4.3.5.4 Market growth potential and substitution possibilities

There is no doubt that there is a potential demand for neem pesticides and other non-synthetic pesticides, especially for vegetables and fruits produced for the export markets. Within the country resistance of pests to pesticides is increasing all the time. The market for certified organic produce is expanding greatly and will also require appropriate means for pest control.

One product competing with neem pesticides is Bt. Today neem-based pesticides cannot compete with cheap synthetic pesticides, but only with specialised synthetic products such as Pegasus, which is sold for 1204 pesos/l by Bayer Dominican Republic and has to be applied at 0.75 l/ha, while biological agents such as 500 g Bt (manufactured by Turilav) is sold for 280 pesos by LIGA (which works out at 420 pesos/ha).

A central constraint on the dissemination of neem pesticides is the lack of distribution by the agricultural supply trading agencies. The NGO FAMA is not in a position to set up an effective distribution service of its own. The only agricultural supply trader selling FAMA products is LIGA, which also sells other biological products. The area covered by LIGA's outlets is very limited, which means that FAMA's products are not available throughout the country, and not even in the main centres of agricultural production such as Constanza, San Juan, La Vega and San Jose de Ocoa.

In addition to LIGA's outlets neem products can be purchased at the "Centros des Acopio" in Azua and Bani, directly in San Cristobal at the neem plant and at FAMA's office in Santo Domingo. However there is no doubt that there are too few outlets.

A further related problem is that FAMA has limited staff resources and that the time spent on distribution reduces the time left for training and awareness-raising.

Training, qualification and extension services concerning pesticides in the Dominican Republic have to be carried out by the agricultural suppliers. Currently only LIGA is doing so for neem pesticides. The technicians of the governmental extension service SEA are given advice on neem products at IPM training. Additionally some NGOs provide information on neem within their project activities. For example the GTZ project "Asosiacion para el dessarollo de San Juan de Ocoa", is training about 4000 farmers, 30 of whom apply neem pesticides on vegetables.

Transport for the distribution of pesticides is not a problem in the Dominican Republic, if they are part of agricultural supply system.

The site where FAMA is location can be considered as optimal concerning import of raw material and distribution of products.

A further restriction is that neem products are not included in the widely applied credit scheme. Normally the farmers in the Dominican Republic get agricultural inputs on credit which has to be repaid within 30 days.