N K Aggarwal talked about MNC pesticides in India
Aug. 14, 2009
On July 1, the Delhi High Court dismissed an appeal by Syngenta India Ltd, subsidiary of the $11.6 billion Swiss agrochemical, challenging the Union agriculture ministry’s decision to grant permanent registration to Crystal Phosphates to manufacture Emamectin Benzoate (a pesticide) formulation sourced from China. Crystal Phosphates chairman N K Aggarwal explains what the outcome of the case means for his company.
What was the dispute between Syngenta and Crystal?
As original registrant of the formulation in India, Syngenta sourced the technicals from its Swiss parent and had provided critical data for three years in order to receive provisional registration. However, it wanted the agriculture ministry to ask Crystal to supply three years of ground data afresh after the expiry of its provisional registration, when we applied for a permanent registration in 2007.
Syngenta’s contention was that since the source was different, the government should not grant permanent registration without altogether fresh ground data. The appeal was, however, dismissed by the Delhi High Court on July 1. The case, Syngenta India Ltd vs Union of India, highlighted the fact that MNCs use their market monopoly to sell crucial pesticide molecules (raw materials for pesticide manufacture) at astronomical prices to Indian farmers, having first secured them against forays by Indian companies.
What made you take on Syngenta?
MNCs account for 30-40% of the Indian pesticide market. Pesticides play a key role in fighting root borers and stem borers (mainly insects) that damage coarse cereals, oilseeds and pulses. The domestic companies, about 10, account for the rest of the market.
Surprisingly, domestic pesticide companies never applied for registration of the molecules originally registered by MNCs. Unless we have new molecules, we cannot grow. We applied for provisional registration for Emamectin Benzoate in 2005. We started sourcing at cheaper rates from the world’s biggest manufacturer of the molecule: Hebei Farmachemie Trade in the Shijiazhuang in China.
How did Syngenta thwart your attempts to get a permanent registration?
Syngenta got permanent registration for the pesticide under Section 93 of the Insecticides Act and kept selling at astronomical rates to Indian farmers. When our provisional registration expired, we also applied for a permanent registration in July 2007. Syngenta argued that we had to present three years of data afresh on our produce.
Thankfully, this was shot down by authorities who said there was no provision for this under law and asked us instead to provide data from the date of expiry of provisional registration in 2007. Syngenta filed an appeal against this in the Delhi High Court. They contended the registration to Crystal on Emamectin was illegal and should be withdrawn and that we should not be allowed to import until the case was decided. They got a stay, which lasted eight months.
What are your plans now with a favourable court order?
Our plans include roping in UPL and Cheminova to market Emamectin through their distributors. We will hire about 1,000 BSc (Agriculture) graduates countrywide as field assistants to make farmers aware of the product’s efficacy. Most crucially, we will be selling it at half Syngenta’s price. We hope to cover costs in the first year by sale volumes.The launch for our produce is on August 17 in Guntur in Andhra Pradesh.
How are you challenging the monopoly of MNCs on the sale of crucial pesticide molecules in the domestic market?
Bayer, for instance, had monopoly over a crucial molecule called Imidacloprid which was sold under the brand name Confido at Rs 3,800/litre. In 2002, we got registration rights to the molecule. We sold our produce under the brand name Confidence for only Rs 700/litre.
Imidacloprid is the biggest molecule in the world to control aphids and sucking pests that attack cotton, grams, vegetables, bananas. After that success, we went for other new molecules such as Abamectin which is the key ingredient in a miticide that attacks cotton.
Syngenta was the original registrant even in that case and they were selling their produce at Rs 7,000/litre. In 2008, we registered Buprofezine which was earlier registered by Rallis. We sold the product at 30% cheaper.
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