Lime has two effects on soil. First, it neutralizes acidity. Second, it may be a slow-acting alternative or a complement to gypsum in the treatment of sodic, dispersive clay soil.
It raises the pH of soil, i.e. makes it less acidic. Lime is added to "sweeten" the soil. In areas where the soil is sandy, lime is often added to make the soil less acidic for crops like corn and...