Economic Impact of Neem Coated Urea on Indian Agriculture: Evidence from a Benchmark Study

Abstract The policy of mandatory production and distribution of Neem Coated Urea (NCU) from May 2015, with a focussed attention on improving the soil quality through a judicious use of fertilizers seems to be in the right direction, considering the benefits realized so far by the Indian farming community. In this article, authors have made an attempt to explore the benefits recognized by the producers of six major crops such as paddy, maize, sugarcane, tur, jute and soybean across the six major states viz., Karnataka, Maharashtra, Madhya Pradesh, Bihar, Punjab and Assam with 2200 sample households. The reference period of the study was the immediate season (Kharif 2015) post the NCU production. The results reveal that NCU use has contributed positively in terms of increasing the yield levels of both main product and by-products with regard to almost all the reference crops under study. However, the extent varies from crop to crop, highest being in the case of soybean, followed by tur, maize, sugarcane, paddy and jute. While the net returns are highest in respect of tur, followed by paddy. As regards B:C ratio, tur tops the list subsequent to sugarcane, paddy, soybean, maize and jute. Moreover, NCU has helped reduce the cost of production by minimizing the cost of urea as well as of other fertilizers and pesticides usage. Interestingly, the diversion of urea has stopped completely, post the production and distribution of NCU. Hence, it is concluded that the application of NCU has a positive impact on Indian agriculture, by way of increasing yield levels & returns for the farming community. These results are in line with the PM's vision of doubling farmers’ income by 2022 and Sustainable Development Goals of the Country.