The Neem Project
Gujarat Narmada Valley Fertilizers and Chemicals

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Socio- Economic: Scheduled Tribes (STs) and Scheduled Castes (SCs) are the most marginalized and historically disadvantaged communities in India. As per the 2011 Census of India, SCs and STs constitute 22% of Gujarat’s population. The Neem Project targeted these vulnerable populations to alleviate their financial, educational and social hardships. Mostly they were landless labourers and a majority of them are uneducated and unskilled. Gujarat, the westernmost state of India is largely dependent on agriculture. According to International Research Journal of Agriculture and Rural Development, the most prevalent problems faced by agricultural labourers, especially women, were; • Low Wage Rate • Low Social Status • Lack of organization • Rural Indebtedness • Seasonal Labour They face financial difficulties during the post-harvest dormancy period. During this period, they don’t have any assured source of income, as is typical in seasonal employment. The neem seed collection coincides with the non-farming season in most of Gujarat which means that the landless labourers travel out with their families to far off regions in search of ad-hoc work. This seasonal migration affects the children’s education since they need to drop out of school during the migration season and affects the health and well-being of the entire family since they are uprooted from their own surroundings and often reside in harsh environments. The project specifically engages rural women in Neem seed collection. Most of the women involved in the project belong to socio-economically weaker sections of the society and are typically uneducated and/or unskilled. Traditionally they do not directly generate income in the household. They have traditionally also not been allowed much say nor authority over household expenditures and asset control. Several complex yet inter-connected institutionalized social and cultural factors have kept women particularly vulnerable to the violence directed at them. Domestic violence is a structural rather than causal problem. It is the family’s structure which leads to or legitimizes the acts that are identified as the causes of domestic violence. Diversion of Urea: In its non-agricultural applications, urea is used for dyeing, inks, coatings, plastics, paints, glues, animal feed, pesticides, and for adulterating milk. This could be attributed to the heavily subsidized urea provided to the Government of India, further aggregating the subsidy deficit. To tackle the above problems, the Honourable Prime Minister of India has undertaken the historical initiative of neem coating 100% urea. Impure Neem Oil: The mandate threw up a massive requirement of 26,000 MT of Neem Oil in the country. A market survey of Neem Oil availability and quality thereof was conducted. It was realized that traders were using spurious oil like rice bran oil and palm oil etc., topping it with Azadirachtin, and selling it as a neem oil.

B. Strategic Approach

 2. What was the solution?
The initiative undertaken- the Neem project, leveraged established community structures in rural Gujarat to build a supply chain network for neem seed collection and generating employment for around 0.225 million women generating over USD 3,730,000 supplementary income in the last two years (2015-17).

 3. How did the initiative solve the problem and improve people’s lives?
GNFC translated the policy mandate of Neem coating 100% Urea into a socio-economic opportunity for the rural poor. Instead of taking the traditional route of spraying urea with Neem oil bought from the unorganized sector, GNFC rolled out the innovative, integrated and community-led socially transformative Neem Project to meet its Neem oil requirement. The uniqueness of the project lies in meeting a policy mandate with innovation and foresight, wherein the rural poor especially women were involved in Neem fruit collection to generate employment and income. The socio-economic footprint of the Neem Project has been independently verified by an impact assessment study conducted by UNDP in November 2016. The study results testify that the project aligns well with the UN’s Sustainable Development Goals, especially 1, 2, 3, 4, 5, 8, and 15. It reveals that the project has led to a 58% increase in average income of rural women, and that women exercise greater control over their financial assets and investments. The study also indicates that almost 77% of those involved belong to vulnerable communities. Many reported alleviation of domestic violence and stated that they now exert greater agency in household matters. It was confirmed that there has been increased value creation through health, clothing, and education becoming predominant areas of expenditure, reduction in seasonal migration due to employment generation in the non-farming season and increase in the number of women entrepreneurs. The benefits of Neem are numerous and well-known, and Neem coated Urea is a positive step towards organic and sustainable farming. It also saves Rs 13.5 per bag for farmers. Famers also benefit from pesticide and insecticide characteristics of Neem coated Urea, hence its usage is encouraged by increasing its availability. The project has reached a significant population of 225 thousand landless labourers and rural women from 22 districts, across 4000 villages, in the last two years. Over INR 25 Crore (Approximately USD3.7 million) supplementary income has been generated, and indirect employment for 75,000 more people was also created. The Neem Project is currently active with over 2200 Self Help Groups, Milk Cooperative Societies, Pani Samities (Water Committees), and Forest Department Collection Centres, who act as collection centers and have been resourceful in collecting over 22,000 MT of Neem seeds. With strong focus on being inclusive and participatory, GNFC has with participation from the seed collectors engaged in the project, mapped village spaces to establish seed collection centers at convenient locations. These collection centers are equipped with weighing meters and collection bags by the company. Additionally, a transparent and well-organized system for buying neem fruits at a fair price has been developed and the pricing is displayed prominently at the centers. The seeds collected are processed to get Neem cake and extract Neem oil which is further used for coating over Urea. As a testament to the efficiency of the supply chain established, the company has been producing surplus Neem oil, which is now being used in manufacturing of Neem soaps, Neem oil for toilette, Neem repellents, Neem facewashs, and Neem pesticides. The forward integration model converges with the government’s mission to impart skill training to unskilled rural poor women. It has trained women from Self Help Groups from the Bharuch district in end-to-end soap making. These women are now running the soap manufacturing in a soap plant set up by GNFC for additional income. Due to the Neem Project, the price of neem seeds increased from an average of INR 2 to 12 per kg. The use of neem-coated urea could save the government Rs 6,500 crore in subsidy annually.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
The Neem Project is the first-of-its-kind initiative as its unique aspect is, inspite of its strong socio-economic focus, it moves away from the beneficiary model to participatory model. It harnesses existing community structures to build a supply-chain model to generate income for women and the rural poor, leading to empowerment. It is both a viable and transformative business model for meeting the policy mandate of 100% Neem coating of Urea. The Neem Project emerged as a significant Rural Income Generating Activity (RIGA), as it brings steady income for two months during the dormancy period, thus mitigating migration. There is zero investment involved and the time schedules during the day when women want to collect seeds is controlled by them which gives them greater autonomy. At pre-determined prices, the collection was sold at Village Level Collection Centers (VLCCs) and were paid immediately. Coming from financially weaker families, for quite a few women, this is the first time they have earned money and exerted any control over finances. In addition, it has also turned a hitherto waste product to raw material for a viable business.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The Neem Project is currently active in 22 districts of Gujarat across 4000 villages, with an established network comprising of 2200 collection centers and an estimated collection of 22,000 MT of Neem seeds in the last two years. More than INR 25 crore income has been generated for 2.25 lakh women. An additional 75,000 has benefitted from indirect employment through its backward integration. Information about the beneficiaries as per the UNDP Study is given below; Age Majority of the neem seed collectors are women above 30 years of age. Around 70 percent women engaged in this work are in the age group of 40-55 years. A small but significant one percent, - 29 beneficiaries - is made up of adolescent girls (15-19 years old). Social Category Data shows that 43.7 percent beneficiaries involved in this work belong to the social category of Other Backward Classes (OBCs), 18.3 percent to Scheduled Castes (SCs), 14.9 percent Scheduled Tribes (STs) and 23.1 percent others. The fact that around 35 percent women beneficiaries belong to SC/ST category shows that there is an upward change in the involvement of women to earn equivalent to the other community. Education Analysis of the educational status of women beneficiaries show 42.85 percent women are literate, i.e., they can sign on their own, whereas 44.43 percent are functional literate who can calculate simple arithmetic but cannot read or write. Only 7.55 percent and 5.17 percent women are primary and high school educated respectively. Land Ownership Data shows that 82.8 percent women are landless, 4.3 percent possess marginal land where as 8.7 percent, 3.2 percent and 1 percent are having small, medium and large land respectively. The majority of the women beneficiaries involved in the neem seed collection belong to the landless category. Income and livelihood expenses Data shows that annual income per family ranges from Rs. 8000/- to 85000/-. Majority of the earnings come from agricultural labour. Only 12 percent families get supplementary income from livestock, trading and other livelihood activities. Around 70 percent of their income is spent on food, whereas anywhere between 5 to 15 percent is used towards clothing, education and health. The remaining 10-15 percent is used for miscellaneous activities such as construction, social activities, etc. Living Arrangement It has been seen that 93.4 percent women possess a kutcha-pucca house whereas 6.6 percent stay in a rented house. Pucca housing (or pukka) refers to dwellings that are designed to be solid and permanent. It is built of substantial material such as stone, brick, cement, concrete, or timber. The term pucca means "solid" and "permanent". Majority of these houses are passed down generation after generation. Satisfaction As far as satisfaction in their current livelihood is concerned, a majority (90.6 percent) said that there is no other way to make a living except by working as labourers, as they belong to poor families and do not have any land or educational background. Around 8.1 percent women shared that they would change their life style if they get an opportunity and 1.3 percent women said that they have no idea about this prospect.
 6. How was the strategy implemented and what resources were mobilized?
Sourcing: GNFC took the decision to tap into Neem trees in the state and rolled out The Neem Project. It then began a backward integration process aimed at empowering marginalised communities, and the rural poor. It laid targeted focus on women empowerment by aiding income generation and improving their livelihood prospects. GNFC involved the rural poor, mostly women landless labourers in seed collection. These seeds are typically either swept away into garbage bins or they are left unattended. This waste material became its source of Neem seeds. The collectors would sell the seeds at nearby VLCC, and get the payment immediately. These seeds would then be transported to Service Provider Partners (SPPs) who would store it till they finally get delivered to GNFC’s Neem oil extraction units. To set up the sourcing process, it approached existing rural community structures run mostly by women such as Self Help Groups, Milk cooperative societies, Sakhi Mandals, Pani Samities, and Forest Department Collection Centres, explaining the process and economics of neem seed collection. The goal was to initiate community-led transformation. The women who volunteered to be part of the project would have to collect Neem seeds as per their convenience and sell them at pre-determined prices at VLCCs set up in their village. This was part of GNFC’s plan to set up an integrational supply chain for seed collection and oil extraction. The goal was to have a functional supply-chain set up by May, which is when the tree starts shedding fruits from which the oil is extracted. Seeds are shed till Monsoons hit the state which is generally around July. Collectors are paid cash in hand upon delivering the seeds collected during the day at the VLCC, after the seeds are weighed in front of them and according to the weight-cost chart that is put up in public view within the VLCC premises. VLCCs are responsible for generating awareness about the project, training the seed collectors on ways to avoid foreign particles during the collection process, and sets up suitable collection centres. It arranges for C Class jute bags for the collection of Neem seeds and transports it to Service Provider Partners (SPPs) Storage and Supply chain with GNFC: The Service Provider Partner (SPP) is expected to unload and carry out screening, weighing, bagging, storage and drying of the seeds received from the VLCC. SPP properly handles and rotates the Neem seed bags during the storage for drying and arranges for the transportation of Neem seeds to Expeller/Extraction unit (Miller) or intermediate storage arranged by GNFC. SPPs can also accept Neem seeds directly from the individual collectors and follow the procedure prescribed for VLCCs. SPPs then provide the collection report to GNFC on a weekly basis for the payment made by them to VLCC and individual collectors, subsequently GNFC makes the payments to SPP. Extraction and Ensuring Quality Control: Neem seeds are processed at local expeller/extraction units giving boost to their capacity utilisation, thereby generating additional income and employment locally. Through processing Neem seeds, Neem oil and De-oiled Neem Cakes (DOC) are produced. Proper checks and balances are ensured right from the collection to extraction process through awareness and capacity development programs conducted for those handling these processes; and through close monitoring by GNFC officials. Regular trainings are conducted for VLCCs, SPPs, Collectors, and expeller units. The Neem Project participates actively in ‘Krishi Mahotsavs’ (agricultural extensions), 500 events including four mega events to generate awareness. It also advertises and organizes meetings extensively. GNFC is targeting one million neem tree plantation through its associates to promote social forestry and helping environmental protection.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Hon’ble Prime Minister of India, Shri Narendra Modi during his speech on the 69th Independence Day celebration, delineated his vision of 100% Neem coating of Urea. The Ministry of Chemicals and Fertilizers, Government of India in the year 2015 made it mandatory for all indigenous producers of urea to produce 100% of their total production of Neem coated urea. Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC) has taken a lead in implementing the policy mandate under the Neem Project. GNFC is a listed company, promoted by the Government of Gujarat (GoG). It is headed by a senior officer from the Indian Administrative Services, Dr. Rajiv Kumar Gupta and is overseen by a government appointed Board of Directors. The Neem Project has been conceived and managed by Dr. Gupta and is being implemented by GNFC officials. To set up the sourcing process, it approached existing rural community structures run mostly by women such as Self Help Groups, Milk cooperative societies, Sakhi Mandals, Pani Samities, and Forest Department Collection Centres, explaining the process and economics of neem seed collection. Collectors are paid cash in hand upon delivering the seeds collected during the day at the Village Level Collection Center (VLCC). The list is as follows; SHGs – 1200 Milk Cooperative Societies – 50 Pani Samities – 50 Forest Department Collection Centres – 500 Gujarat Agro Industries Corporation Limited – 400 Total – 2200 VLCCs are responsible for generating awareness about the project, training the seed collectors on ways to avoid foreign particles during the collection process, and sets up suitable collection centres. It arranges for C Class jute bags for the collection of Neem seeds and coordinates with Service Provider Partners (SPPs). It collects cash from SPPs to remunerate the seed collectors within seven days.

 8. What were the most successful outputs and why was the initiative effective?
The initiative improved people’s lives, especially women’s by responding to their needs and enhancing their rights. It fulfilled the financial needs of many rural women by increasing their annual income by 58%, in a short span of 45 days. The SDG 8 of ‘Decent Work and Economic Growth’ was fulfilled as the Neem Project provided sustained, inclusive and sustainable economic growth through productive employment which filled a gap in the seasonal employment of the landless labourers. The project initiated economic development and broke the vicious cycle of poverty as seen in the exponential increase in asset creation. This lead to reduced income inequalities and also of gender. The reduction in domestic violence, the increase in decision making power of women and increase in expenditure for education, especially girl child’s education is heartening news, especially for SDG 5, i.e., Gender equality. Education, touted to be ultimate weapon for empowerment has been paved the way by the Neem Project. Apart from its socio-economic footprint, Neem Project should be applauded for aligning itself with the environmental SDGs of Climate Action and Life on Land, 13 and 15 respectively. The benefits of Neem is numerous and well-known, and Neem coated Urea is a positive step towards organic and sustainable farming. It could be said that through this neem revolution that India is returning to its roots and using the wisdom of its ancestors to alleviate the modern troubles brought on by the vacuous adoption of the western industrialisation. To sum up, the Neem Project caters to the needs of the poorest and most vulnerable, and alleviates the ever-growing inequalities in accordance with SDG 10. Neem Project empowers and promotes the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, or religion. To do so, it targets the most disadvantaged as per the Indian constitution i.e., the ‘Scheduled Tribes’, ‘Scheduled Caste’ and ‘Backward Communities’, who make up 77% of the project beneficiaries. Above all, Neem Project is innovative and sustainable as it fully integrated into the company’s supply chain which results in Shared value Creation. As the SDG 9 mandates, it promotes inclusive and sustainable formalisation of unorganised markets and significantly raises industry’s share of employment and gross domestic product, in line with national circumstances. By aligning and fulfilling itself with the UN’s SDGs, it alleviates the problems of the present and anticipates the needs of the future.

 9. What were the main obstacles encountered and how were they overcome?
The major challenges during each phase is outlined below; Sourcing: GNFC had to begin from scratch and set up the entire supply chain from sourcing of Neem seeds to extraction of Neem oil between the end of January 2015, and the beginning of June 2015, when the Neem seeds start shedding. Neem seed collection lasts between 45 days to 60 days, from May till Monsoons. This is the only time when the Neem seeds can be collected, since the seeds from which oil is extracted need to be shed naturally. This implies that the entire sourcing and collection machinery has to be finely timed and managed to ensure that the right quantity and quality are sourced. Another challenge was to ensure transparency and fair pricing for the neem seeds bought to maintain inclusive growth and ethical sourcing practices. Storage: The small window of seed collection period necessitates efficient linkages, processes and systems in place in terms of seed storage. The collected Neem Seeds would have to be stored in the VLCCs and transported further to SPPs. Neem seeds are volatile and can combust if not kept in open and airy spaces. The right storage facilities had to be set up across the state along with efficient linkages between all the levels of the supply chain. In the first year of operations, the storage facility and linkages had to be set up right from the beginning while minimising leakages and wastage. Extraction and Ensuring Quality Control: Neem seeds are processed in local expeller/extraction units. A challenge here was to ensure that these units would have optimal capacity to operate. Secondly, since most of the stakeholders within this supply chain were operating within this business model for the first time, there were capacity deficit concerns in quality seed collection, storage and extraction.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
The following impacts were measured by the UNDP Impact Assessment. Further details about the measurement indicators used is given in Question 12.  MICRO-LEVEL: Women Empowerment 1. Asset Creation There is a remarkable increase in livestock asset ownership, due to the income from neem seed collection. As many as 336 beneficiaries purchased livestock such as buffalo, goat and hen from the additional earning. Increased decision making Around 18.6 percent beneficiaries were empowered to take decisions in matters like marriage, education, health and property. Many took control of the household expenditure and the apparent change in pattern is observed as indicated in the previous chapters. 2. Decreased Domestic Violence Several women (12.8 percent) communicated their happiness regarding the reduction of domestic violence in their life after joining neem seed collection project. Many attributed it to reduced financial difficulties and increased control over their earnings. Financial Empowerment 1. Psychological effects The average income of women in a year was Rs. 12000/-. The average income from neem seed collection is Rs. 7000/-, which increase the annual income to Rs.19, 000/-. There is an increase of 58.3% in income per annum. 2. Utilisation of income Majority of the women reported that the income earned from neem seed collection is spent on food, health and education. While 70 percent of their income is used for food, the remaining 30% is used for health, education and other amenities.  MESO-LEVEL Community Empowerment 1. Increase in price of neem seeds: The price of neem seeds increased from an average of INR 2 to 12 per kg. 2. Reduction in Seasonal Migration: As most of the women are engaged mainly in agricultural labour they tend to migrate to other places in search of work during off season to earn their bread and butter. This migration has nearly stopped for those involved in this project due to good earnings. 3. Decrease in loans: Women who do not or could not migrate to other places, tend to mortgage their belongings and borrow money from money lenders at high interest rate. But this year, it has decreased due to the income from neem seed collection. For many, it was a hard choice between spatial instability and a financial one. Neem Project was the much required alternate choice for many.  MACRO-LEVEL Economic Benefits: The use of neem-coated urea could save the government Rs 6,500 crore in subsidy annually. It also saves Rs 13.5 per bag for farmers. Environmental Benefits: Apart from the prevention of diversion, the environmental benefits are numerous. Farmers use conventional urea, about half the applied nitrogen is not assimilated by the plant and leaches into the soil, causing extensive groundwater contamination. Spraying urea with neem oil slows the release of nitrogen by about 10 to 15 percent, concomitantly reducing consumption of the fertilizer. According to recent research, the "sustained release" nature of neem-coated urea has seen rice yields jump 9.6 percent and wheat by 6.9 percent. Neem coated urea also works as insecticide.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Due to the efforts of GNFC and the success of the Neem Project, Government of India has mandated that all Urea companies to purchase Neem oil only from genuine producers and not from traders. By inhibiting the nefarious practices of traders, the business system was optimized. This is largely due to the alternate path paved through Neem Project of GNFC. Ministry of Fertilizers has also mandated all fertilizer companies to follow suit and GNFC is handholding them to replicate the Neem Project. The innovation, in addition to adopting a business model which generates steady and significant income for the rural poor and empowering them through boosted livelihood opportunities, lies in the linkages that the project has adopted. The sourcing process, built on existing rural community structures run mostly by women such as Milk cooperative societies, Sakhi Mandals, Pani Samities, and Forest Department Collection Centres, streamlined the process and economics of neem seed collection. The supply chain logistics of the Neem Project is robust and transparent. Its philosophy is accurate weighing, fair price. The collected seeds are sold at the counters using a digital weighing machine and a moisture meter. The using of these two technologies ensures that the collectors get a fair price and that the seeds are being brought in a transparent manner. These seeds bought by GNFC are then transported and stored at the company’s own storage sheds where accurate and technical storage practices are followed including the use of C class jute bags and frequent airing and drying of seeds. The seeds are packed in standardized ways of 50 kilo bagging to curb any pilferage. Once the end-product is delivered, the payment is made online in keeping with the company’s focus on maintaining transparency.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
The entire initiative was undertaken to empower women and girls, through livelihood generation. For quite a few women, this is the first time they have earned money and exerted any control over finances. This brings a certain level of confidence, decision-making powers and agency. From one village to the next, inspite of their cultural differences, a sense of empowerment and financial control emerges like the leitmotif. Women in tribal areas of Umarpada and Mandvi region which are patriarchal in nature, did not handover their income to their husbands. They handled all expenditures themselves. Adolescent girls from communities which work primarily as landless labourers, to women from low-income rural households, speak about keeping all or some money away to pursue a personal aspiration, such as paying for their children’s school fees, buying a particular kind of food to send to relatives to buying jewellery or clothes. Steps undertaken to promote participation of women; 1. Women Self Help Groups were involved. 2. The timings of the collection centers were set as per the convenience of the homemakers. 3. Conducted awareness meeting among other women groups. 4. Planning to provide them with ID card, as recommended by UNDP, to give them professional identity.

Contact Information

Institution Name:   Gujarat Narmada Valley Fertilizers and Chemicals
Institution Type:   Public Agency  
Contact Person:   Rajiv Kumar Gupta
Title:   Managing Director  
Telephone/ Fax:   +919978406054
Institution's / Project's Website:  
E-mail:   md@gnfc.in  
Address:   PO Narmadanagar,
Postal Code:   392015
City:   Bharuch
State/Province:   Gujarat
Country:  

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