The Indian Agrochemicals industry is dominated by insecticides which contribute to 60 percent of the overall demand. Efficient usage of crop protection solutions are the need of the hour. MOHD MUSTAQUIM analyses the challenges which need to be addressed on priority for the sustainability and growth of agriculture sector.
In the next decade, the sustainability of agriculture is the biggest challenge. Farmers can continue farming only if it becomes profitable. Otherwise, the farming community will lose their interest. There is a need to ensure proper yield.
Broadly, yield enhancement is the main challenge. Although yield per hectare has doubled in the past years, Indian agriculture is still grappling with challenges like high monsoon dependency, unpredictable weather patterns, reduction in arable land, low per hectare yield, increase in pest attacks among various other localised factors. There are good emerging trends and solutions for sustainable crop protection which include crop protection chemicals, agronomy, fertigation, seed treatment, biotechnology development among technological interventions.
According to agriculture experts, the next generation agriculture in the country will have to encompass all such possible solutions using the best mode in a given scenario. The sector faces many challenges and solution to same can lead to India becoming a global manufacturing hub of quality crop protection chemicals including insecticides.
India is the fourth largest global producer of agrochemicals after the US, Japan and China. This segment generated a value of USD 4.4 billion in FY15 and is expected to grow at 7.5 percent per annum to reach USD 6.3 billion by FY20. According to a Tata Strategic Management Group-FICCI Report, approximately 50 percent of the demand comes from domestic consumers and the rest from exports. During the same period, the domestic demand is expected to grow at 6.5 percent per annum and exports at 9 percent per annum.
The industry is dominated by insecticides which contribute to 60 percent of the overall demand, followed by fungicides and herbicides which account for 18 percent and 16 percent of the demand respectively.
Efficient usage of crop protection products and solutions for Indian agriculture are the need of the hour. In order to realise the true potential, Industry, Government and Regulatory bodies need to work in tandem and embrace digital technologies to further improve farmer connect.
Indian crop protection market is supported by strong growth drivers. Current consumption of crop protection products in India at 0.6 kg/ha, is much lower than the world average of 3 kg/ha. This offers immense opportunities for future growth.
Highlighting the vital role of crop protection of of agrochemicals, Rajesh Aggarwal, MD, Insecticides India says, “Between 20-50 percent yield enhancement is done by agrochemicals and other farm input industries. Weed control, pest and disease are very very important for the farmers’ fields. If there is pest infestation and it is not controlled, the farmer would suffer and won’t get good yield, decreasing their income. The farmers have to treat their crop like their children.”
Research & Development Challenges
R&D is believed to be very very expensive. Indian companies spend only 1-2 percent of their revenues in Research and Development as against the global multinational companies which invest about 8-10 percent of their revenues. This makes Indian manufacturers uncompetitive globally in specialty molecules.
Invention of new agrochemical product takes about 8-10 years with an expenditure of more than a billion dollar. “We, in India, do not have a mindset to discover a new agrochemical molecule. Generally, people are investing at all due to low profitability, low risk taking appetite. These are the basic reason for not flourishing even the basic R&D in agrochemicals industry,” says Aggarwal.
In India, most of the R&D is done in the new formulation development and reverse engineering. It means, whatever products are patented in the world are being developed in India and the country is becoming a generic market. Though, India is the forth largest producer of agrochemicals, but at the same time the country is at number 14 in terms of value. The entrepreneur is doing business without any support of technology and information on R&D. Whatever, the industry is doing, is doing by themselves only. This is the big weakness in India unlike any developed countries where the governments work hand in hand with the entrepreneurs.
Stringent environmental regulations across the world are increasing the cost of developing new products and simultaneously delaying the introduction of new products in the market. For instance, in the European, Union any agrochemical product if found to be mutagenic, carcinogenic or classified as an endocrine disruptor would not achieve registration or re-registration irrespective of the level of exposure generated.
Indian insecticide and pesticide industries have capabilities. There should not be restrictions on off-patented molecules to manufacture in India. That is one way, farmers can be served well. Today, even after the expiry of the the patent, there are benefits given to certain companies to control the molecules. In a result, the farmers are getting the expensive products. If the market is competitive, farmers will get products in lower prices, so that type of regulatory changes need to be made.
According to industry estimates the spurious crop protection products accounted for more than 40 percent of the pesticides sold in India in FY14. These products are inferior formulations which are unable to kill the pests or kill them efficiently. They also result in by-products which may significantly harm the soil and environment. Making farmers able to differentiate genuine and non-genuine products is a big challenge as literacy rate is very low among them. Awareness campaigns should be in local languages. The farmers should get the right product.
In Andhra Pardesh, there were 80 biological pesticide samples tested and according to a report, all were counterfeit products, made from the combination of agrochemicals. “South India has become a hub for developing counterfeit pesticides.
Initiatives like use of hallmarks and hologram would help. Though distributors and retailers are made aware to identify products, but it still a challenge with the farmers,” Aggarwal says. Companies should engage in awareness activities so that farmers get the genuine products.
It is also a fact that if a big market is shared by counterfeit products, it cannot happen without the connivance of the authorities. Not the all level, but at certain level there may be a nexus. This nexus must be finished and role of local administration is critical in curbing the sale of large scale fake products.
The Way Forward
FY15 had been a challenging year for crop protection chemicals market in India as well as throughout the world. Weak rainfall, droughts, decline in the commodity prices, and currency devaluation in several countries had affected the growth of crop protection chemicals market. At present, per hectare consumption of pesticides in India is amongst the lowest in the world and stands at 0.6 kg/ha against 5-7 kg/ha in the UK and 13 kg/ha in China. With the increase in awareness and market penetration, consumption is likely to improve in the near future. Still there are challenges like spurious products, low focus on R&D by domestic manufacturers, inefficiencies in the supply chain etc. which need to be addressed on priority.
In addition to the use of crop protection chemicals, Indian agriculture needs to focus on specific solutions to enhance crop productivity. It is imperative for farmers to adopt efficient agronomy practices, fertigation, seed treatment, biotechnology and plasticulture to reduce wastage and attain self-sufficiency in agricultural output. Integrated pest management is one of the most effective and sustainable ways of tackling the issue of pests and diseases in Indian agriculture.
This year a lot of rain happened in most part of the country, and it would bring big benefits for the industry. It would have positive impact in the next season too. And thus, agrochemical industry will definitely get benefited from the good monsoon.