750 14250
Mentha 110 120 13200 300 36000 15500
Palma
Rosa
20 100 2000 405 40500 18000
Tulsi (basil) 24 100 2400 200 20000 8500
Jama
rosa/CN-5
13 155 2275 325 50375 25375
Total 299 37905
Source- Singh, 2006, World Bank Study on ATMA Model in Bihar

18. THANKS