5. Summary and Outlook
by Peter Foerster
After more than 25 years of research and assistance in neem
projects we can state the following findings:
· In many developing
countries neem raw material is available in sufficient quantities.
· It is successfully proved that
it is possible to establish collection systems and groups who produce good
quality neem kernels in quantities which are sufficient for small-scale neem
· The alcoholic batch (one-step)
extraction technology is a comparatively simple technology which can be
successfully established even by small companies in developing countries.
· Based on alcoholic extraction
technology, the quality of neem pesticides is severely dependent on the quality
of the raw material. The quality of the seeds can be improved through training
of collectors and traders by companies and awareness organisations and must be
maintained by building up a confident working relationship between sellers and
· Analytical training for local
laboratories is required to enable permanent quality control of raw materials
· Registration of neem
pesticides in developing countries is feasible and not as complicated as is
often claimed. It is much less complicated and expensive than in the EU and
developed countries, but still a factor to consider for small companies.
· Enforcement of quality control
by designed national authorities is required (and usually missing in developing
countries) to prevent low quality neem products from spoiling the reputation of
all neem products.
· The largest constraints
on the concept of establishing small neem-processing plants in developing
countries are the distribution and marketing concepts and systems.
· Integrated Pest
Management/Integrated Crop Management concepts must also be elaborated and
disseminated. These should consider the medium-term effects of neem application
on farming systems. This needs assistance, research and upgrading by the
· Small companies need
assistance and back-stopping if they are to embark on the complicated and
diverse venture of manufacturing of neem products. Due to some unforeseeable
risks (mostly due to the climatic conditions) small entrepreneurs should be
warned not to be too euphoric and not to start a neem business without
organising the neem-processing chain and training of collector groups or
assistance from a governmental organisation or professional back-stopping.
Entrepreneurs should not expect high profits in a short time. Neem manufacturing
requires at least around 5 years development for establishing a stable system
(frequent supply of sufficient seeds of good quality, constant market demand).
· It is assumed that the total
process can be streamlined and made more efficient, especially if larger
quantities are processed.
· The price of neem products
could decrease if larger quantities were manufactured and/or by exploiting
by-products to a greater extent.
· Investment in processing units
for larger quantities could be very profitable and is necessary if the price of
neem products is to decrease.
· Currently the profit from neem
pesticides is drawn from "niche markets" which, however, could reach a
substantial volume, such as the export crops vegetables, ornamentals and fruits
and organic produce.
The processing of neem into pesticides and other agricultural
and pharmaceutical products has proved to be a profitable venture under certain
frame conditions. Due to the many benefits and merits of neem for the people,
local manufacturing and use should be promoted by the national governments on
the one hand and donor and TC organisations on the other.
The risk in obtaining appropriate raw materials, and especially
the market risks are, however, too high to be covered by small enterprises.
Governmental organisations should assist the creation of proper frame conditions
to make use of the new resource "neem" in the form of training, education,
awareness-raising, and also research.
Further research should focus on three areas:
· integration into
· development of proper
marketing and distribution concepts
development of pharmaceutical products/by-products
In many developing countries the designated national authorities
have recently taken up their work and the legal framework for proper trading and
handling of pesticides, and residue control laboratories have been set up
according to the FAO's "Code of Conduct". Enforcement activities will
significantly increase the demand for effective, selective pesticides with low
toxicity and low persistence, such as neem-based pesticides, which are suitable
for organic farming and also for IPM concepts. In addition, industrialised
countries such as the USA ("Consumer Act") and EU (harmonising pesticide
regulations and residue levels) have passed and enforced regulations.
On the other hand, the rising number of pests resistant to
broad-spectrum synthetic pesticides will even convince those farmers who do not
care about the detrimental health and environmental effects of synthetic
pesticides of neem's good pesticidal properties.
Therefore it can be expected that the market share for neem
pesticides will significantly increase in the near future provided proper
cropping, marketing and distribution concepts are worked out. Neem pesticides
from small-scale entrepreneurs will have a substantial share of the market since
home-made neem extracts are too laborious to prepare and enriched neem extracts
The increasing number of registered neem products in both
industrial and developing countries, is a convincing indication that neem
pesticides have a (growing) market.
Our grateful thanks go to the entrepreneurs Mr Dorian Rocco,
Kenya, Kun Chatri Jampa-Ngern, Thailand, Mrs Andrea Brechelt, Dominican Republic
and Copinim, Nicaragua for their confidence and cooperation in the sensitive
topic of analysing the economics of neem processing and to the German Federal
Ministry for Economic Cooperation and Development (BMZ) for financial assistance