Iranian Agricultural Economics Society (IAES)

Document Type : Research Article

Authors

1 Department of Economics - Hakim Sabzevari University

2 Assistant Professor, Department of Industrial Engineering, Faculty of New Technologies, Hakim Sabzevari University, Sabzevar, Iran

10.22067/jead.2025.95365.1376

Abstract

The diverse applications of these plants and the emergence of a healthy lifestyle trend have led to an increase in their demand in recent years. Consequently, the global trade of these products (within specific tariff codes) has seen a significant increase, growing from approximately $10 billion to $39 billion between 2005 and 2024. In this regard, some countries (including China, India, and Turkey) have sought to capitalize on the growing market opportunities and, through appropriate planning, have managed to increase the export value of these products by an average of 8% annually during the aforementioned period.

In Iran, the presence of diverse climatic regions and vast natural areas provides favorable conditions for the growth and development of various medicinal plant species. According to conducted surveys, there are over 2300 species of medicinal plants in Iran, of which 1728 are endemic and grow in 85 million hectares of natural areas. Additionally, a number of high-demand and commercial species are cultivated in over 250,000 hectares of the country's land. Despite this, Iran's share of the global medicinal plant trade value is meager, and the export value of these plants has not been stable in recent years. A review of empirical studies suggests that Iran's failure to leverage the growing opportunities in the global medicinal plant market, despite its high domestic potential, may stem from problems related to cultivation and production, processing and packaging, domestic and international marketing, management and supervision, and environmental threats.

The present research aims to formulate a strategy for the development of Iran's medicinal plant exports to benefit from the considerable production capacities of these products and their significant economic and environmental advantages for the country. In this regard, based on the opinions of private sector experts as the main drivers of this strategy, the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis method was used to develop strategies, the Quantitative Strategic Planning Matrix (QSPM) was employed to prioritize plans and policies, and the Analytic Hierarchy Process (AHP) was used to prioritize medicinal plant species.

The research findings indicate: 1. Considering the total weighted scores of internal factors (2.4) and external factors (2.5), the development strategy should be formulated in a conservative manner from the perspective of producers and experts. However, from the perspective of exporters, whose weighted average of internal factors is 2.4 and external factors is 2.2, the export development strategy should be defensive. 2. Given the importance coefficients of the proposed plans, establishing a marketing information system (0.0912), increasing market stability (0.0832), upgrading the technology of processing and conversion industries (0.0825), promoting the cultivation model in the country (0.0789), removing trade barriers and providing export incentives (0.0732), and supporting agricultural mechanization (0.0675) are of higher importance in planning for the advancement of the country's medicinal plant value chain. 3. Considering six criteria (profitability, export advantage, added value, climatic adaptability, water and soil conservation, and marketability), medicinal plants with extracts and gums (with an importance coefficient of 0.338), aromatic and essential oil medicinal plants (with an importance coefficient of 0.253), and medicinal plants with seeds (with an importance coefficient of 0.164) hold higher value.

The research results indicate that the export development strategies for the country's medicinal plants should be formulated to eliminate the undesirable gap between the country's production capacities and the export value of these products. In this regard, based on the findings of the SWOT analysis, the strategies are identified: The first strategy is market penetration (i.e., selling current products in current markets) through improving product quality, which necessitates enhancing knowledge and technology in the production, processing, and packaging of medicinal plants. The second strategy is market development (i.e., selling current products in new markets) by strengthening the foreign marketing of Iran's medicinal plants from an external perspective.

Improving knowledge and technology increases the added value and export value of medicinal plants. In the agricultural sector, implementing educational and extension programs to enhance farmers' knowledge and awareness of good agricultural practices and supporting agricultural mechanization are of greater importance. In the industrial sector, supporting knowledge-based companies and providing financial support to active industrial units for process modernization are prioritized. In the marketing and sales sector, establishing an efficient and up-to-date marketing information system that can meet the information needs of traders and merchants will play a significant role in enhancing the knowledge and awareness of the country's exporters.

The marketing sector, as the final link in the value chain, plays a primary role in signaling and directing other sectors in this chain. In other words, marketing, with an outward-looking approach, can organize the medicinal plant value chain according to the preferences, needs, and standards of target markets, leading to the optimal allocation of the country's resources and facilities in this area. Therefore, it can be said that strengthening marketing, especially in the foreign sector, plays a primary role in developing the production and export of Iran's medicinal plants. In this regard, based on expert opinions, the establishment of a marketing information system and commercial support were introduced as priority programs for strengthening international marketing.

Appropriate financial and commercial support can increase the competitive advantage of domestic producers in global markets and enhance their ability for market penetration and market development. One of the obstacles to the competitiveness of the country's medicinal plants is the use of traditional methods in their production and processing, which leads to reduced productivity, increased production costs, and a decline in product quality, ultimately diminishing their competitive power against foreign rivals. The government, by implementing targeted financial support policies and subsidies, can facilitate agricultural mechanization and the modernization of processing and conversion industries. Furthermore, in line with advancing the strategies, it can develop exports by granting export incentives and removing trade barriers, and replace imports by imposing trade restrictions.

Finally, to ensure the effectiveness of program implementation, considering the expert valuations and export values, it is proposed that licorice, asafoetida, Damask rose, green cumin, coriander, and henna be considered as drivers for export development in this field. It is also proposed that by establishing necessary regulations and standards and implementing specialized controls to prevent bulk sales and smuggling, the grounds for enhancing the added value and export value of these products in the country be provided.

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