An agrochemical is any chemical used in agricultural production to improve productivity and control the spread of pests and diseases. Agrochemicals include fertilizers, pesticides, adjuvants, and plant regulators. Agrochemicals help reduce crop loss by protecting crops against disease-causing pathogens, increasing crop yield, and maintaining yield quality. Agrochemicals also reduce other added costs, such as labor and fuel, lowering agricultural commodity prices.
Agrochemicals mainly include pesticides and fertilizers. These chemical agents are widely used in the agricultural industry to protect crops from diseases and pests, enhance soil quality, and improve the yields of agricultural plants. With the help of agrochemical products, farmers can grow more crops on less land, reducing production costs. As a result, the final products are cheaper for the consumer. Other driving factors, such as the supportive policy provided by the government and consistent investments in developing new agrochemicals that are more effective and eco-friendlier, are expected to further boost the growth of the global agrochemicals market during the forecast period. However, the massive use of pesticides and fertilizers is heavily criticized globally due to increasing health and environmental concerns. Europe and North America have strict regulations related to chemical agriculture inputs and have banned various pesticides. Thus, these regions have a rising trend of using bio-pesticides and bio-fertilizers.
Reduction in arable-result of rapid population explosion and declining soil fertility
Growing industrialization and urbanization have continued to encroach on arable or cultivable land. The total land available for agriculture is diminishing. According to the FAOSTAT report published in 2022, the total agricultural land area in the globe was around 4.7 billion hectares in 2020, accounting for almost one-third of the total land area. One-third of agricultural land (almost 1.6 billion hectares) was farmland, with the remaining two-thirds being permanent meadows and pastures (around 3.2 billion hectares). The agricultural area has dropped by about 3% in the last two decades due to a 5% rise in cropland and a 6% loss in permanent meadows and pastures.
FIGURE 1 CROPLAND AREA PER CAPITA, BY REGION, 2000–2020 (HA)
Globally, the land has lost a third of its arable land due to erosion or pollution in the past 40 years, with potentially disastrous consequences as global demand for food soars. Nearly 33% of the world’s adequate or high-quality food-producing land has been lost at a rate that far surpasses the pace of natural processes to replace diminished soil. According to a report published by FAOSTAT in 2022, the global per capita value of farmland (0.2 hectares per person) in 2020 varied by region. Oceania's value was approximately eight times that of Asia and four times that of Africa, with nearly 0.8 hectares per person. Northern America had the second-highest farmland area per capita (0.5 hectares per inhabitant) in 2020, after only Europe (0.4 ha per capita). Latin America, the Caribbean, and Asia rounded out the top five, with 0.3 and 0.1 ha of farmland area per capita, respectively. Cropland area per capita has decreased in all areas during the last two decades. The second-largest loss (-23%) was reported in Northern America, where farmland area decreased by 9% while the population increased by 18%.
Cities and industries are expanding as more people acquire agricultural land to fulfill their housing and industrial needs. It is estimated that the reduction in arable land will be primarily driven by industrialization and infrastructural growth due to population growth. Another key factor is the rapid rise of pastures for animal feed and bio-based chemical feedstock.
Technological advancements in production of agrochemicals
1.1.1 RNA-based pesticides
Over the past couple of years, there has been an increase in pesticide-resistant crop varieties. Insects, such as corn rootworm, have evolved and become resistant to pesticides used in commodity crops. Therefore, scientists are working on RNA-based pesticides, which is a new application for a biotech tool that targets the protein-making machinery of insects. In 2017, the EPA authorized the first RNAi pesticide. SmartStax Pro is a GM maize seed that uses both transgenic insecticidal proteins and RNAi to combat western and northern corn rootworms.
Nano-agrochemical is an amalgamation of nanotechnology and agrochemicals, which has resulted in the production of nano-fertilizers, nano-herbicides, nano-fungicides, nano-pesticides, and nano-insecticides. Recently, these nano-agrochemicals have gained popularity due to their high effectiveness compared to conventional agrochemicals. They are also affordable and eco-friendly.
Value chain analysis:
The value chain has a vertical or strategic alliance between several independent business organizations in a supply chain, from the production units to the consumer. Various activities are undertaken to produce the final product by processing raw materials through different phases until its delivery to the final consumer.
The value chain connects manufacturers, suppliers, distributors, intermediaries, and customers. The stages of the value chain, which become the decisive factors while setting prices for agrochemical products, include the R&D stage, which involves the selection of the right strain and investment toward product development. Further, manufacturing these products also significantly adds to the cost of the end product. These products are directly sold to consumers through distributors or are further used by end-product manufacturers of adjuvants and seed treatment for better crop protection.
FIGURE 2 VALUE CHAIN ANALYSIS
Source: Company Publications, Industry Journals, Related Publications, and MarketsandMarkets Analysis
Market ecosystem exhibits supply and demand-side companies for biopesticides manufacturers:
1.2 Market ecosystem
FIGURE 3 AGROCHEMICALS: ECOSYSTEM VIEW
FIGURE 4 AGROCHEMICALS: MARKET MAP
Source: Secondary Research, Primary Interviews, and MarketsandMarkets Analysis
Note: The market map of the ecosystem is categorized into supply-side and demand-side companies.
Key players developing innovative products to acquire major market share:
Source: Company Website
Source: Company Website
Population growth and the consequent rise in demand for food materials have increased the demand for crop nutrition products, increasing the demand for various fertilizers and pesticides across all regions. Agrochemicals are vital in crop growth, showing improved performance and noticeable results. Due to intensive agricultural practices and the unbalanced use of fertilizers and crop protection chemicals, soil health has been severely affected worldwide. Nitrogen, phosphate, and potash are essential to produce crops used for food, feed, fiber, and fuel.
Pesticides enable farmers to produce safe, quality foods at affordable prices. They also help farmers provide abundant, nutritious, all-year-round foods necessary for human health. Fruits & Vegetables provide essential nutrients and are more abundant and affordable. Grains, milk, and proteins, which are vital to childhood development, are more widely available because of lower costs to produce food and animal feed.
Key players in the Agrochemical market are Bayer AG (Germany), BASF (Germany), UPL (India), Syngenta (Switzerland), EuroChem Group (Switzerland), Nufarm (Australia), K+S aktiengesellschaft (Germany), Corteva (US), Sumitomo Chemicals Co., Ltd. (Japan), ADAMA (Israel), Compass Minerals (US), Nutrien Ltd (Canada), Sociedad Química y Minera de Chile (Chile), Yara (Norway), Isagro S.P.A (Italy), OCP Group (Casablanca), Verdesian Life Sciences (US), Jiangsu Yangnong Chemical Co., Ltd (China), Agrolac (Spain), Atticus, LLC (US), Lianyungang Liben Crop Science Co., Ltd (China), Valent USA. LLC (US), Lier Chemicals Co., Ltd. (China), and Spicam Oxon (Italy).
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