About NABARD I Role and Functions I Subsidiaries
I Associates
I Rural Economy I Model Bankable Projects
 Minor Irrigation  
 Land Development  
 Plantation / Horticulture  
 Agricultural Engineering  
 Forestry / WasteLand  
 Animal Husbandry  
 Medicinal & Aromatic  Plants  

Model Bankable Projects


Medicinal & Aromatic Plants



The commercial importance of medicinal and aromatic plants has been widely recognized during the recent past. In India, various types of climate and soils are available, hence medicinal and aromatic herbs can be grown naturally all over the country. Though, the value of raw material may be less, but processed products,  extract oil can be sold with higher rates which may be done on small scale industry, on farms.

 Aromatic oils and their compounds have very good demand in national and international markets. Use of aromatic plants and their products is as old as our history. The herbal products like high grade scents, flavored food products, cosmetics, toiletries, various types of scented soaps, talcum powders, face powders, creams, Agarbatties, repellents etc. contain extracts of aromatic plants. Some of the plants products/parts are used as spices for flavoring the meal or fast food products as also medicinal products.

Importance of essential oil industry in India :

  • The aromatic plant and aroma chemicals contained in them, play a vital role in our day to day living. Many people use perfume and perfumed products.
  • India has varied climate conditions and suitable soil exists in one or other part of the country. Hence, it is possible to grow almost any type of essential oil bearing plant.
  • India’s share of essential oil in the world market can be improved greatly if some of the bottlenecks that prevail now are removed. They are
  • Adoption of age old technology for essential oil production.
  •  Wide quality and price fluctuations.
  • Availability of low priced synthetic substitutes.

 2.Importance of Patchouli

 One of such aromatic plants coming into prominence is Patchouli. Patchouli is a herb growing in a number of countries in South East Asia.  In India, it is known as Panadi or Panch which bears flowers, but not suitable for oil. Indonesian variety is used for oil extraction.  Consumption of patchouli oil in the world is about 1,000 MT per annum.  Indian consumption of this oil is about 70 to 80 MT per annum.  At present it is mostly produced in Indonesia.  India has considerable scope to enter the world market.  Even if 10,000 acre of land is cultivated, the oil produced can be easily marketed globally. 

Keeping in view the scope available for patchouli, Kelkar Scientific Research Center (KSRC), Mumbai, a trust promoted by M/s S.H. Kelkar & Co. Ltd. has encouraged its cultivation. They have standardized the agrotechnique and provide the planting material of selection yielding high quality oil. M/s Keva Biotech provides the buy back guarantee for three years on renewable basis for the produce.  In order to increase patchouli cultivation in collaboration with user industry with financial support from banks, the present model is prepared by NABARD.

3.Project Details

Based on the feedback received from scientists of Kelkar Scientific Research Center, Mumbai the model has been prepared. The model envisages production of patchouli in 1 acre area under the following two conditions :

            i)  Cultivation under flood irrigation and

            ii) Cultivation under drip irrigation system. Both are cultivated under open conditions. Besides, it can also be cultivated as inter crop with other perennial crops such as coconut etc.


The primary objective of the model is to serve as a guide on techno-financial aspects of preparation/ appraisal of  bankable projects on patchouli cultivation by the financing banks.


The beneficiaries could be individual entrepreneurs and farmers. Technical tie-up with research institutes such as KSRC and marketing tie-up with Keva Biotech, Mumbai is a prerequisite for the project. As the cultivation of patchouli is innovative in nature, promoters having relevant technical experience will have additional advantage.

6.Soil & Climate

Most soils with good drainage are suitable for cultivating patchouli.  Water logged soils are found to be detrimental for the crop and must be avoided because they are susceptible to nematode attack.  Generally humid climate with plenty of sunlight is suitable for this crop.  The plant grows well as an inter crop in partial shade, but complete shade should be avoided. For good growth of the plant, temperature between 250C to 35oC is found to be ideal.  Once planted, the plants give good yield of leaves for at least 3 years.

7.Selection of Location

As patchouli thrives well under humid conditions, coastal areas (Maharashtra, Goa, Karnataka & Kerala) are suitable for this crop which have congenial climatic conditions. It is possible to cultivate patchouli commercially in various locations of the country having congenial climate. Factors such as number of farmers ready to take up the crop for better supervision, availability of perennial irrigation source and marketing arrangements should be taken into account for selection of the site.

9.Unit Size

There is no minimum economic size for patchouli cultivation. The project envisages cultivation of patchouli in one acre area which can be easily managed by the farmer and provides sufficient income. It is however desirable to adopt the cluster approach wherein more than 10 farmers join the cultivation in their small holdings.

10.Agro Technique and Source of Technology

The agrotechnique for the cultivation of patchouli has been standardized by KSRC. It provides training and technical guidance on cultivation aspects of the crop and also provides technical consultancy to private entrepreneurs for setting up of production of commercial units in the State. 

10.1 Cultivation Methods

Patchouli can be cultivated as pure crop and intercrop under following  two methods :

Ř   Standard practice using conventional method of irrigation.

Ř   Drip irrigation method using fertigation for providing nutrients.

The yield under drip irrigation is nearly 2 times that of conventional method.

10.2 Variety   

There is no established variety of Patchouli under cultivation. In the project, the variety selected from natural flora by Kelkar Scientific Research Center, Mumbai is recommended.  This selection is reported to be suitable for production of best quality essential oil.

10.3 Spacing and Plant Population

The recommended spacing is 30 cm x 30 cm under open cultivation for both drip and conventional irrigation.  Number of plants accommodated would be around 30,000 per acre.

For intercropping in partial shade, 45 cm x 45 cm spacing is recommended accommodating 19,750 plants per acre.

10.4 Planting Material and Cost

Authentic planting material  of a variety suitable for essential oil is prerequisite for successful cultivation. Two types of planting material are supplied by KSRC. They are - (a) Rooted cuttings (b) Rooted and hardened tissue culture plants. It is recommended to use tissue culture plants.

Cost of rooted cuttings supplied by KSRC is Rs. 2/ plant while, rooted and hardened tissue culture plants cost Rs. 5 per plant. For cultivation of one acre, 400 plants are required as mother stock.  Around 5% mortality during establishment in the field is assumed.

10.5 Land Preparation

Followed by land clearing, ploughing  two times is recommended. Each ploughing by tractor takes about 3 hours.  Land leveling costs are not considered since they vary widely from site to site. Farmyard manure (12 tons/acre) is to be mixed well with the soil.  Antinematode material like neem cake should be added at the root zone and mixed well with the soil to avoid nematode attack. 

10.6 Planting Time

Planting can be done at any time of the year except in hot months like April, May or October. Once planted, the plants give good yield of leaves for 3 years.

10.7 Irrigation schedule

As indicated earlier, patchouli can be cultivated in two ways depending on the method of irrigation followed. Under conventional method, irrigation is to be provided at least twice a week. Water logging must be avoided. Number of irrigation per year will be around 60 (no watering during monsoon) with each irrigation lasting for 3 hours with 5 HP motor.

Under drip system of irrigation, irrigation is provided by a drip with nozzles at a distance of 45 cm from each other, which discharge at a rate of 2 litres of water/hour.  Irrigation for 30 minutes per day is adequate.  In hot and dry season it should be upto a maximum of 60 minutes in two installments.

10.8 Manure and Fertilizer schedule

Based  on the soil fertility status, fertilizer dose has to be decided. At the time of land preparation, around 12 MT of FYM/acre is to be applied. Neem cake for control of nematodes is applied at the time of planting @ 0.4 MT/ acre. Thereafter, the fertiliser schedule decided based on soil fertility status is to be followed. 

10.9 Plant Protection Measures

Other than nematodes, problems of aphids and caterpillars have been observed in patchouli which can be controlled by use of malathion or endosulphon sprays. For control of nematodes and Fusarium wilt, good drainage coupled with soil application of neem cake at the time of planting @ 0.4 MT per acre is recommended.

10.10 Plantation Management

Not much maintenance is required for Patchouli. Regular weeding, nutrient application and harvesting are the major activities involved in its cultivation.

10.11 Harvesting and Yield

Crop maturity

6 months - First harvest is possible after 6 months when the plants are about 1m high.  The first harvest can be taken after 3 months if tissue culture plant are used. 

Economic life

3 years

Harvesting method

The plant is harvested at 6-8 nodes from the apex. It should be harvested with a sharp cutting tool.  The new shoots come from the nodes and if the cutting is done too low the next harvest will be affected.  Thereafter the cutting can be taken every 3 months.  In rainy season, fungicides should be sprayed after harvesting.  Harvested material is dried in shade.

Harvesting is preferably done during drier months.


Under conventional irrigation : 10 MT (3 cuttings) per acre p.a. Drip system of irrigation   : 20 MT (3 cuttings) per acre p.a.

Harvested biomass is dried under shade for 4-5 days giving 1.8 to 4.5 MT of dry biomass per acre per year.

As an intercrop, 2 MT dry biomass per  acre per year can be expected.

Price & Returns

M/s. Keva Biotech Ltd., a subsidiary of S H Kelkar & Co. Ltd.,, provides buy back assurance  for 3 years at a fixed rate of Rs. 20,000 per MT of dry biomass (delivered at Mulund, Mumbai).


11. Requirements of the Project 

The major components of Patchouli cultivation project are given as under :

11.1 Land

Land is required for nursery, cultivation and drying the harvested biomass.  The present model is prepared for 1 acre land area.  It is assumed that the land is having permanent irrigation source such as well/ tube well/ river and owned by the farmer. 

11.2 Civil Works

After harvesting, the biomass is to be dried under shade for 4 to 5 days.  Drying shed with thatched roof and mud floor is considered with a drying area of 1000 sq. ft. For drip irrigation system,  pump house needs to be constructed.

11.3 Fencing

For protecting the crop & drip lines from trampling by animals, barbed wire fencing with cement poles has been provided in the model.  Size of cement poles is assumed at 150 mm X 100 mm X 2 m and length of wire is 2880 m for one acre area.

11.4 Irrigation

Assured irrigation source is essential for successful cultivation of patchouli. KSRC has standardized the agrotechnique for cultivation of patchouli both under conventional method and drip method of irrigation system. It is assumed that only those farmers having an irrigation source only will take up the cultivation. For drip system, a motor (3 HP) and pumphouse are to be provided. Irrigation is provided by drip with nozzles at a distance of 45 cm from each other, which discharge at a rate of 2 litres of water/hour. Suitable drip irrigation system will be designed on the farm on the basis of the following data:

Basic data - land slope, plant spacing, length of main line and laterals.

Irrigation water requirement

Emitters - number and spacing

Size and length of Main line and Laterals, manifold etc.,

HP of pump set

In the model, total cost of drip irrigation system is assumed at Rs. 40,000 for one acre of patchouli crop.

11.5 Planting Material

Two types of planting material are supplied by KSRC. They are - (a) Rooted cuttings (b) Hardened tissue culture plants.  It is recommended to use tissue culture plants.

Cost of rooted cuttings supplied by KSRC is Rs. 2 per plant while, hardened tissue culture plants cost Rs. 5 per plant. For cultivation of one acre, 300 to 500 plants are required as mother stock.  Around 5% mortality during establishment in the field is assumed.  Other raw materials such as manure and fertilizers, agrochemicals are locally available.

11.6 Manpower

Cultivation of patchouli will be taken up by individual farmers. Training and field guidance is available from KSRC and as such availability of labour should not be a problem.

12. Project Cost

On the basis of the field studies and discussion with scientists of Kelkar Scientific Research Center, estimated cost for cultivation of patchouli in one acre area is indicated below :

            a) Capital cost                             

                          i)  Cultivation under flood irrigation                    : Rs. 1,00,459

                        ii) Cultivation under drip irrigation system : Rs. 1,43,691

            b)  Recurring cost (Year 2 & 3)               

                        i)  Cultivation under flood irrigation                    : Rs. 20,948

                        ii) Cultivation under drip irrigation system : Rs. 23,205

Details are presented in the Annexure.

13. Projected Benefit

The plant is harvested 6-8 nodes from apex of individual branches. First harvest is possible after 4-6 months when the plants are about 1m high.  Harvested biomass is dried under shade for 4-5 days. Under conventional irrigation, 3 MT (3 cuttings), while under drip system of irrigation, 4-5 MT (3 cuttings) of biomass per acre can be harvested every year.  As an intercrop, 2 MT biomass per acre per year can be harvested.

M/s. Keva Biotech Ltd., a subsidiary of S H Kelkar & Co. Ltd., provides buy back assurance  for 3 years at a fixed rate of Rs. 20,000 per MT (Rs. 20/1 kg) of dry biomass (delivered at Mulund , Mumbai ).

The estimated total benefits per acre will be as under

                                                                              Year 1              Year 2 & 3        Total

i)  Cultivation under flood irrigation           : Rs. 40,000                    70,000          180000

ii) Cultivation under drip irrigation system    : Rs. 50,000                1,00,000       250000

Details are given in Annexure.

14. Financial Analysis

The financial viability of the project has been analyzed (Annexure) and the results are given below :

                                    Cultivation under                   Cultivation under                   

                                    flood irrigation                     drip irrigation system

            NPW            :            Rs. 316                                    Rs. 11,065

            BCR            :            1.14 : 1                                    1.17 : 1

            IRR            :            15%                                         25%


15. Financial Assistance

Projects on cultivation and processing of medicinal and aromatic plants are accorded top priority by NABARD for providing the refinance support. Banks may avail of the facility to provide term loans to location specific projects subject to their technical feasibility, financial viability and bankability  along with  buyback arrangement.

16. Margin Money

Margin money will range from 5% to 15% of the project cost depending upon the category of the farmers.

17. Security

The bank shall obtain security as per guidelines issued by Reserve Bank of India from time to time.

18. Rate of Interest

The rate of interest to be charged on ultimate borrower will be in accordance with the instruction of NABARD / RBI  from time to time. In the present model, an interest rate of 13% p.a. for the farmers has been assumed.

19. Repayment

On the basis of income generated, the farmer will be able to repay the interest and principal within a period of  3 years (Annexure).

Farm Model for Patchouli

(Unit : 1 Acre) 

Variety                                     :          No established variety.Superior selections will be used.


Spacing & No. of plants / acre :            Conventional Method of Irrigation : 30cm x 120cm, 11,000 plants / acre

                                                            Drip System : 30cm x 120cm, 11,000 plants/ acre

Planting material                       :             Hardened tissue culture plants.

Yield and Income Parameters

Sr. No.



Method of
System of


Years Years









Yield - Dry biomass

MT/ acre








Total Income @








go to top




  Technical Services Department
This division is the service provider on technical issues
© NABARD 2007 Privacy Policy | Disclaimer | Feedback | Contact us | Sitemap
Site designed & developed by : Lintas Personal (SRS), 2007
Site maintained by : Sify Technologies Limited.