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close this bookCase Studies of Neem Processing Projects Assisted by GTZ in Kenya, Dominican Republic, Thailand and Nicaragua (GTZ, 2000, 152 p.)
close this folder1. Introduction
View the document1.1 Survey of the GTZ's neem activities
Open this folder and view contents1.2 General introduction to neem products

1.1 Survey of the GTZ's neem activities

Over the past 25 years the Deutsche Gesellschaft fhnische Zusammenarbeit (German Technical Cooperation, GTZ) has supported research, dissemination and use of agricultural applications of neem and neem products, particularly with regard to environmentally sound forms of plant protection and pest control (Schmutterer & Ascher 1980, 1984, 1987, Brechelt & Hellpap 1994, Foerster et al 1999) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

In most cases, neem-related activities have been only a sideline of bilateral GTZ projects, e.g. those working on Integrated Pest Management (IPM). The only exception was the former supra-regional "Production of Natural Pesticides from Tropical Plants", often called simply the "Neem Project" in cooperation with the University of Giessen, with a field station in the Dominican Republic (1977-1995).

The objective of the project was to introduce the use of seed extracts and seed oil produced from the neem tree as insecticides for pest control for use by farmers in pilot regions. To achieve this aim, the supply to farmers of neem seeds as raw material was improved, methods for the production and application of simple neem products were developed and their socio-economic acceptance was investigated. In addition, information about the appropriate use of neem was spread among farmers and interested institutions and neem programmes and projects of NGOs were promoted. In cooperation with the University of Giessen, the project carried out in-depth investigation of the neem tree. Cooperation was also established with a range of NGOs in Sri Lanka, Thailand, Nepal, Niger, Haiti, Ecuador and the Dominican Republic.

The project has built the base for a wide range of neem projects operating within development cooperation world-wide, both at governmental and at non-governmental level. Today, five years after termination of the Neem Project, NGOs in Sri Lanka, Thailand, Ecuador and the Dominican Republic are still manufacturing and selling neem products.

When the Neem Project was due to be phased out in 1994/95, the GTZ's "Supra-regional Pesticide Service Project" took over the task of promoting the use of non-synthetic, and in particular neem-based, pesticides and other pertinent objectives until 1999, when it was succeeded by the project "Improving the Quality of Agricultural Produce" from 2000 onwards. Supra-regional activities concerning neem are also offered by GATE within their NGO-promoting programmes (ongoing) and for east Africa by the IPM Horticulture Project in Kenya (until 2000).

The following table gives an overview of the supra-regional GTZ projects working on neem:

Table 1: Supra-regional GTZ projects with a neem component:

· "Production of Natural Pesticides from Tropical Plants" in cooperation with the University of Giessen, with a field station in the Dominican Republic (1977-1995): basic research, appropriate technologies for small farmers to produce neem pesticides, NGO support.

· "Biological-Integrated Locust Control" (1989-1999): has for 10 years investigated the effects of neem used for locust control.

· "German Appropriate Technology Exchange - ISAT/KPF/GATE" (ongoing): neem is one appropriate technology among others; target group NGOs, knowledge transfer, technical advice, limited assistance possible via "Small Scale Fund" - KPF e.g. in the Dominican Republic, Ecuador and Cuba.

· "Pesticide Service Project"/" Improving the Quality of Agricultural Produce" (1994-2000): both based at the GTZ Head Office in Eschborn, promoting neem as an alternative pesticide since 1994: technical advice, fact-finding and feasibility studies, socio-economic analysis of neem processing; conducting fact-finding (baseline) studies, seminars and workshops, planning neem projects.

· The IPM Horticulture Project, located in Nairobi, Kenya, at ICIPE and focusing on east African countries (1996-2000): this project aims to develop integrated concepts for producing high quality vegetables, fruits and ornamental flowers for export and local consumption. Target groups are the producers of fruit and vegetables in eastern and southern Africa, and small farmers as well as plantation farmers. A small project was elaborated and set up jointly in cooperation with the Pesticide Service Project, ICIPE and an entrepreneur, aiming to produce and register affordable neem-based pesticides in Kenya. The production unit was set up at Technopark ICIPE.

Bilateral projects:

Within the bilateral IPM projects (initiated at the request of our partner countries), the activities on neem are usually only one component among several, but their relative importance is steadily increasing. An overview of the projects is provided in Foerster (2000, 1999).

The expectations regarding the use of neem as a pesticide were that small farmers would adopt the technology of preparing and applying simple aqueous extracts of neem and that toxic broad spectrum synthetic pesticides would be replaced by neem extracts, beside the further merits and benefits listed in Table 2:

Table 2: Merits and benefits of neem:

Merits and benefits of neem (part I)

Environmental advantages:

· suitable for afforestation of wasteland, soil improvement
· rapid growth even on marginal sites
· attractive tree providing welcome shade in private and public places and in agriculture
· pesticides with low toxicity to mammals and birds
· rapid decomposition in the environment and therefore no contamination of water, soil or air
· pesticides largely benign to beneficial insects
· little likelihood of resistance developing

· better use of nitrogen

During the project planning phases some experts argued that the effect of promoting crude water extracts would be limited and that it would be better to develop ready-to-use products. This strategy has been pursued in a bilateral IPM project in Myanmar, where an extraction plant was established as early as 1986, which is producing standardised neem-based pesticides. The market conditions in Myanmar are, however, artificial and cannot be compared to those of other countries.

As well as the merits and benefits of neem listed above, neem processing and the manufacture of commercial products have the following advantages:

Table 3: Advantages for the national economy:

Merits and benefits of neem (part II)

Advantages for the national economy:

· added value within the country

· reduces foreign currency spending

· pesticides are also available on the spot in remote regions, therefore enhanced added value in agriculture

· avoids extra costs incurred by the use of synthetic pesticides (poisoning, accidents during transport, contamination of drinking water, etc.)

· pharmaceutical usage

· potentially an additional cash crop

· resulting possible sources of income also in disadvantaged (dry) rural regions

· job creation

· a national insecticide - an additional export product

In the mid-1990s the GTZ evaluated the potential of the neem tree. Its potential is not exploited to a great extent considering the strikingly long list of merits and benefits presented above. To identify the main constraints which hamper the use of neem pesticides in agriculture, a questionnaire was carried out (Moser 1996, Foerster & Moser 2000).

It turned out that the main limitations on the wider use of neem were:

· lack of knowledge about neem

· poor access to neem raw material and neem-based pesticides

· doubts about its efficacy which could also be due to a lack of knowledge about neem and lack of standardisation

· labour constraints on preparing neem water extracts

· difficulties in handling

· the few available commercial neem-based pesticides were often too expensive, making the application of neem-based pesticides uneconomical.

These findings led to the conclusion that if the above-mentioned benefits were exploited to a greater extent, to increase the wealth of the people in developing countries, it would be essential to continue to:

· spread information on neem and raise awareness

· intensify the training with neem products,

· and also

· to come up with a competitive ready-to-use formulation which is easy for small farmers in developing countries to handle.

This was the aim of the three small projects presented here in Thailand, the Dominican Republic and Kenya, which were assisted in various ways by the GTZ (see below).

A great deal of the data and results presented here are based on an evaluation carried out by Dr W. Leupolz, CiM, H. Quentin, Consultant and Dr S. Praneetvatakul and her team, Kasetsart University, Bangkok, at the end of 1999 according to our Terms of Reference.

The evaluation aims to answer the following key questions:

· Is neem processing profitable for small entrepreneurs in developing countries?

· What are the key factors determining whether neem processing is profitable?

· To what extent can neem pesticides substitute synthetic pesticides?

· What are the "bottlenecks" hindering neem products from gaining a greater market share?

· Are the constraints caused by the internal factors of neem processing or by the frame conditions?

· What factors determine the price of neem products?

· What is the potential market share for neem products?

· What recommendations can be given, and what strategies pursued to promote neem in the future?

The objective of the case studies presented here is to document and evaluate the neem activities assisted by the GTZ in Kenya, Thailand, the Dominican Republic and Nicaragua, as examples of developing small-scale industrialisation of neem-based insecticides in developing countries from three continents.

The backgrounds of all these projects vary, not only due to the different ethno-social environment, and size and market conditions, but also due to the political and economic frame conditions in the individual countries. Surprisingly, however, there are a lot of similarities among the three projects and the problems they have encountered. The fact that there are many similarities despite the different frame conditions emphasises the importance of such a supra-regional project in the steering and back-stopping of such activities.

Over the last 25 years considerable progress has been made in raising awareness of the potentials of neem and to a certain extent of neem products, too.

However, more emphasis is needed on demonstration and training with neem products, and particularly on how to identify and implement efficient marketing and distribution channels for reliable standardised neem products manufactured by small-scale enterprises.

Given their properties and price, the existing (available) neem pesticides are a viable alternative for niche markets where they have the potential to gain a considerable market share.

If the expectation that neem pesticides can replace standard broad-spectrum pesticides to a considerable extent is to be fulfilled, a change of frame conditions is required, such as integration into IPM research, training and promotion concepts, a reduction of the retail price for neem pesticides by 25-40%, tax exemption, efficient marketing and distribution channels and integration in credit packages, amongst other items.

Hopefully further organisations will in future assist neem-manufacturing companies, NGOs and government organisations in training. This training should be directed at how to use neem, and at setting up distribution channels. These organisations should also advise local and/or national authorities on how to create favourable frame conditions for manufacturing, applying and selling neem-based products to take advantage of local resources and reduce the environmental and health effects caused by synthetic pesticides.


The neem tree is a hardy, multipurpose tree, well known for its medicinal properties, and also as a source of timber and of materials for producing cosmetics, toiletries and pharmaceuticals. The tree is often planted to give shade, as a windbreak and for reforestation.

Neem-based water extracts, neem oil, leaves and cake have been used traditionally for thousands of years on the Indian subcontinent - in particular in India against various insect pests, although the knowledge was often lost during the time of the "green revolution". There is a growing interest in the potential of the neem tree as a source of natural pesticides.

Intensive research and screening of plants with insecticidal properties, e.g. by the GTZ Neem Project and biocontrol projects (Schmutterer & Ascher 1980, 1984, 1987; Brechelt & Hellpap 1994, Grainge & Ahmed 1988) have shown neem extracts to be the most promising plant extracts for insect control, especially in integrated pest management (Hellpap 1996).

Neem's unique properties as a pesticide, namely non-toxicity to warm-blooded organisms, potential to control a wide range of pests, relatively low toxicity or non-toxicity to beneficial organisms, and low persistence in the environment, make neem-based products a better alternative to synthetic chemicals, particularly in the context of sound plant protection.

1.2.1 Need for neem products for pest management

In many developing countries, it is often felt that the pressure to increase agricultural production in order to cope with the growing population has promoted the use of pesticides to protect crops from pests and diseases. The careless and indiscriminate use of synthetic pesticides has led to well known problems such as environmental contamination, toxic residues, side-effects on non-target organisms, increasing pest resistance to pesticides and pest resurgence, the so-called "pesticide treadmill". The growing awareness of consumers and producers about these problems has prompted a search for a more ecologically rational approach to pest management. Thus the EU and other industrialised countries have set maximum pesticide residue limits (MRLs) for fruit and vegetable products. This has put pressure on agricultural producers to look for alternatives to synthetic pesticides, such as neem-based pesticides.

1.2.2 Efficacy of neem-based pesticides

Comprehensive research on the effects of neem has been carried out around the world, mainly in India, Germany and the US, and in many other countries, often assisted by GTZ projects.

There is no doubt any more that neem extracts and products are effective in controlling a wide range of pests (Schmutterer 1995).

According to Schmutterer (1995, 1998) the neem-based extracts display an array of effects on insects, such as:

· antifeedancy
· reduction/prevention of settling and oviposition
· disturbance of metamorphosis
· sterilisation
· reduction of activity (fitness)
· effects on cell level (molecular level)

Despite the fact that neem is effective against a wide range of pests, it is much more selective than standard broad-spectrum pesticides in the pests and beneficial organisms it effects. Therefore it must be quite clear which pest is to be controlled in which crop, and sometimes even at which stage of the crop. Otherwise the application of neem will fail and the farmers will disappointedly turn away from this environmentally sound alternative.

One reason for some disappointment lies in the fact that "neem" does not always mean the same thing. To date more than 145 active ingredients have been identified (Morgan 1999), of which 40 are assumed or proven to have insecticidal properties.

· Azadirachtin (C35H44O16), the most active insecticidal substance in neem seed, disrupts growth, prevents moulting, causes sterility of eggs, and other effects.

· Nimbin is a feeding repellent.

· Salannin inhibits feeding.

It is not known exactly which synergistic or additional effects the other ingredients or metabolites have. Even if pesticides are standardised, the quality parameter refers to the azadirachtin content only, despite the fact that the other active ingredients (Als) are as important or even more important against many pests. Therefore the need to select further Als for quality parameters is occasionally discussed (Foerster 1998). This, on the other hand, would increase the costs of quality control considerably.

The potential of the neem tree as a source of natural pesticides has been exploited in the production of neem-based pesticides in several countries, often at cottage or small-scale level.

The following table (Table 4) lists possible neem products for agricultural usage:

Table 4: Overview of various neem products and target pests:



Application areas

Alcoholic extracts

Mostly ethanol, methanol, based on cake or kernels

Leaf chewing insects such as Lepidoptera

Raw, formulated or enriched neem oil

Cold pressed, problem: aflatoxin contamination

Sucking insects such as whitefly, aphids

Refined oil as fungicide

Neem cake

Quality depends i.a. on pressing method (temperature);

Ground and mixed with shells or directly applied

Nematodes, systemic effects if applied in nurseries and to young or green (not woody) plants,

As powder or extracts against biting pests

De-nitrogenic bacteria suppressed

Remains (cake of alcoholic extraction)


Effect not properly investigated

Azadirachtin-enriched extracts

Require additional extraction (two-step extraction) which produce azadirachtin powder

Same pests as above but more stable

Neem powder

Made of high quality dry neem kernels, sold in sealed vacuum-tight, polyethylene bags ("tea bags"), etc.

Wide spectrum of pests

1.2.3 Comparison between home-made products and commercial products

Home-made extracts and cold pressed oil based on high quality seed kernels possess excellent pesticidal properties but have the disadvantage that they are unstable and therefore cannot be stored. In addition they are laborious to prepare and are therefore only applicable and accepted by small farmers whose farms do not exceed 1-2 ha in size. Therefore there is a need for commercial neem products which have a longer shelf-life and are more stable in the field.

However, any extraction process required in the production of commercial pesticides will select some of the many active ingredients in neem, and will consequently disturb the synergistic and additive effects.