India's agro-chemical industry needs to ease these growing pains

By a MD of an insecticides company

Every business has its challenges and the agro-chemical industry is no exception to this rule. On the face of it, the industry is plagued by poor uptake of farm input materials, lack of awareness and knowledge among farmers, zero innovation and scanty investment in Research and Development (R&D).

Apart from this, it is also grappling with some serious issues like the markets being flooded with spurious and low quality materials. Some may also count the advent of genetically-modified (GM) products and meeting strict regulatory needs as the other sore points.

As we enter a new era of governance and welcome a new Government, it is necessary to draw the attention of the nation’s policy-makers to the issues that are bogging us down and impeding our momentum.

 

Farmers resist change:

As a professional who works with people at the grassroots, I see a problem at a deeper level — the reluctance of farmers to adopt anything that counters their traditional understanding of farming. They are resistant to anything that they think could damage their crops, even if it means that they get lower price for their yield when not using agro-chemicals. They are not aware of the right agro-chemicals, nor do they know the right time and amount to use for the type of crop they are growing.

I can understand their concern over crop volumes as they struggle against volatile market prices but their lack of awareness and understanding is harming their prospects more than the prices. Hence, many companies have initiated training of farmers along with the Government but there’s a long way to go. 

 

Overdependence on generic agro-chemicals:

Insecticides dominate the crop protection industry in India and have a 50 per cent market share, with herbicides, fungicides, micronutrients, plant growth regulators and bio-stimulants capturing the other half of the market. A bulk of domestic consumption of insecticides and herbicides is generic in nature and this demand is likely to grow in future, mainly due to the price difference with branded ones.

 

The fact remains that generic agro-chemicals are popular among farmers. In the absence of new, patented products in the market, they grow dependent on available varieties. Industry majors continuously try to reverse this trend by bringing in products from other countries to provide variety to farmers and introduce better products in the market. They also enter into partnerships and tie-ups with multinational corporations abroad to hasten the process.

 

Poor supply chain management and counterfeit products:

India needs efficient distribution systems to let more farmers access these products. Problems of supply chain inefficiencies and inadequate infrastructure have plagued the agro-chemical industry, which result in post-harvest losses estimated at Rs 45,000 crore every year, says a FICCI report.

 

The lack of an efficient distribution system also makes it difficult for agro-chemical companies to reach out to farmers to promote their products and educate them about their usage and benefits. Besides, generic products are prone to counterfeiting. These sub-standard products not only prove to be ineffective but also harm crops many times. They hurt the laboriously-built reputation of agro-chemical companies. A poor supply chain and the ignorance of farmers facilitate the entry of counterfeit products, especially in remote areas.

 

R&D investment is a sticking point:

R&D is crucial for developing new molecules and improving existing products. But the cost is high. Apart from the cost of setting up a research facility, tracking the right resources and running it call for sustained investment while the return is slow. That prevents firms from investing in R&D as well as any other similar project. What they do not realise is that in order to improve the products and to reduce their prices, R&D is needed.

While research on GM crops is being extended to almost everything that can be cultivated, not much is being done by way of research in the agro-chemical industry. Had this sector been given that amount of attention, especially in tropical countries where crops are more vulnerable than temperate climates, we may not have been struggling on issues like farmers’ income and food security.