Economic Potential of Neem

The Neem tree is now gaining the importance due to its wide scope of commercialization in the areas of agriculture, veterinary, cosmetics, medicine, toiletries and various industries. Neem is now becoming a popular in cosmetics and beauty aid. Some companies are now using Neem products (Neem oil and leaves) for production of cosmetics like facial creams, nail polishes, nail oils, shampoos, conditioners etc.

The demand of Neem products are increasing day by day. Agriculture sector is now becoming a major consumer of the neem products viz. Neem oil, neem cake and neem based pesticides. Being eco-friendly and natural source of phyto-chemicals and nutrients it is preferred to apply Neem manure and pesticide in agriculture especially in organic farming all over the world.

The coating of urea with Neem products has been given priority to minimize the losses of nitrogen. Government of India has recently allowed fertilizer firms to produce 100% Neem Coated Urea – a move aimed at helping farmers boost income & reducing subsidy bill by up to Rs. 6,500 crore. Government of India has done away with the cap on Neem – coated Urea & now it can be produced 100%. It is a win – win situation for all the players in the field- the industry, farmers & Neem seed collection Agencies.

The countries like India and many African countries having large number of neem trees are the major source of neem fruits and neem products. If commercial plantation and agro-forestry involving neem is popularized, the potential goes up significantly, with positive and large externalities for pesticides, fertilizers, livestock, dairying and other value-added products.

Villagers collecting neem fruits

Villagers collecting neem fruits

Neem tree has great potential to help small and marginal farmers in rural India, Africa and Latin America. Farmers, who have limited resources, can benefit in many ways from neem. There are easily exploitable, employment and income generation opportunities in the cultivation of neem and processing of neem products, some of which are possible in a decentralized manner on the basis of small investments. Most of the developing countries have vast areas under marginal lands with low productivity. As neem has multiple uses, its crop on marginal lands can make a significant contribution to rural economies.

Incentives for neem seed collection-in keeping with the current economic realities-must be strengthened along with organizational improvements for marketing of neem seeds. Organizational, financial inputs and a policy for integrating neem in the framework of agriculture, rural and small industries policies is needed in order to realize this potential

Adequate supply of good quality neem seeds in a timely fashion is critical for the commercial success of Neem. In India, facilities already exist for extraction of oil from neem seeds. It is possible to use the pre-existing facilities for obtaining bitter extracts. However, unlike in the case of oil extraction, to get good quality Neem active extracts, the extraction procedures have to be of high standards. Proper care has to be taken in handling seeds at various stages including procurement, drying and storage.