Lemongrass Can Become More Than a Crop, Can Oil Processing Give Farmers Another Income?

Farmers growing lemongrass usually earn by selling the harvested biomass. But the crop can also become a raw material for essential-oil production. An ICAR-supported farmer producer organisation in Haryana has combined lemongrass cultivation with steam distillation to create another income stream.

The model is being run by Hodal Farmers’ Producer Company in Palwal district. With technical support from ICAR-Indian Agricultural Research Institute and Central Institute of Medicinal and Aromatic Plants, the FPO has added lemongrass oil extraction to its agricultural business.

How does the model work?

The farmers grow Pragati, also known as LS48, a lemongrass cultivar selected for its oil content and quality. After harvesting, the fresh biomass is taken to a 500-litre direct steam distillation unit operated by the FPO for extracting essential oil.

According to ICAR, one batch takes around 3.5 to 4 hours. The reported oil recovery is about 0.4%, which means roughly four kilograms of oil can be obtained from one tonne of fresh lemongrass biomass under this system.

The extracted oil contains about 74–78% citral, according to ICAR. Citral is an important component used in products linked to fragrances, cosmetics and pharmaceuticals, giving the processed product a different market from the fresh crop.

The reported economics are also different from simply selling harvested biomass. ICAR says the Hodal FPO model generated ₹1.56 lakh gross income per hectare against a total cost of ₹50,178, leaving a reported net return of ₹1.06 lakh per hectare.

Why process the crop locally?

Processing near the farm can change the economics of an aromatic crop. Fresh biomass is bulky and must be transported quickly to a suitable facility. An extraction unit allows farmers to convert that biomass into a smaller, higher-value product.

This does not mean every farmer needs to buy a distillation plant. The equipment requires investment, technical knowledge, water, fuel and regular supplies of biomass. A shared facility operated by an FPO can spread these costs across several participating farmers.

The Hodal model is built around collective processing. The FPO is not only cultivating lemongrass but also running other agricultural enterprises, including mustard-oil extraction and a Custom Hiring Centre for farm machinery.

This kind of combination can make better use of an FPO’s infrastructure. Farmers can supply crops to a common processing facility while the organisation manages equipment, production, marketing and other business activities at a larger scale.

Can small farmers use the idea?

Small farmers should first check whether lemongrass suits their soil, water availability and local climate. ICAR material notes that lemongrass requires relatively little water and can provide multiple harvests, but actual production depends on local growing conditions and management.

Farmers also need to identify a buyer before expanding cultivation. Essential oil is a specialised product, so cultivation should not be based only on the assumption that oil will automatically fetch a high price.

An FPO can help solve part of this problem by aggregating production. Several farmers growing the same crop can supply enough biomass to keep a processing unit active, while the organisation can approach buyers with a larger and more consistent quantity.

For farmers considering such a model, the first calculation should be business-based. They should estimate planting material, labour, irrigation, harvesting, transport, processing, packaging and marketing costs before comparing the expected return with their existing crop.

What about the processing equipment?

Distillation technology is already available for aromatic crops. CSIR-CIMAP says its improved field distillation units can be designed for different capacities and can process crops such as lemongrass, mint, basil, vetiver and citronella.

The institute also describes mobile distillation units that can be transported to farms. Some models use spent plant material as fuel, which can reduce dependence on firewood and help make use of biomass left after distillation.

ICAR has also documented a multipurpose food-processing machine developed in Haryana that can extract juices, separate pulp and distil essential oils from crops including lemongrass. Such equipment offers another option for groups looking at several types of farm processing.

The important point is that equipment should follow the business plan, not the other way around. Farmers should first establish crop supply and market demand, then choose equipment with a suitable capacity instead of investing in machinery that remains underused.

What can farmers learn from the model?

The Hodal example shows that an aromatic crop can become part of a wider farm enterprise. Instead of depending only on raw crop sales, farmers can combine cultivation, processing and collective marketing through an organisation that manages the business.

But the reported ₹1.06 lakh net return is specific to the ICAR-supported model and should not be treated as a guaranteed return for every farmer. Prices, yields, oil recovery, labour and processing costs can change across locations and seasons.

For farmers, the bigger opportunity lies in understanding where value is created. Lemongrass is one example of a crop where processing can turn bulky biomass into a concentrated product with different buyers and uses.

Farmers interested in the model should approach their KVK, agriculture department or an FPO working with aromatic crops before planting on a large scale. Technical advice on varieties, planting, harvesting and distillation can reduce the risks of starting a new enterprise.