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Portuguese agrochemical market qrcode

Oct. 22, 2008

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Oct. 22, 2008
The Portuguese agrochemical market faces many of the same challenges as others in Europe. The availability of products is under threat from the planned revision of the EU agrochemical registration Directive (91/414). There are beneficial changes occurring, such as recent national regulations on the distribution of pesticides and the entry of foreign, professional farmers. Portugal has attractive land prices and improving infrastructure, according to Antonio Saraiva, president of the Portuguese agrochemical industry association, the ANIPLA. Others changes are not so beneficial and the impact of all the changes will be felt by the crop protection industry.
The profile of farmers in Portugal has changed, Mr Saraiva notes. “There are more professional players in agriculture: big investment groups, people and companies from other European countries.” Farmers from across the border are increasingly attracted to Portugal. “Spanish farmers and investors, who are seeking to expand their production capacities in areas such as olive oil, citrus fruits and vegetables, are finding the ideal place to expand just a few kilometres from their border,” Mr Saraiva explains. “Land is available at affordable prices, water for irrigation, a similar climate and a welcoming community.”
The change has boosted the pesticide industry. “More consolidation at the farm level and the entry of new players has resulted in a more professional and competitive agriculture that seeks good profits and high-value produce and is thus [more] willing to invest in modern crop inputs, such as innovative crop protection products,” the ANIPLA chief explains. It has also caused a move from traditional to market-oriented farming and higher investment. That usually means better seeds, fertilisers and improved pesticides, he says.
Fields that were abandoned or had less professional farming for years have been reborn, he enthuses. “The most modern olive groves and citrus fruit can be found in the south of Portugal.”
The number of agricultural holdings has fallen by about 100,000 to 320,000. “All of that has come from farms of less than 20 ha.” The number of farmers has been reduced by the same number, while the number of farms of under 20 ha is down by half. The average holding area has almost doubled to nearly 12 ha, as result of consolidation, he adds.
Mr Saraiva complains that the Portuguese authorities failed to respond to the entry of Spanish olive farmers among others, not anticipating that it would stimulate national farmers to become more competitive. He desires improvement from the government with its “national strategic plan”, particularly for grapevines. “It is our most important crop and requires a clear strategy … and the potential to explore markets where original products normally obtain good results,” he says. He regrets that Portugal is not self-sufficient in olives, despite the large area grown and the favourable conditions for the crop.
The ANIPLA chief applauds legislation passed in 2005 governing agrochemical distributors. “Decree 173/2005 sets minimum standards on distributors, farmers (when applying products) and application companies”. It creates “responsible” technicians, such as graduates or those with pesticide product experience, and covers selling, use and distribution outlets. Due to the regulation, “Portugal probably has some of the best distribution warehouses and sales points in Europe.”
more land
More agricultural land is to become available. The Alqueva dam in the Alentejo region in the south-east of the country “is already the biggest reservoir in Europe at 250 km2” and its irrigation infrastructure will be completed by 2015, Mr Saraiva notes. That will bring about an extra 115,000 ha of irrigated fields, doubling the irrigated area compared with the last decade, he adds. “Alentejo has been known for extensive farming and reduced investment in the past 30-40 years, [but the dam] will provide opportunities.”
The newly available land could be used for anything from olives to maize or other biofuel crops to golf courses, Mr Saraiva speculates. “[But] it will generate new business for the crop protection industry,” he concludes.
The Portuguese agrochemical market topped €100 million ($150 million at current rate) in 2007, still below its 2004 peak of €116 million. Volumes were up for the first time in five years. There is a recovery under way and the ANIPLA expects 3-4% growth this year.
The most popular pesticides in Portugal are: copper and sulfur fungicides; the fungicides, mancozeb and folpet; and the herbicide, glyphosate, which accounts for half of volume use of herbicides in the country. Insecticides make up a relatively minor market, with organophosphates accounting for the bulk. The insecticide, chlorpyrifos, takes 25% of the market segment. The importance of grapevines and Atlantic climatic conditions, causing downy or powdery mildew, results in the need to apply fungicides. They make up 72% of the national agrochemical market in volume terms.
Consolidation has not been limited to farm holdings. One of the key changes in the country in the past decade or so has been the consolidation of the crop protection industry, with the creation of the market’s two major international companies.?
Portugal has 50 registered agrochemical suppliers, but three companies, Bayer CropScience, Syngenta and the national company, Sapec, account for more than 60% of the market, Mr Saraiva says. Sapec has significant volume exports to the Spanish market, the ANIPLA chief says. The other major Portuguese company is Agroquisa. Both have manufacturing plants in Portugal and act as distributors for other foreign manufacturers.
Despite the strength of the three companies, Mr Saraiva believes competitiveness is “very strong not only in pre-season but also in spring”, particularly with the grapevine fungicide market. “Grapevines are an important crop for the use of crop protection products.” Other important markets showing strong competition for pesticides are those for fruit, potatoes, maize and, increasingly, olives, Mr Saraiva adds.
Grapevines, pome fruit and olives have prospered in the past decade, while arable crops have suffered.
The ANIPLA president has had contact with the crop protection industry since his boyhood, when his father worked in the industry. “My father worked in the sector for 35 years.” Mr Saraiva has worked on several working groups in the association and is in his third three-year term as president of the board of directors. He believes the ANIPLA’s work is of “extreme importance”, covering GAP to lobbying for improvements in industry regulations.
“In the busier day-to-day business, companies tend to forget the importance of a strong association, promoting and protecting its affiliates’ interests.” The ANIPLA represents around 95% of the market in value terms.
registration issues
The availability of products due to the revision of registrations in the EU will be among the major themes in Portugal for the next ten years, Mr Saraiva expects. “The ANIPLA has been informing farmers on the outcomes of Directive 91/414 and conveying their opinions to the Portuguese authorities.” He says that Portuguese agriculture will be impacted although the relatively minor insecticide market segment will bear the largest impact.
“National authorities need to understand the threat and difficulties that Portuguese and European farmers will face if cut-off criteria and substitution principles are applied,” Mr Saraiva warns. “We expect that regulatory bodies will work with the industry to shorten the registration period for substances that will eventually replace those to be ejected from the market,” he believes. The ANIPLA was involved in “intense dialogue” on this issue during the Portuguese EU presidency in the second half of 2007.
“Portugal has developed IPM positive lists … including the introduction of a subsidy payment that has worked as a major driver in adoption of IPM practices,” Mr Saraiva notes. “Supervision by technical advisory groups educated farmers, leading to the increasing use of new and more environmentally friendly products,” he adds.
The ANIPLA president rates the Italian and Greek registration systems above the Portuguese. “[The system] is slower than in Italy, similar to that of France and faster than those of Spain and previously, Greece.” However, he notes that the Greek system has recently become the fastest of the southern EU member states.
The speeding up of approvals in Greece has followed its adoption of a mutual recognition system. “They are recognising other southern European registrations, mainly Italian ones,” Mr Saraiva says. “There has been a boom of new ai registrations in Greece, but this will slow down as soon as they catch up with Italy.”
The European Commission has proposed that the EU be divided into three zones that would provide the legal basis, and joint procedures within, for the submission of product approval applications. Portugal would be in the southern zone along with Bulgaria, Greece, Spain, France, Italy, Cyprus and Malta.
The ANIPLA would welcome such a system in Portugal, its chief adds. “We would face some problems,” Mr Saraiva cautions. “Firstly, Spain, the natural country to be used for recognition, has fewer registered ais than Portugal. Secondly, we could use Italy – mainly for diseases and weeds – but we would still need our own national efficacy data,” he explains.
Mr Saraiva still believes mutual recognition would be a “great opportunity” for farmers who frequently complain about the availability of solutions on one side of the border but not on the other.
The association has monitored registration activities, finding that an approval for a new active ingredient takes around three years in Portugal, some 18 months for a new formulation and 10-12 months for label extensions.
The national system is likely to become slower, Mr Saraiva predicts. “There is no commitment from the authorities to follow the registration timescale and those approval times were calculated prior to cutbacks.” Cost controls from the Ministry of Agriculture - the sole authority for pesticide registrations for agricultural use - have resulted in fewer people dedicated to dossier evaluation, resulting in dossiers piling up on desks, the president laments.
Staff have moved to the private sector, seeing more scope for career progression. The physical and chemical, toxicological and environmental areas present the main concern. The former evaluation teams have been reduced to single person “teams”. The situation is generating several bottlenecks in the evaluation process, decreasing significantly the speed of registrations and the time to market.
The cost-cutting also compromises the participation of the Portuguese at EU meetings. “This is of extreme importance to defend the position of south European farming and farmer’s competitiveness,” he says. “The quality of service provided by Portuguese officials in the past 10-15 years and the efforts in closing the gap on neighbouring countries could be lost and this is a big concern to ANIPLA members.”
“Portugal could barely act as a rapporteur member state for new ais and the generated workload from Annex III [product] re-evaluation will further delay new registrations.”
The situation can be improved, Mr Saraiva insists. “The ANIPLA’s board of directors discuss the registration issues quite often and we can’t accept the current slowdown of the approval process and other tasks such as new uses.” He says that the Ministry needs to show that it wants to maintain an effective and results-driven registration body, “helping to modernise” Portuguese agriculture. “That means investment in resources – the number and quality of people - training, exchange of opinions and practices with other EU officials and a constructive dialogue with the ANIPLA.”
The association has proposed: the submission of biological dossiers in English in order to avoid wasted time on translations; and the establishment of some mutual recognition principles to close the gap in some crops with products registered in other southern EU member states. “We have tried to be involved, as much as possible, in discussions on new legislation in order to minimise any bureaucratic burdens and make it easily transposed and absorbed by the farming community.”

Backgroud about the interviewee:
Antonio Saraiva, president of the Portuguese crop protection association, the ANIPLA, tells his hope for a growing and increasingly professional Portuguese agriculture sector becoming a boon for the pesticide business.

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