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How to ensure sustained growth in farming
−− Therefore, domestic agrochemical market will continue to face an uneven competition unless they ramp up investment in R&D.
Dec. 30, 2019
By Rajesh Aggarwal, MD of Insecticides (India) Ltd.
After a few troubled years, the agrochemicals market is picking pace. According to estimates, the pesticide market is projected to grow at a CAGR of 8.3% during 2018-23, and reach a size of Rs 292.9 billion by 2023. As the industry grows, it also must ensure farming practices are sustainable and impart education to farmers on agrochemicals.
Growth outlook: The available arable land per capita has been steadily reducing due to increasing urbanisation, and is expected to reduce further. However, the rising population will keep food demand high.
In order to increase agricultural yield per hectare of available land, pesticides will play an important role. According to the ministry of agriculture, in the 2018-19 agricultural calendar year, farmers cultivating in 45,043 thousand hectare—65% of the total cultivated land—use either chemical or bio-pesticides, or both.
The penetration of pesticides in India is significantly lower than other major countries, which means there is room for growth. The government’s initiatives of extending credit facilities to farmers in rural areas are likely to provide a strong boost to farming, as increasing availability and low interest rates of farm loans will encourage farmers to invest in agro-inputs like seeds, machinery, pesticides to improve crop yield—that the number of sale points for pesticides across India reached a high of 2,37,083 in 2017-18 is a testimony to the fact.
Government and private initiatives to increase farmers’ awareness of pesticides is expected to empower them with the knowledge of using the right kind and amount. Combining this with tech interventions such as precision-farming will further improve the outcome.
The rising levels of pest attacks from unknown quarters have made safety of crops a concern.
According to the ministry’s estimates, the number of sale points for the distribution of pesticides is likely to be 2,00,129 in 2018-19, while the area of cultivable land using chemical or bio-pesticides or both has dropped from the 62,247 thousand hectares in 2017-18. Only educating farmers isn’t enough—companies have to boost their investment in R&D of new molecules and compounds. While most Indian companies invest 1-2% of their revenue for R&D efforts, certain MNCs invest 8-10%.
Therefore, domestic agrochemical market will continue to face an uneven competition unless they ramp up investment in R&D. It is also an effective way to forge new collaborations with global agrochemical companies. This creates an opportunity for contract manufacturing and research for Indian players as India has one of the largest pools of technically-skilled labour.
Agrochemical companies may also consider collaborating with tech companies to advance precision-farming and other approaches. As part of the farming community, the agrochemicals industry has a responsibility towards both farmers and the people.
Source: The Financial Express
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