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Biofuel production on degraded lands with tree-borne oilseeds (TBOs) is assumed to have less negative impact on the forests and food supply, and to have economic benefit for the rural poor. India has launched a national policy to encourage production of TBOs. Our aim was to determine how TBOs are produced, what kind of socio-economic roles they play in the rural economy, and to discuss whether those roles will be affected if the demand for biofuel increases. We interviewed farmers, middlemen, and refining factories in Karnataka State about the production and sale of the TBOs, Neem (Azadirachta indica) and Pongamia (Pongamia pinnata). Regarding TBO production, we found that the trees were multi-purpose and that oil extraction from seeds was one of several utilities. The trees were arranged along field boundaries, probably to avoid competition with crops, to make it easier to collect the seeds, and to avoid interfering with ploughs. Seeds were collected from the ground, mainly by women, during the no-har vest season, providing households with a small additional income. TBOs provide a minor subsistence, allowing treeless people to collect seeds from the trees held by others without charge; thus the seeds could be regarded as a common pool resource. At present, the production of TBOs at the research site seemed to have a small ecological impact, low food conflict, and certain contribution to carbon sequestration. Once TBOs gain greater value, the nature of this resource might change, becoming exclusive private property. Inter vention to promote the reproduction of TBO trees is recommended since only one household surveyed has planted TBOs in the past.

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