Neem Coated Urea
A thin oil coating that quietly fixed two problems at once
Imagine a subsidised product so cheap that people started buying it not for its intended use but to resell for a completely different purpose. That was a genuine problem with heavily subsidised urea, some of it was being diverted from farms to industrial use, where ordinary urea is also a useful raw material, or smuggled across borders where it fetched a higher price.
Neem Coated Urea is ordinary urea coated with a thin layer of neem oil before sale. The coating serves two purposes at once, it slows down the release of nitrogen into the soil, improving how efficiently the crop actually absorbs it rather than losing it to runoff, and it makes the urea distinctly less suitable for non agricultural industrial use, discouraging diversion away from farms.
India made Neem Coated Urea mandatory for all domestic urea production, turning what started as a voluntary quality improvement into the national standard, and it remains one of the simplest, lowest cost policy interventions credited with meaningfully curbing urea diversion without touching the underlying subsidy price farmers pay.