Crop protection is the general method or the practice of protecting the crop yields from different agents including pests, weeds, plant diseases, and other organisms that cause damage to the agricultural crops. Apart from crops, agricultural fields would have weeds, small animals like rats, mites, insects, pests, disease-causing pathogens and frequently raided by birds.
India’s crop protection industry is going to be worth $6.3bn by 2020. Indian crop protection industry is estimated to grow by 7.5 per cent per annum. Indian crop protection Industry was estimated at $4.4 billion in Financial Year 2014-15 of which 47 per cent are exports. The industry is dominated by insecticides which contribute to 60 per cent of the overall demand, followed by fungicides and herbicides which account for 18 per cent and 16 per cent of the demand respectively.
Indian crop protection industry growth per annum
Globally, on average, every year farmers lose 20 to 30 (%) of their cultivated crops due to pests and other diseases. In order to reduce these losses, crop protection is much more required. There are different types of Crop Protection products available in the market and are eco-friendly or environment-friendly products which help in preserving the environment and also protect the crops. These products include – Fungicides, Herbicides, Insecticides and Seed care.
On the global front, crop protection chemicals sales in almost all the regions declined in 2015, with the sharpest falls occurring in Europe and Latin America. Weakening herbicide prices, varying weather including the El Nino phenomenon and weak rainfalls caused a slump in sales. One of the worst droughts was encountered in parts of Brazil and USA. Moreover, commodity prices declined worldwide, making it imperative for farmers to moderate costs. Currencies weakened against the US Dollar in several countries. Crop protection chemical purchases were postponed or not done as a result of which companies had to grapple with high inventories. As a result, exports from India increased marginally by around 2.5% in Financial Year 2015.
Financial Year 2015 had been a challenging year for crop protection chemicals market in India as well as throughout the world. Weak rainfall/droughts, severe decline in the commodity prices, and currency devaluation in several countries have affected the growth of crop protection chemicals market. The impact of these factors is likely to weigh on the sector for few more years. Indian agrochemicals market will be driven by growth in herbicides and fungicides, increasing awareness towards judicious use of agrochemicals, contract manufacturing and export opportunities. 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 around 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 non-genuine products, low focus on R&D by domestic manufacturers, inefficiencies in the supply chain etc. which need to be addressed on priority.
Crop protection has tremendously improved in the last 50 years and will continue to do so. The chemical synthesis will remain the most important source for new active ingredients. Natural products will not per se play a dominant role in the near future.
Financial Year 2015 has been a challenging year for crop protection chemicals market in India as well as throughout the world. As per Economic survey of India, agriculture sector had grown by 1.1% in Financial Year 2015. The country faced weak monsoons with rainfall falling 12% short of expectations. A number of states were affected due to drought like conditions especially during the Kharif season. Financial Year 2015 had been a stagnant year for Indian Crop protection industry which experienced a marginal growth of 2%. Increased farm production will translate into a better demand for crop protection chemicals. Input prices for crop protection chemical companies are likely to remain subdued in the near future which will impact selling prices for farmers. Due to this, the market could grow in volume terms, but in value terms, growth would be moderate. The long term drivers like increasing population, current low capita consumption of pesticides, decreasing arable land, focus on productivity and increasing purchasing power would continue to remain intact and will drive the global crop protection market.
Every year in India pests and diseases eat away on an average 15-25% of food produced by the farmers. Due to the rising population and decreasing arable land, demand for food grains is increasing at a faster pace when compared to its production. This therefore necessitates putting more thrust on crop productivity enhancement as well as crop protection methods. Use of crop protection chemicals can increase crop productivity by 25-50%, by mitigating crop loss due to pest attacks. Thus, crop protection chemicals are also very essential to ensure food and
In the recent years, the need to increase food production to meet the demands of rapidly increasing population from a limited land resource necessitated the use of intensive farming systems, with the inputs like narrow genetic base, high dose of fertilizers, pesticides, irrigation, monocropping, etc. which led to the development of diseases and pest. The effect of changing global climate, particularly the sharp increase in CO2 concentration, has increased the susceptibility of plants to pathogens and pests. Because of the chemicalization of agriculture, the age-old eco-friendly pest management practices like sanitation, crop rotation, mixed cropping, adjustment of date of planting, fallowing, summer ploughing, green manuring, composting, etc. are not being practiced, affecting the crops adversely.
This has encouraged researchers to look for eco-friendly and novel approaches for pest management. The information on recent advances in crop protection (involving bacteria, fungi, nematodes, insects, mites and weeds) is scattered.
Contract Manufacturing and Export Opportunities:
The export of pesticides from India has seen a strong growth over the last few years. Globally, India is the thirteenth largest exporter of pesticides. Most of the exports are off-patent products. The major exports from India happen to Brazil, USA, France and Netherlands. The key growth drivers are India’s capability in low cost manufacturing, availability of technically trained manpower, seasonal domestic demand, overcapacity, better price realization globally and strong presence in generic pesticide manufacturing (India has process technologies for more than 60 generic molecules). Due to the reasons mentioned above, India offers good scope for contract manufacturing as well. Post tsunami, Japanese companies are trying to build manufacturing capacities outside Japan to de-risk themselves. The Japanese companies are very particular about confidentiality and intellectual property protection and some of them have seen opportunity in India and are now creating a base here. The deal between Sumitomo and Excel Crop Care is a recent example. More such deals are possible in the coming years as it will give Indian companies the access to technology which they need and the global MNC’s a fast track entry into the country.
Agrochemicals worth USD 4.1 billion are expected to go off-patent by 2020. This provides significant export opportunities for Indian companies which have expertise in generic segment. Top 6 importing nations constitute only 44% of India’s agrochemical exports. This also indicates export potential for Indian companies. In order to build a strong export base, companies could set up marketing offices in association with domestic players in export geographies. Companies could also look for strategic alliances with local companies to expand their marketing and distribution reach. Merger and acquisition opportunities could also be explored to increase their global presence.