Seed treatment: An emerging market with promising growth potential
forecasts the seed treatment market to grow from USD 6.1 billion in 2016 to USD 11.3 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 10.8% during the forecast period. Due to the increasing demand for integrated pest management practices to minimize pesticide usage, seed treatment products have been gaining preference for their beneficial characteristics such as the ability to combat early-season diseases and pests and their effect on crop yield. The objective of the report is to define, describe, and forecast the seed treatment market size based on type, application technique, crop, function and region.
Cereals & grains segment is estimated to be the most important crop type for the seed treatment market
Pesticide application on cereals & grains was seen to be the highest in the US and Asia Pacific countries. Insecticides such as imidacloprid and thiamethoxam have been widely used on corn and wheat cultivation in countries such as the US, China, and India. An increase in demand has been witnessed for seed treatment from developing regions as well due to the increasing awareness about sustainable agricultural practices. Hence, the cereals & grains segment dominated the seed treatment market in 2016.
Biological seed treatment, by type, is projected to be the fastest-growing segment over the next five years
The adoption of chemicals in seed treatment is decreasing owing to the awareness of the toxicological effects associated with them and the environmental degradation caused by excessive use of these pesticides. A majority of these chemicals have been banned in a few countries across Europe, which affects the global market to a significant extent. Due to the adoption of sustainable agricultural practices in developing and developed countries, biological seed treatment has been gaining importance amongst the farmers, which can be seen from the increasing research & development activities by the key players in this market.
Asia Pacific is projected to grow at the highest rate during the forecast period.
Asia Pacific is projected to be the fastest-growing region in the seed treatment market between 2017 and 2022. The Asia Pacific region has been experiencing significant demand for seed treatment due to the need to undertake efforts to minimize the environmental concerns associated with excessive pesticide use. There has been a positive trend in the consumption of insecticide seed treatment in countries such as Australia, China, and other developing countries of the region.
The seed treatment market is segmented region-wise, with a detailed analysis of each region by studying the key markets. These regions include North America, Europe, Asia Pacific, South America, and the Rest of the World (RoW).
Driver: Seed treatment as low cost crop protection solution
Seed treatment is one of the most popular chemical crop protection methods available today. It provides better crop establishment, that is, healthy germination and protection against seed-borne and soil-borne diseases at a relatively low cost than spraying, thereby ensuring the salability of the harvest. A relatively small amount of active ingredients is required to protect the seedling against a wide variety of fungal diseases and pests.
With rising concerns regarding crop protection, productivity, and yield, expenses on crop protection have significantly increased. Crop protection is the second-highest expense after fertilizers in farming. These expenses can be reduced through seed treatment as the volumes required are less as compared to foliar or furrow application. Due to the limited seed surface area, not only are the active ingredients required in limited quantities, but also are effective enough to control early seed diseases to a large extent. As compared to surface application of crop protection products, the loss is significantly reduced by 99% with the help of seed treatment.
Also, genetically modified (GM) seeds with target protection against specific pests are found to be more expensive than seed treatment. Hence, seed treatment is a more cost-effective solution than using GM seeds for crop protection in highly regulated GM countries.
Restraint: Existing ban on neonicotinoids
Chemical seed treatments are detrimental to the environment and pose a serious risk to pollinators. The neonicotinoid class of insecticides is considered as highly toxic to honeybees.
As per the report of IUCN (International Union for Conservation of Nature), neonicotinoids and another chemical substance, fipronil, are found to be poisonous the air, water, and soil. These pesticides leach into water from the soil and pose a serious threat to birds, butterflies, snails, and earthworms.
As the ban on neonicotinoids is linked with the depletion of bee species by research studies, its unavailability could force crop growers to rely on a few older classes of insecticides. This would, in turn, lead to the usage of foliar sprays of broad spectrum insecticides instead of targeted seed treatment, leading to a significant impact on beneficial & harmless insects and predators. This could further lead to crop damage due to the inadequacy to tackle invasive pests, which are resistant to older insecticide classes.
Rapeseed crops have been the worst affected post their ban in the UK. Apart from incurring a loss of around USD 1 billion, the crop has been severely infected with flea beetle, a pest normally controlled by neonicotinoids. Later in the season, the crop is susceptible to another problem, the turnip yellow virus that is spread by the peach potato aphid. Such bans serve as a restraint for market growth.
Opportunity: Innovative combination of products
With growth in R&D associated with seed treatments, there have been various positive product evolutions that can enter the market in the next five years. Manufacturers of seed treatment products have come up with innovative combinations of these products, which could be extremely beneficial for crop yields, both qualitatively and quantitatively.
For instance, the Poncho/VOTIVO product from Bayer SeedGrowth is a biological seed treatment for corn and soybean crops, and is a combination of a systemic chemical insecticide and biopesticide that provides protection against nematodes. Another multicomponent product launched in the market is BASF’s Vault HP plus Integral, which helps in maximizing nitrogen fixation and improving crop yield. In addition to the rhizobium inoculant, the product is also treated with a biofungicide, which helps in crop protection.
These combinations of chemical-biological and biological-biological components can be marketed and distributed to farmers in a customized way depending on the crop to be harvested and the soil conditions. Manufacturers such as Bayer and Syngenta have been developing biological seed treatment products based on crop growing conditions at the regional level. These customized services are expected to develop strong market inroads in the commercialized seeds industry in the next five years.
Challenges: Growing resistance to crop protection products
To achieve profits, growers have limited their adoption of good agricultural practices such as controlled pesticide application within the dosage limits and crop rotation. For instance, Brazilian farmers have been combating the soybean rust problem since it was first discovered in Brazil during the 2000/01 growing season. It took a significant number of years for researchers and farmers to develop successful strategies to limit the extent of damage from the disease. But recently, farmers and researchers have observed increased resistance of these diseases even toward new active ingredients. Increased usage of similar fungicides over the years has resulted in more rapid development of fungal resistance. This resistance can be observed in key soybean areas of Brazil such as Parana and Mato Grasso du Sul, where losses of USD 738 million were incurred due to Asian rust during the 2012–2013 growing season; similarly, in Paraguay, losses of up to 50% were incurred. This is posing a challenge for the market.