Lao Cai province in northern Vietnam put into effect Resolution No. 24 (Nghi quyet 24/2026/NQ-HDND), which injects public funds into origin-building for medicinal plants, on 22 August 2026. Connecting seedling production, concentrated cultivation, under-forest cultivation, raw-material-district development, and even storage and processing through a single support measure, it subsidizes, one time only, half of equipment investment up to 5 billion VND per project (about 28.57 million yen, an approximation at 1 yen = about 175 VND). Because crude drugs of Kampo origin such as toki, senkyu and sa nhan are grown here, for procurement staff in Japan hunting for raw materials for yakuzen ingredients and health foods, it becomes material for reading ahead how the supply side is being reorganized.
This article is aimed at buyers and importers in the position of sourcing Vietnamese crude drugs and health ingredients, and at agriculture people responsible for developing origins.
Resolution No. 24 supports half of equipment investment up to 5 billion VND, covering everything from seedlings to processing in one package
What Resolution No. 24 targets is the production of good-quality seedlings, concentrated cultivation over a consolidated area, cultivation of medicinal plants under the forest canopy, construction of raw-material districts that meet standards, and investment in storage and processing. The core is the equipment subsidy, which pays out, one time only, 50% of the purchase cost of machinery, production lines and equipment, up to 5 billion VND per project (about 28.57 million yen). The key point of this ordinance is that it stepped into a design that assembles everything through to post-harvest processing as a single flow, rather than a subsidy merely for expanding planted area.
A scheme that subsidizes only the upstream easily preserves the structure in which the harvest is beaten down on price while still fresh and unprocessed. By extending the half-subsidy of equipment investment all the way to processing, an aim of leaving value-added at the origin can be read.
Traphaco Sa Pa's 60 ha of contract farming binds together several hundred households in Sa Pa and Ta Phin village
A real example that backs the ordinance is the contract farming of Traphaco Sa Pa, which manufactures extract of actiso (artichoke). The company organizes about 60 ha in the Sa Pa town area and Ta Phin village and, teaming up with several hundred farmer households, buys over 2,000 tonnes of fresh and about 70 tonnes of dried a year. In a vertically integrated form where a single company holds everything from cultivation through primary processing to extract manufacturing, farmers can have a set buyer while concentrating on cultivation.
With medicinal plants, relying on wild harvesting stabilizes neither supply volume nor quality. This model of switching to cultivation and fixing the buyer overlaps with cases in the same north as Lao Cai, the case of Lang Son putting sa nhan on commercial cultivation under the forest and the move by Quang Ninh to turn the medicinal root 'dia lien,' whose wild harvesting had reached its limit, into a cultivated origin- the flow in which the upstream of crude drugs is shifting from mountain gathering to contract origins is advancing simultaneously in the north.
6,500 ha and 30,000 tonnes a year province-wide, but production value stays at about 10 billion VND
Lao Cai province's medicinal plants reach a planted area of about 6,500 ha and annual output of over 30,000 tonnes, while production value stays at about 10 billion VND (about 570 million yen). The reason the money does not grow relative to the volume is that much goes out as fresh or dried primary goods. The main cultivated items are actiso, tam that (dien that), toki, senkyu, sa nhan, che day (a kind of sweet-tea vine) and giao co lam (jiaogulan), and conservation of rare species such as sam bu diep and hoang lien (coptis) runs in parallel.
| Indicator | Lao Cai province total | Traphaco Sa Pa contract portion |
|---|---|---|
| Cultivated area | About 6,500 ha | About 60 ha |
| Annual production | Over 30,000 tonnes | Over 2,000 tonnes fresh / about 70 tonnes dried |
| Annual production value | About 10 billion VND (about 570 million yen) | — |
| Main items | Actiso, toki, senkyu, sa nhan and others | Actiso |
The amount is Lao Cai province's announced value. Yen conversion is an approximation at 1 yen = about 175 VND.
The director named the thinness of seedlings and demand areas as part of the "three elements"
Tran Minh San, director of the provincial agriculture-and-environment department, said that origin-building for medicinal plants cannot do without three things - good-quality seedlings, the people who carry out cultivation, and demand areas to sell to - and pointed out the need to assemble the entire supply network, not merely expand the area. Put the other way, these three are the current weaknesses. The mechanism for stable seedling supply is thin, processing equipment is short, and the proportion flowing out while still fresh is high. Resolution No. 24's equipment subsidy and support for under-forest cultivation are placed as the order for filling these weaknesses. Lao Cai holds about 865,000 ha of forest, with ample room to grow medicinal plants under the canopy.
The point that seedlings are thin directly connects, from the procurement side's view, to variation in quality. Unless the originating species are consistent, even the same "toki" wavers in both components and appearance from year to year. At a contract origin with a fixed buyer, the seedlings' supply source can also be aligned, and on this point the Traphaco Sa Pa-style vertical integration pays off. Resolution No. 24's inclusion of seedling production itself as a subsidy target is a design that grasps the order that, even if you increase only processing equipment, an origin will not grow unless raw-material quality comes with it.
As the upstream of toki, senkyu and sa nhan: what Japanese yakuzen and health-ingredient buyers should watch now
Toki, senkyu and sa nhan are crude drugs used in Japanese Kampo prescriptions and yakuzen ingredients too, and Lao Cai can become their raw-material origin. For Japanese buyers, the significance lies in the point that contract farming and processing are backed by the system and primary-processing capacity builds up at the origin. Rather than buying fresh and processing it yourself, the possibility of drawing raw material that is already dried or extracted from the origin opens up. As an option for diversifying the sourcing of crude drugs that tend to depend on North China or Chinese origin, such as toki and senkyu, it is worth looking at northern-Vietnamese highland origin at an early stage. However, because for medicinal plants pesticide residues, heavy metals and species identification are the lifeline of quality, one should go in on the premise of checking certificates and traceability even more strictly than for fresh fruit.
Practical points to secure in procurement
- Centering on contract origins that have a buyer (Traphaco Sa Pa type), approach suppliers that are integrated from cultivation through primary processing as a priority
- Narrow to items whose Japanese demand can be read, such as toki, senkyu and sa nhan, and sound out taking them in higher-processed forms such as dried or extract rather than fresh
- Check, lot by lot, the test certificates for pesticide residues, heavy metals and originating species (species identification), and the origin certificate of the cultivation site
- Confirm whether the seedling supply source is fixed, and see whether the system keeps quality from wavering year to year
- For rare and conservation-target species, inquire in advance about the legal regulations on whether trade is permitted, and obtain backing that it is cultivation-derived
Lao Cai's Resolution No. 24 has only just started moving on 22 August, at a stage where additions of processing equipment using the subsidy and new entrants are yet to emerge. If you put a northern crude-drug origin on your sourcing candidate list, the next move is to inquire about the primary-processing situation with existing contract origins like Traphaco Sa Pa while following the moves of operators that bring in new processing equipment under Resolution No. 24. The wide supply room of under-forest medicinal plants Nghe An province's design integrating large-diameter timber and forest-floor medicinal plants across a 618-ha forestry zone also connects with it, and the upstream of crude drugs is thickening simultaneously in northern and central Vietnam.
