India:New firms step into pesticide business, despite health risks

More firms are lining up to grab their shares in pesticide business, lured by increased sales of pest-control chemicals.

But entomologists warned that an increased use of toxic pesticides on crops and vegetables will deepen the risks to public health and ecological balance. They stressed the need to increase awareness among farmers and adopt integrated pest management (IPM) practices to cut the use of toxic pesticides.

Some pesticide marketers said the use of pesticides may not increase in future because of growing awareness among farmers about pesticide's negative impacts.

In the recent years, a number of firms entered the pesticide business to profit from the farmers' desire to protect their crops against pest infestation and disease, which, analysts say, account for at least 25-30 percent of crop losses every year.

These new entrants include some big firms, such as Lalteer of Multimode Group, Getco, Runner and Partex Star Group.

“We are already in seed business and preparing to enter the pesticide market because the market size is reasonably good and some companies are doing well," said KM Ali, chief executive of Partex Star Group.

The investment frenzy takes place as sales of chemical pesticides have more than doubled since 1999, buoyed by a rise in crop production, credit-based sales by firms and farmers' interest to take preventive measures to save their crops.

The ineffectiveness of adulterated pesticides against the resurgence and immunity of pests boosted demand for pesticides, mainly insecticides that account for more than 60 percent of the pesticide market.

The biggest leap was recorded in 2008 when sales of toxic chemicals rose by 29 percent to 48,690 tonnes/kilolitres and helped the domestic pesticide market climb 70 percent to Tk 1,156 crore from a year ago, according to Bangladesh Crop Protection Association (BCPA) data.

Sarwar Ahmed, managing director of Syngenta Bangladesh, linked increased sales to rising rice prices after the 2007-08 global food crisis.

“Whenever prices of farm produces go up, consumption of pesticides increases," he said. Syngenta is the market leader in the pesticides arena.

In the last two years, prices of rice, the staple that uses the bulk of pesticides, remained high keeping demand for crop-protection chemicals close to 45,000 tonnes/kilolitres. Active ingredients of pesticides are imported mainly from China and India.

MA Khair, general secretary of BCPA, said the prospects of expanding the use of chemicals on crops attract new entrepreneurs. The body awarded membership to 21 new firms in the last six months, he said.

"We can protect 32 percent of the total rice area from insect infestation, 39 percent from disease and only 16 percent against weeds. So, there is enough scope for business to expand," he said.

If all croplands come under pesticide coverage, yields will increase, Khair said.

The entry of new marketers coincides with the government's move to protect crops through biological pest control and works with farmers to make them aware of integrated pest management practices.

Smarajit Roy, assistant general manager of Runner Agro Products, said the attempt to enter pesticide business is part of the goal of business diversification of the owners of Runner Group of Companies.

"Although the government and some NGOs are focusing on IPM to protect crops, there are some pests that can not be prevented through IPM," he said.

Operators said entry of more firms in the trade increased the competition, which thus benefited the farmers.

"Prices are not increasing due to a healthy competition. Margins are not as attractive as before," said Ahmed of Syngenta.

He said business is expanding, but new entrants will require efficiency in credit management to be successful as the trade is mostly credit-based.

Syed Nurul Alam, principal scientific officer of the division of entomology of Bangladesh Agricultural Research Institute (BARI), linked the rise in sales of chemical pesticides to unavailability of their alternatives such as bio-pesticides.

"Farmers' awareness should also be raised so that they shift from chemical pesticide whenever they get an alternative and effective pest control instrument," he said.

Alam said IPM practices should be expanded to discourage the use of synthetic chemical pesticides as residual effects of some of them linger actively for two weeks.

"No vegetables should be consumed before five days have elapsed following an application of the chemicals," he said, citing that the intensity of use of toxic chemical pesticides is higher for vegetables than that of rice.