Anatomizing the European biopesticides market

Date:06-09-2017

A study on global population trends, conducted by the UN, estimates the population to reach 8 billion in 2024 and 9 billion by 2050. The UN has also estimated that the global food production will double or increase by 60% to feed the growing population. Losses occurred through crop infestation is the major issue raised across the globe. Pesticides hinder the growth of pests and play a crucial role in mitigating the gap between the global demand for food and its supply by improving yields and preventing crop losses. Although the global pesticides market is dominated by the synthetic products, biopesticides show potential market growth with a CAGR of 16% from 2017 to 2022. In 2016, biopesticides held 5% of the global pesticides market; this segment projected to reach more than 7% by 2022.

As per MarketsandMarkets, the recorded sale of pesticides in the European region was valued at ~USD 12.5 billion in 2016. Biopesticides have emerged as a lucrative replacement for synthetic pesticides in Europe due to increasing regulations on chemical use and chemical residue limit. The ban on use of glyphosate, neonicotinoids, and paraquat inclines the growth of the European biopesticides industry. Europe is the second largest market for biopesticides utilization and registered around 25% of the total market in 2016. The European biopesticides market was valued at USD ~1.0 billion in 2016 and is projected to grow at a CAGR of ~16% from 2017 to 2022; here, Spain is the major market followed by Italy and France.

Italy held around 25% of the total European biopesticides market in 2016. Vegetables, corn, wheat, and rice are important crops for the Italian biopesticides seed treatment market. Government regulations have been the major obstacles in the growth of the crop protection chemicals market in Italy. One of the popular chemical active ingredients, Imidacloprid, is banned in Italy. Hence, phasing out of toxic elements is expected to push the Italian biopesticides market.

In late 2006, German authorities found isofenphos methyl, an illegal pesticide, in peppers from southern Spain. The Spanish regional government encouraged more extensive use of biopesticides and recorded around 36% of the total European biopesticides market in 2016.

France is the third-largest biopesticides market in Europe which held around 18% share of the total European biopesticides market in 2016. The country has historically been one of the most dominant agricultural centers in Europe.

Biopesticides: Evolution and Segmentation

Biopesticides were first used in the late 1800s when fungal spores were used to control insect pests. Since then, biopesticide use has been used through modern agricultural history; however, as of today, it has a smaller market share compared to conventional crop protection due to lack of awareness and presence of big companies in the chemical pesticides market. Biopesticides cover a wide spectrum of crop protection products which are divided into four categories namely, microorganisms (bacterium, fungus, protozoa, virus, and viroid), plant extracts, semiochemicals (for mass trapping or trap cropping), and beneficial insects.

Fig. 1. Europe: Pesticides Market, 2016 (Market Share)
In Europe, several biopesticides come under the Regulation 1107/2009. Sustainable Use Directive 2009/128/EC promotes the usage of biopesticide-based integrated pest management solutions. The European government regulations pertaining to pesticides usage and growing demand for sustainable agriculture drive the biopesticides market. Several European countries have initiated national programs for promoting the use of biopesticides. For instance, France has introduced a scheme “Ecophyto 2018” that aims at reducing 50% of the synthetic pesticide consumption by 2018. On similar lines, in 2013, Denmark introduced the Green Growth program providing financial support to developers of alternative plant protection products. The presence of synthetic pesticides in agrochemicals is a major concern for the environment and human & animal health which would play a key role in driving growth for biopesticides.

Integrated pest management (IPM) strategies employ a combination of synthetic and biological crop protection products. The R&D process for a novel synthetic pesticide typically involves $250 million and around nine years. At the other hand, biopesticides require $10 million and a time frame of four years. Thus, the exceedingly high costs associated with developing synthetic crop protection chemicals is another factor for the growth of this market.

Fig.3. Trend in Europe Organic Farmland Area Growth


Source: Research Institute of Organic Agriculture (FiBL)

Over the last three decades, organic food and farming have continued to grow across Europe. According to a report published by FiBL (Research Institute of Organic Agriculture) in 2015, the organic farmland in Europe has reached 12.7 million hectares showing ~10% growth over the last year. Since biopesticides are chemical–free, they are used in a large scale in organic farming. Hence, the market demand for biopesticides is increasing with the growing popularity of organic food & beverage products in the European region.

Fig.4. Organic Farmland in Europe by Country (Top 10), 2014


Source: Research Institute of Organic Agriculture (FiBL)

Challenges

Educating the farmers

Biopesticide applications are often highly specific and have very precise modes of action. Hence, it is important to educate the farmers about the appropriate procedure of biopesticide dosage, quantity, and frequency of application. However, it is very difficult to convey the same to farmers owing to infrastructure issues and regional languages & dialects. Additionally, farmers are passive towards the adoption of newer products, since possible risks of crop failure is involved. Along with this, the majority of biocontrol options require frequent, repetitive applications for optimal efficacy. The added labor and expense of these applications are deterrent and inhibit the growth of biopesticides.

Regulatory overview

Competing with synthetic pesticides will be difficult for smaller developers, both in terms of demonstrating the efficacy of biopesticides and convincing growers to convert from their reliable methods to new and relatively unproven products. Additionally, regulatory approval for biopesticides derived genetically or from crop pathogens is indefinite; this adds to the challenge of approval and commercialization and affects the growth factor. Till date, the regulatory framework followed in Europe for biopesticides registration is complicated and hence, restricts the growth of the market to a certain extent.

Biopesticides Marker: Leading Players & Recent Developments



The rapid growth in the biopesticides industry is adding jobs and contributing to the European economy while also providing organic and conventional growers, pest control applicators, and public health officials with effective pest control tools that are safe for the environment and help reduce pesticide resistance. Biopesticides offer an environmentally sustainable approach to increase crop production and health.