Agrochemicals to redefine agricultural market in future

Date:08-19-2022

By S K Chaudhary

The agrochemical industry is poised to boom, given the recent rise in awareness amongst farmers about improving their yields exponentially. With aggressive awareness campaigns by Government and stakeholders, farmers today are more conducive to adopting agrochemicals to support bigger and quality yields.

It is not easy for farmers to feed over 7 billion people every day for 365 days a year. That's how hard the agricultural industry and its supporting arm — the agrochemicals industry — have to work each day. There are two major challenges to it;growing population numbers and rampant pest infestations. Additionally, the quality of land available for farming, both in terms of value and size, has also gone down. The Food and Agriculture Organisation (FAO) estimates that pest infestations destroy up to 40% of crop production every year, leading to a loss of about $290 billion across the globe.

Agrochemicals can prove to be a blanket solution to both these challenges, by revitalising land fertility to meet increasing demands, while at the same time saving the crops from the threat of pests and infections. According to a Government estimate, pest and insect problems in India are so sizable that about 35% of crop yields are eaten away by them. Amid such a troublesome scenario, the agrochemical industry has to perform in parallel to the agriculture industry to allay its most pressing concerns today.

The globalagrochemical industry picks up post-pandemic

The agrochemical sector is all set to make a comeback after the Covid-19 pandemic halted its growth in the last two years. By 2030, the market size is expected to grow to $280 billion, at a Compounded Annual Growth Rate (CAGR) of 2.8% from 2022. It might be surprising to know that even though Asia-Pacific is the largest market for agrochemicals in the world, accounting for 27% share in 2020, North America is also supposed to be the fastest-growing one. India'sagrochemicals market is projected to grow at a rate of 8.5% between 2022 to 2027 and become a $7.4 billion market by 2026. Before the pandemic, China was one of the largest producers of agrochemicals in the world. The supply chain suffered due to the import restrictions that Covid-19 brought about in its wake. However, now that such restrictions are being lifted, the agrochemicals sector is projected to witness an upward trendworldwide.

A dire need for agrochemicals amid climate change

The agricultural sector has faced the most brutal effects of climate change. In the bigger picture, crops have suffered due to sudden changes in climate and natural disasters. Climate change has made pests hungrier, which worsens the effects of pest infestations and causes diseases in crops. This has led to more and more farmers turning towards agrochemicals to seek refuge and keep their yields growing at a stable rate. As these critical challenges prevail, growth statistics for the agrochemical market make a case for expansion.

Government support drives demand for agrochemicals

Recently, the Indian Government included agrochemicals to the list of 12 champion sectors, wherein India has a great potential to cater to the global supply chains. This has led to greater collaboration with private sector companies, which are providing innovative raw products at a cheaper price. Due to the rise in awareness among farmers, the coming of the internet and aggressive awareness programmes by Government, more farmers are becoming conducive to adopting agrochemicals for securing their yields. The increased availability of institutional credit offered by Government for agricultural inputs has also helped the market in a jubilant manner. As the agricultural sector grows, farmers now have better and speedier access to buying agrochemicals, which are a massive driver of change.

The way ahead

The world is waking up to the importance of agrochemicals. A UN estimate tells us that the global population is supposed to reach 9.8 billion by the year 2050, and 11 billion by 2100. Additionally, there are concerns of threats by climate change and diminishing land area for farming. Given these factors, agrochemicals make for a practical and hands-on approach to quality farming. Since 2009-10, there has been a massive increase in per hectare use of agrochemicals in India, and the efforts to make them a priority in terms of strengthening production have just started. All signs point toward agrochemicals becoming an even more significant role player in an industrial world, which will make agriculture a technically advanced domain, without farmers having to risk their yields on sheer luck.