Agrochemicals

Opportunities, Trends and

Challenges

Rakesh Chitkara
Dow Chemical International Pvt Limited
 Overview

• Role of agrochemicals in agriculture

• Trends in agrochemical consumption

• Macro environment and challenges

 Major Economic Reforms…
• During mid-1991, India decided to pursue economic
reforms and liberalization
• This was significant shift from strong inward-oriented and
protective policy.
• Thus creating environment for vibrant economy, efficient
industry and better export performance
• Indian industry to become internationaly competitive.
• Strike at the main cause for India’s high-cost, low-quality
industrial structure
 Results of Reforms….

• Acceleration in GDP growth – current at

7.5-8%
• Better export performance, coverage of
imports by exports
• Argue for greater liberalization
• Reforms have been irreversible – though
pace has been different
India – Agricultural
Economy…..
Year GDP Growth of Agri
% Sect %

1996-97 7.8 9.6

1997-98 4.8 -2.4
2002-03 4.0 - 5.2

2003-04 8.2 9.1

Contribution of agriculture sector is essential to for

sustainable GDP growth
India – Agricultural Economy…..
• Indian economy has strong agriculture base.
• 60% of the population is directly or indirectly dependent on
agriculture
• Over 141 mm Hac of the total area is under cultivation and total
production is 212 mm tones
• Population is likely to grow to over 120 crores in next 5 years. A
big challenge to produce sufficient food to sustain growing
population.
• Variables in enhancing production :
• Bring additional area under cultivation (??)
• Improve productivity per unit of existing area (better quality
inputs and their optimum utilization etc)
• Reduce / Minimize pre and post harvest crop losses –
Agrochemicals
• Other policy related issues (credit / insurance / diversification /
infrastructure / market reforms / support prices etc)
 Role of
agrochemicals……
• Agrochemicals have been contributing to increased
production of food and non food crop by reducing pre
and post harvest losses.

• Complete ban on pesticides use in agriculture

might result in 50% reduction in global food
production and 4 to5times increase in food
prices.” (Nobel Laureate Norman Borlaug). Can we afford this?

• Study conducted by National Council

of Applied Economic Research in 1967
showed that
Rs.1 invested in pesticides returned Rs. 3
due to crop saved.
 Role of agrochemicals……

• Unfortunately authentic information is not available

on crop loss due to pest infestation

• Globally about 40% pre harvest and 10-20% post harvest

crop losses due to pests (FAO estimate)

• It was estimated that during 2000-01, in India, crop loss due

to pests were about Rs. 60,000 crores despite plant

protection measure.

• These losses are from 25% of the treated area. No idea how
 Take away…

Sustainable growth in agriculture sector is

important to maintain our GDP growth.
Agrochemicals play important catalytic
role in reducing pre and post harvest
losses and improving productivity.
 Global Pesticide Use Pattern
(Total market : <25Bn US$)

Latin
Rest of
Americal
world
13%
10%
Asia/Pacif
ic North
25% Americal
30%

Western
Europe
22%
Use of pesticides in India is very low – Rs.4000 cr annually
Pesticide consumption : Global (kg/ha)

Country 1999-01

Costa Rica 51.46

Colombia 18.57
Korea 9.03
UK 5.26
France 5.12
Switzerland 3.52
South Africa 1.10
Brazil 1.08
Pakistan 0.59

India 0.26
Bangladesh 0.23
(FAO Statistics)
Consumption trend of pesticide groups in
India
Others
Fungicides
3%
18%

Insecticides
63%
Herbicides
16%

This is opposite to global trend

Opportunities and Challenges in Agrochemicals
Pesticide consumption : India
(g/ha)
Country 1999-01

Andhra Pradesh 302

Bihar 82
Gujarat 331
Haryana 827
Karnataka 201
Madhya Pradesh 61
Maharashtra 168
Punjab 889
Tamil Nadu 261
Uttar Pradesh 285
West Bengal 372

(FAO Statistics)
 Trends in Indian Agrochemical Market…
• Agrochemical consumption in Cotton will continue
on decline due to increased acceptance of Bt
insect resistant crops
• Regulatory pressure will impact older generation
active ingredients. There will be need to bring in
new and safer chemistries.
• Fruit & vegetables largest, followed by rice,
maize, cotton, soybean in pesticide consumption
• Herbicides largest, followed by fungicides and
then insecticides is likely to be future growth
order
Take away….

• Large section of the farmers have not been benefited

by agrochemicals in India.
• There is significant scope of growth in herbicides and
fungicides specifically as exports and domestic
consumption of fruits an vegetable grows.
• New generation, low volume molecules to
grow.
• Need to step up coordinated extension efforts to
educate farmers on judicious use of agrochemicals
 Challenges from counterfeits…
• Total agrochemical market in India is close to Rs.4000 Crores.
Approximately Rs.1200 crores worth of counterfeit or spurious
chemicals come in circulation every year.

• Ironically, those products are counterfeited which have high brand

value and/or are unique chemistry.

• This impacts unsuspecting farmer, his crop and his economics.

• This impacts Industry due to series of non performance

complaints, misbranded samples leading to legal cases.

• This impacts Government due to the loss in revenue on account of

Excise Duty, Sales Tax etc.
 Regulatory Challenges ….
1. Well equipped labs with qualified and
trained analysts
2. Unbiased and objective analysis of the
samples drawn under provisions of
Insecticide Act.
3. Uniform implementation of the Insecticide
Act across the states (Sales approvals /
combination products / Warehouse license
etc)
 Take away…
• Stringent measures and active
Government – Industry collaboration must
for fighting the challenge of counterfeits
• Collaborative approach to resolve
regulatory challenges to ensure focus on
extension and education