Agrochemical Regulations in Latin-American Countries

The economy in most Latin American countries recorded a very significant growth in the last decade. The difficulties that the continent faced in the 90's have been largely overcome.

Nowadays the agrochemical sector is facing a good moment, as we see international companies investing in new registrations and looking for alliances with strong local distribution companies every day. There are many business opportunities and the ratio regulatory investment/potential market is, on a general basis, good enough for generic products.

Some Latin American countries have been affected by the slowdown of the global crisis, but still have good prospects of growth in the coming years. World Bank forecasts for 2015 a GDP-increase of 5% in Bolivia, 3% in Peru and 2.9% in Chile. There are some exceptions like Venezuela due to the political situation, where a decrease of a 5% is expected during this year.

The agriculture in Latin America represents approximately between 4% and 13% of the GDP in each respective country. In countries like Argentina, Guatemala and Bolivia agriculture represents over 10%.

In terms of agrochemical consumption, we have to consider different factors like arable surface, productivity and technology. The biggest agrochemical market in Latin America, that in fact is the biggest market worldwide, is Brazil. Apart from Brazil there are some other big markets like Argentina, Mexico, Paraguay, Colombia, Ecuador and Chile. The agrochemical market value for these markets is between 300 million USD (Ecuador) and 2,500 million USD (Argentina).

There are some medium sized markets like Peru, Costa Rica, Guatemala and Bolivia which are in some cases growing faster than other mature markets.

Latin America is cultivating and producing a wide range of crops, including ones produced in other areas of the world like cereals, citrus or vegetables, and also specific crops that Latin America countries export to the rest of the world. Sugarcane is cultivated in the humid tropics, being Brazil the first producer in the world. The production and export of bananas for some Latin American countries represent an important income. Mexico is the first exporter in the world of mango and avocado. Colombia and Brazil are in the top 3 exporters of coffee. Argentina and Brazil are the bigger producers of soybean, only after the United States.

All Latin American countries have set their own regulations to control the use and sale of agrochemical products. Each government has established the process and requirements that the industry has to fulfill.

These national regulations make the difference between countries like Brazil, Chile and Costa Rica with high regulatory barriers and countries with low barriers like Paraguay, Uruguay and Honduras.

In most of the countries the equivalence process has been implemented (Brazil, Guatemala, Argentina). The basic of the process is the same as in the European Union with a 2-stage process: chemical and toxicological equivalence. Chile is currently evaluating dossiers under chemical identity, but has published already a new regulation that considers the chemical equivalence process that might enter into force in 2016.

One of the important difficulties that overseas companies faced with technical grade registrations come up when a full dossier has to be submitted. Many Latin American countries are requesting chronic toxicological studies that in some other areas of the world are not allowed by law to be conducted by each individual registrant.

The registration process for new active substances in these markets is different to the one followed by active ingredients that already have a background in the respective Ministries.

With regard to formulated products, there is a wider range of regulations. Each country has established different requirements. Toxicological concern is a common point as well as residues. Latin American countries export their agricultural products mainly to the United States and the European Union, so the Maximum Residue Limit established for each crop are of high relevance.

Most of the countries require local efficacy trials to assure that the use of the agrochemical product is safe under the particular climate conditions of the country. In fact, some countries of the Andean Pact demand the trial in two different areas because the soil and climate varies from the coast to the forest.

One of the biggest difficulties that face international companies with the registration of formulated products is the decision on crops investment. One botrycide used in grapes in France or Spain, could have an excellent control in Ecuadorian roses. The local knowledge of crops and uses is a key point for a good investment and a good consequent marketing position.

There is an increasing concern in the area for the effect on honeybees. Some Ministries of Agriculture are now starting to require an acute toxicological study.

The Andean Community has a common regulatory process (Decision 436). Bolivia has been the last one in implementing it. However there are some movements that could lead again to national regulations in the near future.

The timings to get the registrations in Latin America, after complete information has been submitted to the authorities, varies from approximately 6 months to 5 years. In some cases several ministries are involved and in other cases, the Ministry of Agriculture has a leading role. In Colombia, 3 Ministries take part in the registration process: the Ministry of Health (INS), the Ministry of Environment (ANLA) and the Ministry of Agriculture (ICA). In Chile, by contrast, the Ministry of Agriculture is responsible for all the process (SAG).

Costa Rica, today, is facing a real difficult situation in order to authorize new registrations. The industry has been in discussions with the authorities for several years in order to modify the agrochemical regulation to speed up the process.

Latin American countries represent a good opportunity for agrochemical companies that can bring new solutions and new sources of agrochemicals. The expertise and knowledge of local people is of high importance to invest properly on registrations. From our dilated experience in those markets, a preliminary analysis of crops and diseases is a key for success. Investment in registrations is limited for all companies, whether the regulatory budget is high or low, so companies are required to make the most of their investments. In order to assure this purpose, a supranational knowledge of all Latin American markets leads to a cost saving and timing reduction.