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NEED FOR MBAs IN HERBAL SECTOR
While the potentials of the Indian Herbal Industry have been well appreciated and the Government and the private sector have been taking considerable efforts to forge ahead in the herbal sector, still the growth profile of the Indian Herbal Industry has not been to the level of its potential. This obviously implies that the style of the management in Indian Herbal Industry needs appropriate structural changes.
The management structure of the Indian Herbal Industry have to be necessarily different from other sectors in agriculture such as cereals and spices. The difference is that while spices and cereals are directly consumed, the herbs have to be subjected to extraction and formulation processes in industrial operations to extract the active ingredients before being sold for use.
Further, herbs are largely used for medicinal applications at specified quality level or in cosmetical sector or as food supplement, all of which require considerable testing and certification before being approved for use. On the other hand, the spices and cereals are consumed as straight food products, mostly without any particular tests being conducted. Moreover, whereas products like cereals and spices do not face competition from synthetic sources, the herbal products have to penetrate the market, substituting and displacing the well entrenched synthetic materials.
In such scenario, the present practice of simply copying of the pattern of management adopted in other agricultural sectors to the Herbal Sector, without recognising the distinctive nature and complexities of the herbal sector, have proved to be counter productive.
The Herbal Industry is clearly marked by different players involved in various activities such as agriculturists, chemical engineers in designing and operating extraction plants, formulators and medical practitioners, certifying agencies, testing laboratories, marketing functions in the Indian and the global spheres etc. While everyone of these agencies have different and exclusive functions, the fact is that everyone of the function has a bearing of other functions requiring overall understanding of the requirements of every section by every player in the industry.
But, at present such understanding and coordination between various functions in the herbal industry is conspicuous by its absence.
While, technically, agricultural operations is the first activity in the herbal sector, from the point of view of the business management, the market creation is the first step.
In the case of the herbal products, concerted efforts have to be put forth to create and develop the market for the products since it involves substitution of the herbal products at the place hitherto occupied by the synthetic materials. It can be seen clearly that market penetration is the vital element in the successful management of the herbal sector. Most of the discussions in public forums and conferences on the high demand scenario for the herbal products are only about the potential market and not the actual market, which is yet to be built in a big way.
With the driving force necessarily have to come from the marketing functions, the traditional practice of management of the agricultural industry cannot be applied to the herbal sector.
Today, it appears that every player in the Indian Herbal Industry is operating in isolation without being aware of the problems and scenario relating to the other players. This has led to inadequate management methods by individual players and inability to optimise the operating parameters.
The agriculturists involved in herbal industry today seldom understand the intricacies of processing the herbs or the certification issues or the type of marketing practices required in India and abroad.
This situation have left the agriculturists often confused and they think that they frequently face dead end after the successful cultivation of the herbs. As agriculturists represent the nerve centre of the herbal industry, they need management support to give them confidence and to forge ahead.
Today, we find a situation that there are not many agriculturists totally dedicated to herbal plantations. Many of them switch over from herbs to conventional crops and vice versa depending on the speculation about the market and profitability. Many have lost money in investing in the herbal plantations due to poor understanding of the dynamics of herbal industry.
Assessing the demand for the herbal products in the market has become an extremely difficult exercise and it requires the application of well thought out management strategies and methods, involving the several possibilities, including government policies, public perceptions, efficacy claims on scientific basis and building excellent organisational and comman structures.
The successful tackling of certification issues have a vital role to play in getting large scale consumer acceptance and the acceptance of professional medical practitioners and environmentalists. Such acceptance would alone secure an assured market segment for the herbal products in the existing highly competitive conditions.
Given this scenario and the fact that the coordination between the various functions in the herbal industry is very important, there is need to build up specially trained cadre of management professionals for taking over the leadership role in the herbal industry.
To meet such requirements, it is necessary to create MBA programmes that would exclusively meet the requirement of the herbal sector, with the herbal MBAs combining within themselves the knowledge about agricultural practices, technology issues, certification procedures, ecological aspects, marketing methodologies and the international regulations.
The Indian Herbal Industry today is at the cross roads. It urgently needs quality management inputs which can be provided by the specially trained herbal MBAs.
The herbal MBAs will have a total view of the scenario and can understand the complexities of the every sector in the herbal industry so as to form an integrated and forward looking policy and management strategies.
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News and Views 
March 2005
