August, 2014
Agrochemicals for ensuring foodand Nutritional Security for the Nation
Knowledge and Strategy Paper released at
CONFERENCE 2 0 1 4
th
4 National
AGROCHEM CALS
Knowledge and Strategy Partner
Knowledge and Strategy Partner
01
Knowledge and Strategy Partner
01
Knowledge and Strategy Partner
03
Knowledge and Strategy Partner
03
1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
3. The need of Agrochemicals for food and nutritional security. . . . . . . . . . . . . . . . . . . . 11
4. Indian Agrochemical market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Industry structure and Competitive landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Indian market scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution of domestic crop protection market by Product category. . . . . . . . . . 16
State wise distribution of crop protection market . . . . . . . . . . . . . . . . . . . . . . . . . 17
Distribution and Sales Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Challenges faced by the Indian Crop Protection Industry . . . . . . . . . . . . . . . . . . . . 20
Opportunities and Key Growth Drivers for Indian Crop Protection Market. . . . . . . 22
5. The Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Key imperatives for Agrochemical Companies, Govt. and Regulatory bodies . . . . . 24
6. Key Players: Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7. Annexure - I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9. About Tata Strategic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Tata Strategic Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Knowledge and Strategy Partner
05
Knowledge and Strategy Partner
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Manish PanchalPractice Head - Chemical & Energy
Tata Strategic Management Group
Charu Kapoor Engagement Manager - Chemicals
Tata Strategic Management Group
P S Singh
FICCI
Head- Chemicals & Petrochemicals
The report on Agrochemicals for food and nutritional security for the nation is a part of joint
endeavor of Federation of Indian Chambers of Commerce and Industry (FICCI) and TATA
Strategic Management Group (TSMG) Chemical Practice's to highlight the importance of
agrochemicals for the Indian agriculture. It has been an ongoing exercise for regularly tracking
the trends in agrochemical and associated industries. The resulting knowledge and experience
gives us an additional advantage to prepare this report.
India requires a robust, modernized agriculture sector to ensure the food and nutrition security
for its population given the fact that the scope for further increasing cultivable land is limited. In
order to meet the food grain requirements of the nation, the agricultural productivity and its
growth needs to be sustained and further improved. In combination with Integrated Pest
Management and Plasticulture techniques Agrochemicals can play a critical role by providing
pre and post-harvest protection to crops and the agricultural output.Through this report we
have highlighted the various challenges faced by Indian Agriculture and Agrochemical sector and
indicated way forward for increasing the penetration of agrochemicals to ensure food and
nutrition security for the nation.
We are grateful to the inputs provided by industry leaders who agreed to interact with us. Their
knowledge and guidance helped us shape the report.
The report is a result of FICCI's objective to highlight the importance of agrochemicals in national
economy and business opportunities present in the sector. We are thankful to FICCI for providing
us an opportunity to develop a report which can play a pivotal role in achieving this objective.
Foreword
Table of Content
1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
3. The need of Agrochemicals for food and nutritional security. . . . . . . . . . . . . . . . . . . . 11
4. Indian Agrochemical market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Industry structure and Competitive landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Indian market scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Distribution of domestic crop protection market by Product category. . . . . . . . . . 16
State wise distribution of crop protection market . . . . . . . . . . . . . . . . . . . . . . . . . 17
Distribution and Sales Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Challenges faced by the Indian Crop Protection Industry . . . . . . . . . . . . . . . . . . . . 20
Opportunities and Key Growth Drivers for Indian Crop Protection Market. . . . . . . 22
5. The Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Key imperatives for Agrochemical Companies, Govt. and Regulatory bodies . . . . . 24
6. Key Players: Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7. Annexure - I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9. About Tata Strategic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Tata Strategic Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Knowledge and Strategy Partner
05
Knowledge and Strategy Partner
04
Manish PanchalPractice Head - Chemical & Energy
Tata Strategic Management Group
Charu Kapoor Engagement Manager - Chemicals
Tata Strategic Management Group
P S Singh
FICCI
Head- Chemicals & Petrochemicals
The report on Agrochemicals for food and nutritional security for the nation is a part of joint
endeavor of Federation of Indian Chambers of Commerce and Industry (FICCI) and TATA
Strategic Management Group (TSMG) Chemical Practice's to highlight the importance of
agrochemicals for the Indian agriculture. It has been an ongoing exercise for regularly tracking
the trends in agrochemical and associated industries. The resulting knowledge and experience
gives us an additional advantage to prepare this report.
India requires a robust, modernized agriculture sector to ensure the food and nutrition security
for its population given the fact that the scope for further increasing cultivable land is limited. In
order to meet the food grain requirements of the nation, the agricultural productivity and its
growth needs to be sustained and further improved. In combination with Integrated Pest
Management and Plasticulture techniques Agrochemicals can play a critical role by providing
pre and post-harvest protection to crops and the agricultural output.Through this report we
have highlighted the various challenges faced by Indian Agriculture and Agrochemical sector and
indicated way forward for increasing the penetration of agrochemicals to ensure food and
nutrition security for the nation.
We are grateful to the inputs provided by industry leaders who agreed to interact with us. Their
knowledge and guidance helped us shape the report.
The report is a result of FICCI's objective to highlight the importance of agrochemicals in national
economy and business opportunities present in the sector. We are thankful to FICCI for providing
us an opportunity to develop a report which can play a pivotal role in achieving this objective.
Foreword
Table of Content
Knowledge and Strategy Partner
06
Knowledge and Strategy Partner
07
Figure 1: Losses caused by different pests (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
Figure 2: Indian Rural-Urban population comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Figure 3: Per capita consumption growth in Animal Products . . . . . . . . . . . . . . . . . . . . . . . . . 12
Figure 4: Per capita arable land (ha). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 5: Average size of landholdings (ha) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 6: Yield comparison (Tonnes/ha) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Figure 7: Crop wise pests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 8: Food requirements (Mn. tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 9: Indian Crop Protection Market (USD Billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figure 10: Agrochemical Value Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 11: Key Industry Players in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 12: Indian Crop Protection Market split . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Figure 13: Major crop protection products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Figure 14: State wise pesticide consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 15: Crop protection distribution network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Figure 16: Indian Agrochemical Exports, FY10-FY14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Figure 17: Opportunities in generic products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 18: Pesticide consumption (Kg/ha) comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 19: Indicative end to end farmer solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figure 20: Integrated Pest Management components. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 21: Plasticulture applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Figure 22: Benefits of Plasticulture applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 23: Key Agrochemical Players in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
LIST OF FIGURES
This report is developed by Tata Strategic Management Group with support of FICCI as the
knowledge paper for 4th National Conference on "Agrochemicals for ensuring food and
nutritional security for the nation".
At 1.2 billion, India is the second most populous country after China in the world. According to
United Nations statistics, India will surpass China to become world's most populous country by
2028. French Institute of Demographic Studies, predicts, that by 2050, India will take the top
spot with a staggering population of 1.6 billion ( up from the present level of 1.2 billion) to leave
behind current world leader China, at the second place with 1.3 billion people.However, Indian
Agriculture is facing a critical challenge of maintaining food and nutrition security for the
burgeoning population. According to GHI (Global Hunger Index) rating of 2013, India stands at
16th position amongst 120 developing nations covered.
Increasing urbanization, reduction in arable land, decreasing farm size, consumption shift
towards animal products and heavy dependence on monsoons are some of the critical
challenges faced by Indian agriculture. These factors highlight the importance of agrochemicals
for enhancing food and nutrition security for the nation. Moreover, low per hectare yield as
compared to global average and increasing pest attacks further strengthen the need of
agrochemicals.
The Indian crop protection industry is currently valued at USD 4.3 billion and is expected to grow
at a CAGR of 12% over the next five years. Insecticides is largest sub-segment of agrochemicals
with 60% market share whereas herbicides with 16% market share is the fastest growing
segment in India. Going ahead, opportunities for Indian crop protection industry will come in the
form of exports, growth in generic products, product portfolio expansion, and growth in
herbicides and fungicides.
However, the Industry faces a number of challenges. Some of the key challenges are stringent
environment regulations across the world, low focus on R&D due to high costs and long
gestation period for new products and rising sale of non-genuine products. Non-genuine
products are not only a challenge to agrochemical industry but to the overall Indian economy,
resulting in loss of revenues for farmers, agrochemical companies and Government.
The opportunities and potential exist, however a collaborative approach from the Industry,
Government and Regulatory bodies is required to ensure food and nutrition security for the
nation. Product innovation strategies, end to end comprehensive service offering to the farmer,
effective marketing and distribution strategies like educating the distributors/retailers apart
from farmers and leveraging on IT and Telecommunication infrastructure are some of the
Executive summary1
Knowledge and Strategy Partner
06
Knowledge and Strategy Partner
07
Figure 1: Losses caused by different pests (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
Figure 2: Indian Rural-Urban population comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Figure 3: Per capita consumption growth in Animal Products . . . . . . . . . . . . . . . . . . . . . . . . . 12
Figure 4: Per capita arable land (ha). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 5: Average size of landholdings (ha) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 6: Yield comparison (Tonnes/ha) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Figure 7: Crop wise pests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 8: Food requirements (Mn. tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 9: Indian Crop Protection Market (USD Billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figure 10: Agrochemical Value Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 11: Key Industry Players in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 12: Indian Crop Protection Market split . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Figure 13: Major crop protection products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Figure 14: State wise pesticide consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 15: Crop protection distribution network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Figure 16: Indian Agrochemical Exports, FY10-FY14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Figure 17: Opportunities in generic products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 18: Pesticide consumption (Kg/ha) comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 19: Indicative end to end farmer solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figure 20: Integrated Pest Management components. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Figure 21: Plasticulture applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Figure 22: Benefits of Plasticulture applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 23: Key Agrochemical Players in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
LIST OF FIGURES
This report is developed by Tata Strategic Management Group with support of FICCI as the
knowledge paper for 4th National Conference on "Agrochemicals for ensuring food and
nutritional security for the nation".
At 1.2 billion, India is the second most populous country after China in the world. According to
United Nations statistics, India will surpass China to become world's most populous country by
2028. French Institute of Demographic Studies, predicts, that by 2050, India will take the top
spot with a staggering population of 1.6 billion ( up from the present level of 1.2 billion) to leave
behind current world leader China, at the second place with 1.3 billion people.However, Indian
Agriculture is facing a critical challenge of maintaining food and nutrition security for the
burgeoning population. According to GHI (Global Hunger Index) rating of 2013, India stands at
16th position amongst 120 developing nations covered.
Increasing urbanization, reduction in arable land, decreasing farm size, consumption shift
towards animal products and heavy dependence on monsoons are some of the critical
challenges faced by Indian agriculture. These factors highlight the importance of agrochemicals
for enhancing food and nutrition security for the nation. Moreover, low per hectare yield as
compared to global average and increasing pest attacks further strengthen the need of
agrochemicals.
The Indian crop protection industry is currently valued at USD 4.3 billion and is expected to grow
at a CAGR of 12% over the next five years. Insecticides is largest sub-segment of agrochemicals
with 60% market share whereas herbicides with 16% market share is the fastest growing
segment in India. Going ahead, opportunities for Indian crop protection industry will come in the
form of exports, growth in generic products, product portfolio expansion, and growth in
herbicides and fungicides.
However, the Industry faces a number of challenges. Some of the key challenges are stringent
environment regulations across the world, low focus on R&D due to high costs and long
gestation period for new products and rising sale of non-genuine products. Non-genuine
products are not only a challenge to agrochemical industry but to the overall Indian economy,
resulting in loss of revenues for farmers, agrochemical companies and Government.
The opportunities and potential exist, however a collaborative approach from the Industry,
Government and Regulatory bodies is required to ensure food and nutrition security for the
nation. Product innovation strategies, end to end comprehensive service offering to the farmer,
effective marketing and distribution strategies like educating the distributors/retailers apart
from farmers and leveraging on IT and Telecommunication infrastructure are some of the
Executive summary1
Knowledge and Strategy Partner
08
Knowledge and Strategy Partner
09
possible levers for companies to expand their presence amongst the end users and promote use
of agrochemicals. Integrated Pest and Management and Plasticulture techniques can support
agrochemicals for securing food and nutrition for the nation.
However, the companies cannot achieve their objective in isolation. Continued infrastructural
support from Government is necessary for companies to improve their speed to market.
Government should also provide implementation support in terms of strict actions, regular
crackdowns, and punishments to stop the menace of non-genuine products. Adequate support
is also required for encouraging the industry to invest in R&D activities and develop innovative
solutions.
A collaborative and comprehensive approach can therefore help in overcoming the supply
demand constraints in the Indian agriculture sector, thereby ensuring food and nutrition
security for the nation.
Introduction2The global population currently stands at 7 billion, and is expected to rise to 9.3 billion by 2050.
This will require increase in global food production by 70% in order to meet the rising demand.
On one hand there is need to produce more food, on the other hand the world is facing
challenges of increasing urbanization, decreasing per capita arable land, increasing
malnutrition, rising food inflation and loss of crop output to pests, insects, weeds and diseases.
Globally, up to 40% of crop output is lost due to attack of pests, weeds and diseases. To overcome
these challenges, it is essential to use crop protection chemicals.
The role of crop protection chemicals is not limited to protection; they help in yield
enhancement as well. Use of crop protection chemicals can increase crop productivity up to
50%, which helps mitigate crop loss from pest attacks by 40%. It is estimated that almost 20% of
world's agricultural production is lost due to post-harvest pest attacks.Thus, crop protection
chemicals are essential to ensure food and nutritional security.
Figure 1: Losses caused by different pests (%)
Traditionally, agrochemicals have been manufactured through chemical synthesis but lately
biochemical processes are gaining popularity. Usually, agrochemicals involves active ingredient
in a definite concentration along with adjuvants which enhance their performance, safety and
usability. The agrochemicals are diluted in recommended doses and applied on seeds, soil,
irrigation water and crops to prevent the damages from pests, weeds and diseases.
The crop protection chemicals can be broadly classified into five types:
1.1. Insecticides:Insecticides provide protection to the crops from the insects by either killing
them or by preventing their attack. They help in controlling the pest population below a
desired threshold level.
Weeds
33%
Insects
26%
Diseases
26%
Rodents
6%
Others
8%
Source: Industry Reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
08
Knowledge and Strategy Partner
09
possible levers for companies to expand their presence amongst the end users and promote use
of agrochemicals. Integrated Pest and Management and Plasticulture techniques can support
agrochemicals for securing food and nutrition for the nation.
However, the companies cannot achieve their objective in isolation. Continued infrastructural
support from Government is necessary for companies to improve their speed to market.
Government should also provide implementation support in terms of strict actions, regular
crackdowns, and punishments to stop the menace of non-genuine products. Adequate support
is also required for encouraging the industry to invest in R&D activities and develop innovative
solutions.
A collaborative and comprehensive approach can therefore help in overcoming the supply
demand constraints in the Indian agriculture sector, thereby ensuring food and nutrition
security for the nation.
Introduction2The global population currently stands at 7 billion, and is expected to rise to 9.3 billion by 2050.
This will require increase in global food production by 70% in order to meet the rising demand.
On one hand there is need to produce more food, on the other hand the world is facing
challenges of increasing urbanization, decreasing per capita arable land, increasing
malnutrition, rising food inflation and loss of crop output to pests, insects, weeds and diseases.
Globally, up to 40% of crop output is lost due to attack of pests, weeds and diseases. To overcome
these challenges, it is essential to use crop protection chemicals.
The role of crop protection chemicals is not limited to protection; they help in yield
enhancement as well. Use of crop protection chemicals can increase crop productivity up to
50%, which helps mitigate crop loss from pest attacks by 40%. It is estimated that almost 20% of
world's agricultural production is lost due to post-harvest pest attacks.Thus, crop protection
chemicals are essential to ensure food and nutritional security.
Figure 1: Losses caused by different pests (%)
Traditionally, agrochemicals have been manufactured through chemical synthesis but lately
biochemical processes are gaining popularity. Usually, agrochemicals involves active ingredient
in a definite concentration along with adjuvants which enhance their performance, safety and
usability. The agrochemicals are diluted in recommended doses and applied on seeds, soil,
irrigation water and crops to prevent the damages from pests, weeds and diseases.
The crop protection chemicals can be broadly classified into five types:
1.1. Insecticides:Insecticides provide protection to the crops from the insects by either killing
them or by preventing their attack. They help in controlling the pest population below a
desired threshold level.
Weeds
33%
Insects
26%
Diseases
26%
Rodents
6%
Others
8%
Source: Industry Reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
11
Knowledge and Strategy Partner
10
1.2. Fungicides:Fungicides protect the crops from the attack of fungi and can beof two types -
protectants and eradicants. Protectants prevent or inhibit fungal growth and
eradicantskill the pests on application.
1.3. Herbicides:Herbicidesalso called as weedicides are used to kill undesirable plants. They
can be of two types - selective and non-selective.
1.4. Bio-pesticides:Bio-pesticides are new age crop protection products manufactured from
natural substances like plants, animals, bacteria and certain minerals.They are eco-
friendly, easy to use; require lower dosage amounts for same performance as compared to
chemical based pesticides.
1.5. Others (Fumigants, Rodenticides, Plant growth regulators etc.):Fumigants and
rodenticides are the chemicals which protect the crops from pest attacks during crop
storage. Plant growth regulators help in controlling or modifying the plant growth process
and are usually used in cotton, rice and fruits.
The following sections of the report provide an overview of the Indian crop protection market,
the challenges faced by the Indian agriculture sector and the role of agrochemicals in ensuring
food and nutritional security of the nation.
At 180 million hectares, India holds second largest agricultural land in world. Almost 47% of
India's workforce is employed in agriculture; however its contribution to the GDP is a mere 14%.
Nearly 81 million hectares of India's land is desertified, threatening the food security. The
overgrazing of land and changing climatic patterns are exacerbating the situation. As more land
becomes unusable, the food security of the Indian population is increasingly endangered.
Being the second most populous country in the world, India faces a critical challenge of ensuring
adequate food availability. The recent GHI (Global Hunger Index) rating of 2013 puts India at
16th position amongst the 120 developing nations covered. Compared to the global average of
13.8, the hunger index in India has a value of 21.3. Child malnutrition (under 5 years of age) in
India stands at 44%, much higher than neighbouring countries like Pakistan, Bangladesh and
many African countries.
Critical Challenges faced by Indian Agriculture
Rising urban and declining rural population:The Indian population is estimated to
reach almost 1.5 billion by 2030. It is expected that the Indian agriculture sector has to
produce 355 million tonnes of food grains by 2030 in order to meet the growing
demand. However, a critical challenge faced by the country is the reduction in
agricultural workforce. The percentage share of rural population has consistently
declined from 75% in 1991 to 67% in 2014. This would lead to an increased pressure to
increase agriculture productivity to feed the growing population.
l
The need of Agrochemicals for
food and nutritional security3
Figure 2: Indian Rural-Urban population comparison
1991 2001 2011 2014 (E)
25%
28%
32%
33%
75%
72%
68% 67%
Urban Population (%) Rural Population (%)
Source: Census of India 2011, Tata Strategic Estimates
Knowledge and Strategy Partner
11
Knowledge and Strategy Partner
10
1.2. Fungicides:Fungicides protect the crops from the attack of fungi and can beof two types -
protectants and eradicants. Protectants prevent or inhibit fungal growth and
eradicantskill the pests on application.
1.3. Herbicides:Herbicidesalso called as weedicides are used to kill undesirable plants. They
can be of two types - selective and non-selective.
1.4. Bio-pesticides:Bio-pesticides are new age crop protection products manufactured from
natural substances like plants, animals, bacteria and certain minerals.They are eco-
friendly, easy to use; require lower dosage amounts for same performance as compared to
chemical based pesticides.
1.5. Others (Fumigants, Rodenticides, Plant growth regulators etc.):Fumigants and
rodenticides are the chemicals which protect the crops from pest attacks during crop
storage. Plant growth regulators help in controlling or modifying the plant growth process
and are usually used in cotton, rice and fruits.
The following sections of the report provide an overview of the Indian crop protection market,
the challenges faced by the Indian agriculture sector and the role of agrochemicals in ensuring
food and nutritional security of the nation.
At 180 million hectares, India holds second largest agricultural land in world. Almost 47% of
India's workforce is employed in agriculture; however its contribution to the GDP is a mere 14%.
Nearly 81 million hectares of India's land is desertified, threatening the food security. The
overgrazing of land and changing climatic patterns are exacerbating the situation. As more land
becomes unusable, the food security of the Indian population is increasingly endangered.
Being the second most populous country in the world, India faces a critical challenge of ensuring
adequate food availability. The recent GHI (Global Hunger Index) rating of 2013 puts India at
16th position amongst the 120 developing nations covered. Compared to the global average of
13.8, the hunger index in India has a value of 21.3. Child malnutrition (under 5 years of age) in
India stands at 44%, much higher than neighbouring countries like Pakistan, Bangladesh and
many African countries.
Critical Challenges faced by Indian Agriculture
Rising urban and declining rural population:The Indian population is estimated to
reach almost 1.5 billion by 2030. It is expected that the Indian agriculture sector has to
produce 355 million tonnes of food grains by 2030 in order to meet the growing
demand. However, a critical challenge faced by the country is the reduction in
agricultural workforce. The percentage share of rural population has consistently
declined from 75% in 1991 to 67% in 2014. This would lead to an increased pressure to
increase agriculture productivity to feed the growing population.
l
The need of Agrochemicals for
food and nutritional security3
Figure 2: Indian Rural-Urban population comparison
1991 2001 2011 2014 (E)
25%
28%
32%
33%
75%
72%
68% 67%
Urban Population (%) Rural Population (%)
Source: Census of India 2011, Tata Strategic Estimates
Knowledge and Strategy Partner
13
Knowledge and Strategy Partner
12
Increasing shift towards animal products: With rising disposable income, the Indian
food consumption pattern is witnessing a shift towards livestock and poultry
products. This is reflected from the fact that ~37% of agricultural output growth over
2005-2011 came from animal products (milk, meat, fish, eggs). On the other hand
fruits and vegetables contributed 23% of growth while cereals resulted in 14%
growth.
This poses an increasing burden to raise the agriculture productivity as it is leading to a
shift from direct to indirect feedgrain consumption. It is estimated that 1kg poultry
meat requires 2-3 kg of feedgrain, 1 kg pork requires 4-5 kg of feedgrain while 1kg of
beef would require 5-10 kg of feedgrain consumption. With limited agriculture
resources this leads to increasing concerns for food security.
l
Decreasing farm size: The average farm size is India has declined by almost 50% from
2.28 ha in 1970s to 1.16 ha (2010-11). 80% of farm land is classified as small or
marginal. The 2011 Census of India indicates that 68% of farms are less than two acres
in size and 95% are less than five acres in terms of owned holdings.While the average
size of landholding is decreasing (also fragmenting) the number of operational
holdings is increasing leading to poor harvest and low incomes for the farmers.
l
Figure 3: Per capita consumption growth in Animal Products
Reduction in arable land: The amount of per capita arable land in India has
consistently declined from ~0.34 ha in 1950s to ~0.15 ha in 2000s. With rising
population it is further expected to reduce to ~ 0.07 ha by 2030.
India has 16,000 sq. km of total cropped area during 10 years from 2000-01 to 2010-
11. During the same period land under urban use increased by 24,000 sq. km, at the
expense of arable land. This has put immense pressure on the current available arable
land for the food and nutritional needs of the population.
l
Figure 5: Average size of landholdings (ha)
1%2%
3%
8%
2%
5%
12%
18%
Milk Fish Eggs Poultry
1994-2005 2005-2010
Source: Industry reports, Analysis by Tata Strategic
Figure 4: Per capita arable land (ha)
0.34
0.15
0.08
0.07
0.4
0.3
0.2
0.1
0
1951 2001 2025 2030
Source: Industry reports, Analysis by Tata Strategic
Source: Agricultural Census, Analysis by Tata Strategic
2.28
1.84
1.55
1.33
1.16
2.5
2
1.5
1
0.51970-71 1980-81 1990-91 2000-01 2010-11
Hecta
res
Knowledge and Strategy Partner
13
Knowledge and Strategy Partner
12
Increasing shift towards animal products: With rising disposable income, the Indian
food consumption pattern is witnessing a shift towards livestock and poultry
products. This is reflected from the fact that ~37% of agricultural output growth over
2005-2011 came from animal products (milk, meat, fish, eggs). On the other hand
fruits and vegetables contributed 23% of growth while cereals resulted in 14%
growth.
This poses an increasing burden to raise the agriculture productivity as it is leading to a
shift from direct to indirect feedgrain consumption. It is estimated that 1kg poultry
meat requires 2-3 kg of feedgrain, 1 kg pork requires 4-5 kg of feedgrain while 1kg of
beef would require 5-10 kg of feedgrain consumption. With limited agriculture
resources this leads to increasing concerns for food security.
l
Decreasing farm size: The average farm size is India has declined by almost 50% from
2.28 ha in 1970s to 1.16 ha (2010-11). 80% of farm land is classified as small or
marginal. The 2011 Census of India indicates that 68% of farms are less than two acres
in size and 95% are less than five acres in terms of owned holdings.While the average
size of landholding is decreasing (also fragmenting) the number of operational
holdings is increasing leading to poor harvest and low incomes for the farmers.
l
Figure 3: Per capita consumption growth in Animal Products
Reduction in arable land: The amount of per capita arable land in India has
consistently declined from ~0.34 ha in 1950s to ~0.15 ha in 2000s. With rising
population it is further expected to reduce to ~ 0.07 ha by 2030.
India has 16,000 sq. km of total cropped area during 10 years from 2000-01 to 2010-
11. During the same period land under urban use increased by 24,000 sq. km, at the
expense of arable land. This has put immense pressure on the current available arable
land for the food and nutritional needs of the population.
l
Figure 5: Average size of landholdings (ha)
1%2%
3%
8%
2%
5%
12%
18%
Milk Fish Eggs Poultry
1994-2005 2005-2010
Source: Industry reports, Analysis by Tata Strategic
Figure 4: Per capita arable land (ha)
0.34
0.15
0.08
0.07
0.4
0.3
0.2
0.1
0
1951 2001 2025 2030
Source: Industry reports, Analysis by Tata Strategic
Source: Agricultural Census, Analysis by Tata Strategic
2.28
1.84
1.55
1.33
1.16
2.5
2
1.5
1
0.51970-71 1980-81 1990-91 2000-01 2010-11
Hecta
res
Knowledge and Strategy Partner
15
Knowledge and Strategy Partner
14
An increase in the number of fragmented landholdings has led to more landholdings
but a decrease in the operating size of farms. Irrigation difficulties and restrictions in
crop variety due to small size impact the productivity. Hence, there is a need to make
optimum utilization of the limited available land.
Per hectare yield in India lower than the rest of the world: Per hectare yield in India is
amongst the lowest in the world. Compared to global average of 4tonnes/ha the yield
in India stands at 3 tonnes/ha. Developed countries like USA, UK, France and Germany
are able to achieve higher per hectare yields than India due to the extensive and
judicious use of agrochemicals. This calls for wise and balanced application of
agrochemicals in a sustainable and environment friendly manner and simultaneously
ensuring food security for the nation.
lBel
gium
Net
herla
nds
Fra
nce
Ger
man
y/U.K
./USA
Chi
na
Indo
nesia
Ban
glad
esh
Sri/
Lank
a
Wor
ld
Bra
zil
Pak
ista
n
Indi
a
Source : Industry reports, Analysis by Tata Strategic
10
9
7.5
76.5
54.5
4 4 3.8
3 3
Figure 6 : Yield comparison (Tonnes/ha)
Increasing Pest Attacks: The total number of pests and serious pests for major crops
has increased significantly from 1940s. For instance, the number of harmful pests in
rice has increased from 10 to 17 andsimilarly there has been an increase in number of
harmful pests from 2 to 19 in case of wheat. The increased loss of crops to pests poses
a serious threat and highlights the importance of agrochemicals for ensuring food
security.
l
Figure 7: Crop wise pests
Figure 8: Food requirements (Mn. tonnes)
This will lead to an increase in demand for food grains. The current requirement of
rice, wheat and coarse cereals is 55 million tons which is expected to increase to 62
million tons after the introduction of the Bill. Decreasing arable land, increased pest
attacks, lower yields and farm size is going to make this a daunting task. However,
increased usage of agrochemicals on the limited arable land can help in yield
enhancement necessary to meet the increasing demand.
This reflects the need for increasing the crop productivity in India to ensure future
self-sufficiency for a billion-plus population. To address the issue of food and
nutritional security, India needs a robust and modernized agricultural sector with
special emphasis on the applications of agrochemicals.
Crop 1940 At present
Total pests Serious Pests Total pests Serious Pests
Rice
Wheat
Sugarcane
Groundnut
Mustard
Pulses
35
20
28
10
10
35
10
2
2
4
4
6
240
100
240
100
38
250
17
19
43
12
12
34
Source: Industry reports, Analysis by Tata Strategic
65
60
55
50
45
40
35
30Current
Requirement
Estimated
Increase
New
Requirement
Source: Food Security Bill, Business Press, Tata Strategic Analysis
(Estimated increase due to implementation of Food Security Bill)
7
55
62
Food Security Bill increasing food grain requirement: Under the new Food Security
Bill, two-thirds of the population will receive 5kg of food grain every month at
subsidized rates of Rs. 1-3 per kg, with the poorest households continuing to receive
35 kg of food grains per month at subsidized prices.
l
Knowledge and Strategy Partner
15
Knowledge and Strategy Partner
14
An increase in the number of fragmented landholdings has led to more landholdings
but a decrease in the operating size of farms. Irrigation difficulties and restrictions in
crop variety due to small size impact the productivity. Hence, there is a need to make
optimum utilization of the limited available land.
Per hectare yield in India lower than the rest of the world: Per hectare yield in India is
amongst the lowest in the world. Compared to global average of 4tonnes/ha the yield
in India stands at 3 tonnes/ha. Developed countries like USA, UK, France and Germany
are able to achieve higher per hectare yields than India due to the extensive and
judicious use of agrochemicals. This calls for wise and balanced application of
agrochemicals in a sustainable and environment friendly manner and simultaneously
ensuring food security for the nation.
l
Bel
gium
Net
herla
nds
Fra
nce
Ger
man
y/U.K
./USA
Chi
na
Indo
nesia
Ban
glad
esh
Sri/
Lank
a
Wor
ld
Bra
zil
Pak
ista
n
Indi
a
Source : Industry reports, Analysis by Tata Strategic
10
9
7.5
76.5
54.5
4 4 3.8
3 3
Figure 6 : Yield comparison (Tonnes/ha)
Increasing Pest Attacks: The total number of pests and serious pests for major crops
has increased significantly from 1940s. For instance, the number of harmful pests in
rice has increased from 10 to 17 andsimilarly there has been an increase in number of
harmful pests from 2 to 19 in case of wheat. The increased loss of crops to pests poses
a serious threat and highlights the importance of agrochemicals for ensuring food
security.
l
Figure 7: Crop wise pests
Figure 8: Food requirements (Mn. tonnes)
This will lead to an increase in demand for food grains. The current requirement of
rice, wheat and coarse cereals is 55 million tons which is expected to increase to 62
million tons after the introduction of the Bill. Decreasing arable land, increased pest
attacks, lower yields and farm size is going to make this a daunting task. However,
increased usage of agrochemicals on the limited arable land can help in yield
enhancement necessary to meet the increasing demand.
This reflects the need for increasing the crop productivity in India to ensure future
self-sufficiency for a billion-plus population. To address the issue of food and
nutritional security, India needs a robust and modernized agricultural sector with
special emphasis on the applications of agrochemicals.
Crop 1940 At present
Total pests Serious Pests Total pests Serious Pests
Rice
Wheat
Sugarcane
Groundnut
Mustard
Pulses
35
20
28
10
10
35
10
2
2
4
4
6
240
100
240
100
38
250
17
19
43
12
12
34
Source: Industry reports, Analysis by Tata Strategic
65
60
55
50
45
40
35
30Current
Requirement
Estimated
Increase
New
Requirement
Source: Food Security Bill, Business Press, Tata Strategic Analysis
(Estimated increase due to implementation of Food Security Bill)
7
55
62
Food Security Bill increasing food grain requirement: Under the new Food Security
Bill, two-thirds of the population will receive 5kg of food grain every month at
subsidized rates of Rs. 1-3 per kg, with the poorest households continuing to receive
35 kg of food grains per month at subsidized prices.
l
Knowledge and Strategy Partner
17
Knowledge and Strategy Partner
16
Overview
The Indian crop protection industry is estimated to be USD 4.25 billion in FY14
and is expected to grow at a CAGR of 12% to reach USD 7.5 billion by FY19. Exports
currently constitute almost 50% of Indian crop protection industry and are
expected to grow at a CAGR of 16% to reach USD 4.2 billion by FY19, resulting in
60% share in Indian crop protection industry. Domestic market on the other hand
would grow at 8% CAGR, as it is predominantly monsoon dependent, to reach
USD 3.3 billion by FY19. Globally, India is fourth largest producer of crop
protection chemicals, after United States, Japan & China.The crop protection
companies in India can be categorized into three types Multi-National, Indian
including public sector companies and small sector units.
Industry structure and Competitive landscape
The Indian crop protection industry is dominated by generic products with more than 80% of
molecules being non-patented. This results in very low entry barriers for the industry. Hence,
strong distribution network, appropriate pricing, brand recall and dealer margins are some of
the critical factors for companies to succeed. Crop protection chemicals are manufactured as
technical grades and converted into formulations for agricultural use.
The Indian Agrochemical value chain comprises of technical grade manufacturers, formulators
producing the end products, distributors and end use customers.According to Pesticide
Monitoring Unit, GOI, there are about 125 technical grade manufacturers, including about 10
multinationals, more than 800 formulatorsand over 145,000 distributors in India.More than60
technical grade pesticides are being manufactured indigenously.
Indian Agrochemical market4
Figure 9: Indian Crop Protection Market (USD Billion)
Figure 10: Agrochemical Value Chain
In India top ten companies control almost 75-80% of the market share (Refer Annexure-I for list
of top agrochemical companies in India). The market share of large players depends primarily on
product portfolio and introduction of new molecules. The market has seen a number of mergers
and acquisitions with large players buying out small manufacturers. Companies are also looking
for strategic alliances and partnerships in order to expand their market reach.
Domestic
Exports
2.25
3.3
2
4.2
TotalUSD 4.25
billion
Source: Industry reports, Analysis by Tata Strategic
FY14 FY19
12%
USD 7.5
billion
16%
8%
Formulators
(~800)
Technical grade
manufacturers
(~125)
Distributors
(~145,000)
End use
customers
Presence of key industry participants across product segments
Company Insecticides Herbicides Fungicides Others
BASF India - Seed treatment
Bayer Crop science Ltd Seed treatment, plant growth regulators
Dhanuka Agritech Limited PGRs, Surfactants
Dow AgroSciences India Pvt. Ltd. Plant Growth Regulator
DuPont Growth Enhancer
Excel Crop Care Limited Seed treatment, Home & Garden
Gharda Chemicals Ltd. Plant growth Regulator
Meghmani Organics Limited Pesticide Intermediates
Monsanto India Ltd. - -
Nagarjuna Agrichem Limited Fertilizers, Micro Nutrients, Liquid Fertilizers,
PI Industries Ltd Speciality Products
Rallis India Rodenticides, Seed treatment
Syngenta India Seed treatment
United Phosphorous Limited Fumigants, Rodenticides
Maize seeds
Figure 11 : Key Industry Players in India
Knowledge and Strategy Partner
17
Knowledge and Strategy Partner
16
Overview
The Indian crop protection industry is estimated to be USD 4.25 billion in FY14
and is expected to grow at a CAGR of 12% to reach USD 7.5 billion by FY19. Exports
currently constitute almost 50% of Indian crop protection industry and are
expected to grow at a CAGR of 16% to reach USD 4.2 billion by FY19, resulting in
60% share in Indian crop protection industry. Domestic market on the other hand
would grow at 8% CAGR, as it is predominantly monsoon dependent, to reach
USD 3.3 billion by FY19. Globally, India is fourth largest producer of crop
protection chemicals, after United States, Japan & China.The crop protection
companies in India can be categorized into three types Multi-National, Indian
including public sector companies and small sector units.
Industry structure and Competitive landscape
The Indian crop protection industry is dominated by generic products with more than 80% of
molecules being non-patented. This results in very low entry barriers for the industry. Hence,
strong distribution network, appropriate pricing, brand recall and dealer margins are some of
the critical factors for companies to succeed. Crop protection chemicals are manufactured as
technical grades and converted into formulations for agricultural use.
The Indian Agrochemical value chain comprises of technical grade manufacturers, formulators
producing the end products, distributors and end use customers.According to Pesticide
Monitoring Unit, GOI, there are about 125 technical grade manufacturers, including about 10
multinationals, more than 800 formulatorsand over 145,000 distributors in India.More than60
technical grade pesticides are being manufactured indigenously.
Indian Agrochemical market4
Figure 9: Indian Crop Protection Market (USD Billion)
Figure 10: Agrochemical Value Chain
In India top ten companies control almost 75-80% of the market share (Refer Annexure-I for list
of top agrochemical companies in India). The market share of large players depends primarily on
product portfolio and introduction of new molecules. The market has seen a number of mergers
and acquisitions with large players buying out small manufacturers. Companies are also looking
for strategic alliances and partnerships in order to expand their market reach.
Domestic
Exports
2.25
3.3
2
4.2
TotalUSD 4.25
billion
Source: Industry reports, Analysis by Tata Strategic
FY14 FY19
12%
USD 7.5
billion
16%
8%
Formulators
(~800)
Technical grade
manufacturers
(~125)
Distributors
(~145,000)
End use
customers
Presence of key industry participants across product segments
Company Insecticides Herbicides Fungicides Others
BASF India - Seed treatment
Bayer Crop science Ltd Seed treatment, plant growth regulators
Dhanuka Agritech Limited PGRs, Surfactants
Dow AgroSciences India Pvt. Ltd. Plant Growth Regulator
DuPont Growth Enhancer
Excel Crop Care Limited Seed treatment, Home & Garden
Gharda Chemicals Ltd. Plant growth Regulator
Meghmani Organics Limited Pesticide Intermediates
Monsanto India Ltd. - -
Nagarjuna Agrichem Limited Fertilizers, Micro Nutrients, Liquid Fertilizers,
PI Industries Ltd Speciality Products
Rallis India Rodenticides, Seed treatment
Syngenta India Seed treatment
United Phosphorous Limited Fumigants, Rodenticides
Maize seeds
Figure 11 : Key Industry Players in India
Knowledge and Strategy Partner
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18
State wise distribution of crop protection market
Erstwhile Andhra Pradesh (Seemandhra and Telangana), Maharashtra and Punjab are top three
states contributing to 45% of pesticide consumption in India. Erstwhile Andhra Pradesh is the
leading consumer with 21% share. The top seven states together account for more than 70% of
crop protection chemicals usage in India.
Indian market scenario
Distribution of domestic crop protection market by Product category
The Indian crop protection market is dominated by Insecticides, which form almost 60% of
domestic crop protection chemicals market. The major applications are found in rice and cotton
crops. Fungicides and Herbicides are largest growing segments accounting for 18% and 16%
respectively of total crop protection chemicals market.As the weeds grow in damp and warm
weather and die in cold seasons, the sale of herbicides is seasonal. Rice and wheat crops are the
major application areas of herbicides. Increasing labor costs and labor shortage are key growth
drivers for herbicides. The fungicides find applications in fruits, vegetables and rice. The key
growth drivers for fungicides are shift in agriculture from cash crops to fruits and vegetables and
government support for exports of fruits and vegetables. Biopesticides include all biological
materials organisms, which can be used to control pests. Currently biopesticides constitute only
3% of Indian crop protection market;however they provide significant growth opportunities due
to increasing concerns of safety and toxicity of pesticides, stringent regulations and government
support.
Figure 12: Indian Crop Protection Market split
Figure 14: State wise pesticide consumption
Distribution and Sales Channel
The sales of crop protection chemicals are predominantly in rural areas. Thereforelarge
manufacturers with all India presence use a three-tier sales and distribution network comprising
distributors, wholesalers and retailers for wider market reach. On the other hand, regional
participants cater only to the local markets.Source : Industry reports, Analysis by Tata Strategic
Insecticides
60%
Herbicides
16%
Fungicides
18%
Others, 3%Biopesticides
3%
Figure 13: Major crop protection products
Segment Major Products Main Applications
Insecticides Acephate, Monocrotophos, Cypermethrin Cotton, Rice
Fungicides Mancozeb, Copper Oxychloride, Ziram Fruits, Vegetables, Rice
Herbicides Glyphosate, Isoproturan, 2,4-D Rice, Wheat
Bio-pesticides Spinosyns, neem based Rice, Maize, Tobacco
Others Zinc Phosphide, Aluminum Phosphide Stored produce
Erstwhile AP
21%
Maharashtra
13%
Punjab, 11%
Uttar Pradesh
10%
West Bengal
8%
MP &
Chattisgarh,
6%
Haryana, 6%
Gujarat, 6%
Karanataka
5%
Bihar, 5%
Tamil
Nadu, 5%Others, 4%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
19
Knowledge and Strategy Partner
18
State wise distribution of crop protection market
Erstwhile Andhra Pradesh (Seemandhra and Telangana), Maharashtra and Punjab are top three
states contributing to 45% of pesticide consumption in India. Erstwhile Andhra Pradesh is the
leading consumer with 21% share. The top seven states together account for more than 70% of
crop protection chemicals usage in India.
Indian market scenario
Distribution of domestic crop protection market by Product category
The Indian crop protection market is dominated by Insecticides, which form almost 60% of
domestic crop protection chemicals market. The major applications are found in rice and cotton
crops. Fungicides and Herbicides are largest growing segments accounting for 18% and 16%
respectively of total crop protection chemicals market.As the weeds grow in damp and warm
weather and die in cold seasons, the sale of herbicides is seasonal. Rice and wheat crops are the
major application areas of herbicides. Increasing labor costs and labor shortage are key growth
drivers for herbicides. The fungicides find applications in fruits, vegetables and rice. The key
growth drivers for fungicides are shift in agriculture from cash crops to fruits and vegetables and
government support for exports of fruits and vegetables. Biopesticides include all biological
materials organisms, which can be used to control pests. Currently biopesticides constitute only
3% of Indian crop protection market;however they provide significant growth opportunities due
to increasing concerns of safety and toxicity of pesticides, stringent regulations and government
support.
Figure 12: Indian Crop Protection Market split
Figure 14: State wise pesticide consumption
Distribution and Sales Channel
The sales of crop protection chemicals are predominantly in rural areas. Thereforelarge
manufacturers with all India presence use a three-tier sales and distribution network comprising
distributors, wholesalers and retailers for wider market reach. On the other hand, regional
participants cater only to the local markets.Source : Industry reports, Analysis by Tata Strategic
Insecticides
60%
Herbicides
16%
Fungicides
18%
Others, 3%Biopesticides
3%
Figure 13: Major crop protection products
Segment Major Products Main Applications
Insecticides Acephate, Monocrotophos, Cypermethrin Cotton, Rice
Fungicides Mancozeb, Copper Oxychloride, Ziram Fruits, Vegetables, Rice
Herbicides Glyphosate, Isoproturan, 2,4-D Rice, Wheat
Bio-pesticides Spinosyns, neem based Rice, Maize, Tobacco
Others Zinc Phosphide, Aluminum Phosphide Stored produce
Erstwhile AP
21%
Maharashtra
13%
Punjab, 11%
Uttar Pradesh
10%
West Bengal
8%
MP &
Chattisgarh,
6%
Haryana, 6%
Gujarat, 6%
Karanataka
5%
Bihar, 5%
Tamil
Nadu, 5%Others, 4%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
21
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20
Companies with PAN India presence have 400-1000 distributors supplying to 25,000-30,000
retailers. Stocks are kept in warehouses or depots from where they are supplied to distributors.
To leverage on local companies distribution network several MNCs have tied-up synergistically
for co-distribution or co-marketing The mid-size and small scale companies operate through
direct marketing of their products. Most companies also perform field demonstrations to
increase farmer awareness and promote their products.
Stringent regulations: Stringent environment regulations across the world are
increasing the cost of developing new products and simultaneously delaying the
introduction of new products in the market. For instance, in the European Union any
agrochemical product if found to be mutagenic, carcinogenic or endocrine disruptor
would not achieve registration or re-registration irrespective of the level of exposure
generated. It takes almost nine to ten years to bring a new product.
Low focus on R&D by domestic manufacturers due to high costs: The industry is facing
a serious challenge owing to the rising R&D costs. It takes almost USD 250 million in
research and development to introduce a new product in the market. This prevents
the companies to invest in R&D activities and focus more on the generic products
which require low investments in research and development.
Lack of education and awareness among farmers:It is important to educate the
farmers about the appropriate kind of pesticide, its dosage and quantity and
Challenges faced by the Indian Crop Protection Industry
l
l
l
application frequency. However it is not easy to reach the farmers owing to
infrastructure issues, regional languages and dialects. The main point of contact
between the farmers and the manufacturers are the retailers who don't have much of
a technical experience and are unable to provide a proper product understanding to
the farmers. It is also very difficult for the farmers to convey their needs effectively to
the manufacturers.
Need for efficient distribution systems:The large number of end users and the market
being predominantly generic in nature makes a strong and efficient distribution
network essential for the crop protection market. However, the industry is facing
problems due to supply chain inefficiencies and inadequate infrastructure which
results in post-harvest losses estimated at INR 45,000 crore every year, thereby
impacting the farmers. The lack of efficient distribution system also makes it difficult
for the agrochemical companies to reach the farmers to promote their products and
educate them about their usage and benefits.
Non-genuineproducts: There is a significant share of non-genuinepesticides which
can be counterfeit, spurious, adulterated or sub-standard. According to industry
estimates the non-genuine pesticides could account for upto40% of the pesticides
sold in India in FY13. These products are inferior formulations which are unable to kill
the pests or kill them efficiently.Some such products do perform but leave by-
products which may significantly harm the soil and environment. The damage
through such products is multifold. Apart from crop loss and damage to soil fertility,
use of non-genuine products leads to loss of revenue to farmers, agrochemical
companies and government.
Some of the key reasons for use of non-genuine products are lack of awareness
amongst the farmers, difficulty in differentiating between genuine and non-genuine
products, supply chain inefficiencies, law enforcement challenges and influencing
power of distributors/retailers.
In association with FICCI, TATA Strategic has taken up a study focusing on this subject.
Long gestation period for new products: It takes almost 10 years to bring a new
molecule into the market. Even for the generic products, it can take up to 5 years to get
the product registered. The regulatory bodies do not have adequate resources and
infrastructure to execute timely registration of products. Sometimes the rules are not
clearly defined creating interpretation challenges for the regulatory bodies.,leading
to confusions thereby adding to the complexities for the crop protection chemical
companies.
l
l
l
Figure 15: Crop protection distribution network
Source: Tata Strategic Analysis
In-house formulators
Formulators Retailers/Dealers Distributors
Retailers
Technical Grade manufactures
End usersRetailers
Distributors
Knowledge and Strategy Partner
21
Knowledge and Strategy Partner
20
Companies with PAN India presence have 400-1000 distributors supplying to 25,000-30,000
retailers. Stocks are kept in warehouses or depots from where they are supplied to distributors.
To leverage on local companies distribution network several MNCs have tied-up synergistically
for co-distribution or co-marketing The mid-size and small scale companies operate through
direct marketing of their products. Most companies also perform field demonstrations to
increase farmer awareness and promote their products.
Stringent regulations: Stringent environment regulations across the world are
increasing the cost of developing new products and simultaneously delaying the
introduction of new products in the market. For instance, in the European Union any
agrochemical product if found to be mutagenic, carcinogenic or endocrine disruptor
would not achieve registration or re-registration irrespective of the level of exposure
generated. It takes almost nine to ten years to bring a new product.
Low focus on R&D by domestic manufacturers due to high costs: The industry is facing
a serious challenge owing to the rising R&D costs. It takes almost USD 250 million in
research and development to introduce a new product in the market. This prevents
the companies to invest in R&D activities and focus more on the generic products
which require low investments in research and development.
Lack of education and awareness among farmers:It is important to educate the
farmers about the appropriate kind of pesticide, its dosage and quantity and
Challenges faced by the Indian Crop Protection Industry
l
l
l
application frequency. However it is not easy to reach the farmers owing to
infrastructure issues, regional languages and dialects. The main point of contact
between the farmers and the manufacturers are the retailers who don't have much of
a technical experience and are unable to provide a proper product understanding to
the farmers. It is also very difficult for the farmers to convey their needs effectively to
the manufacturers.
Need for efficient distribution systems:The large number of end users and the market
being predominantly generic in nature makes a strong and efficient distribution
network essential for the crop protection market. However, the industry is facing
problems due to supply chain inefficiencies and inadequate infrastructure which
results in post-harvest losses estimated at INR 45,000 crore every year, thereby
impacting the farmers. The lack of efficient distribution system also makes it difficult
for the agrochemical companies to reach the farmers to promote their products and
educate them about their usage and benefits.
Non-genuineproducts: There is a significant share of non-genuinepesticides which
can be counterfeit, spurious, adulterated or sub-standard. According to industry
estimates the non-genuine pesticides could account for upto40% of the pesticides
sold in India in FY13. These products are inferior formulations which are unable to kill
the pests or kill them efficiently.Some such products do perform but leave by-
products which may significantly harm the soil and environment. The damage
through such products is multifold. Apart from crop loss and damage to soil fertility,
use of non-genuine products leads to loss of revenue to farmers, agrochemical
companies and government.
Some of the key reasons for use of non-genuine products are lack of awareness
amongst the farmers, difficulty in differentiating between genuine and non-genuine
products, supply chain inefficiencies, law enforcement challenges and influencing
power of distributors/retailers.
In association with FICCI, TATA Strategic has taken up a study focusing on this subject.
Long gestation period for new products: It takes almost 10 years to bring a new
molecule into the market. Even for the generic products, it can take up to 5 years to get
the product registered. The regulatory bodies do not have adequate resources and
infrastructure to execute timely registration of products. Sometimes the rules are not
clearly defined creating interpretation challenges for the regulatory bodies.,leading
to confusions thereby adding to the complexities for the crop protection chemical
companies.
l
l
l
Figure 15: Crop protection distribution network
Source: Tata Strategic Analysis
In-house formulators
Formulators Retailers/Dealers Distributors
Retailers
Technical Grade manufactures
End usersRetailers
Distributors
Knowledge and Strategy Partner
23
Knowledge and Strategy Partner
22
Opportunities and Key Growth Drivers for Indian Crop Protection Market
Export Opportunities: The export of pesticides from India hasseen a strong growth
over the last few years.Globally, India is the thirteenth largest exporter of pesticides.
Most of the exports are off-patent products. The major exports from India happen to
Brazil, USA, France and Netherlands. The key growth drivers are India's capability in
low cost manufacturing, availability of technically trained manpower, seasonal
domestic demand, overcapacity (Production capacity of 1,50,00 MT against
production of 85,000 MT in FY13), better price realization globally and strong
presence in generic pesticide manufacturing (India has process technologies for more
than 60 generic molecules).
Post Tsunami Japanese companies are trying to build manufacturing capacities
outside Japan to derisk themselves. The Japanese companies are highly particular
about confidentiality and intellectual property protection and some of them have
seen opportunity in India and are now creating a base here.However, complex
registration procedures pose a major challenge for the Indian crop protection
chemicals export.
l
Agrochemicals worth USD 6.3 billion are expected to be taken off-patent list by 2020.
Globally, percentage share of generic products have increased from 33% in 2000 to
52% in 2013. The patented products share has reduced from 30% to 22% in the same
period while the rest is constituted by proprietary off-patent products.
This provides significant export opportunities for Indian companies which have
expertise in generic segment. Top 6 importing nations constitute only 44% of India's
agrochemical exports. This also indicates export potential for Indian companies. In
order to build a strong export base, companies should set up marketing offices in
association with domestic players in export geographies. Companies can look for
strategic alliances with local companies to expand their marketing and distribution
reach. Companies can also explore merger and acquisition opportunities to increase
their global presence.
Figure 16: Indian Agrochemical Exports, FY10-FY14
Figure 17: Opportunities in generic products
Growth in herbicides and fungicides: Labor shortage, rising labor costs and growth in
GM crops has led to growth in the use of herbicides. The herbicide consumption in
India currently stands at 0.3 USD billion and is expected to grow at a CAGR of 15% over
the next five years to reach 0.6 USD billion by FY18. On the other hand the fungicide
industry in India has grown due to the growth in Indian horticulture industry, which
has grown at a CAGR of 7.5% over the last five years.
Low consumption of pesticides in India:The per hectare consumption of pesticides in
India is amongst the lowest in the world and currently stands at 0.6 kg/ha. On the
other hand consumption in developed nations ranges from 5-7 kg/ha whereas at 13
kg/ha China is almost 20-30 times as compared to India. In order to increase yield and
ensure food security for its enormous population agrochemicals penetration in India
is bound to go up.
l
l
Figure 18: Pesticide consumption (Kg/ha) comparison
CAGR 17.5%
Source : Trademap Statistics, Tata Strategic Analysis
1.051.15
1.38
1.66
2.00
FY10 FY11 FY12 FY13 FY14
India Agrochemicals Exports (USD Bn.)
1.3
0.9
1.2
1.6
0.4
0.7
0.2
2014 2015 2016 2017 2018 2019 2020
Source: Industry reports, Analysis by Tata Strategic
Agrochemicals going off-patent, 2014-2020 (USD billion)
0.75
55
7 7
12
13
17
Indi
a
UK
Fra
nce
Kor
ea
USA
Japa
n
Chi
na
Taiw
an
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
23
Knowledge and Strategy Partner
22
Opportunities and Key Growth Drivers for Indian Crop Protection Market
Export Opportunities: The export of pesticides from India hasseen a strong growth
over the last few years.Globally, India is the thirteenth largest exporter of pesticides.
Most of the exports are off-patent products. The major exports from India happen to
Brazil, USA, France and Netherlands. The key growth drivers are India's capability in
low cost manufacturing, availability of technically trained manpower, seasonal
domestic demand, overcapacity (Production capacity of 1,50,00 MT against
production of 85,000 MT in FY13), better price realization globally and strong
presence in generic pesticide manufacturing (India has process technologies for more
than 60 generic molecules).
Post Tsunami Japanese companies are trying to build manufacturing capacities
outside Japan to derisk themselves. The Japanese companies are highly particular
about confidentiality and intellectual property protection and some of them have
seen opportunity in India and are now creating a base here.However, complex
registration procedures pose a major challenge for the Indian crop protection
chemicals export.
l
Agrochemicals worth USD 6.3 billion are expected to be taken off-patent list by 2020.
Globally, percentage share of generic products have increased from 33% in 2000 to
52% in 2013. The patented products share has reduced from 30% to 22% in the same
period while the rest is constituted by proprietary off-patent products.
This provides significant export opportunities for Indian companies which have
expertise in generic segment. Top 6 importing nations constitute only 44% of India's
agrochemical exports. This also indicates export potential for Indian companies. In
order to build a strong export base, companies should set up marketing offices in
association with domestic players in export geographies. Companies can look for
strategic alliances with local companies to expand their marketing and distribution
reach. Companies can also explore merger and acquisition opportunities to increase
their global presence.
Figure 16: Indian Agrochemical Exports, FY10-FY14
Figure 17: Opportunities in generic products
Growth in herbicides and fungicides: Labor shortage, rising labor costs and growth in
GM crops has led to growth in the use of herbicides. The herbicide consumption in
India currently stands at 0.3 USD billion and is expected to grow at a CAGR of 15% over
the next five years to reach 0.6 USD billion by FY18. On the other hand the fungicide
industry in India has grown due to the growth in Indian horticulture industry, which
has grown at a CAGR of 7.5% over the last five years.
Low consumption of pesticides in India:The per hectare consumption of pesticides in
India is amongst the lowest in the world and currently stands at 0.6 kg/ha. On the
other hand consumption in developed nations ranges from 5-7 kg/ha whereas at 13
kg/ha China is almost 20-30 times as compared to India. In order to increase yield and
ensure food security for its enormous population agrochemicals penetration in India
is bound to go up.
l
l
Figure 18: Pesticide consumption (Kg/ha) comparison
CAGR 17.5%
Source : Trademap Statistics, Tata Strategic Analysis
1.051.15
1.38
1.66
2.00
FY10 FY11 FY12 FY13 FY14
India Agrochemicals Exports (USD Bn.)
1.3
0.9
1.2
1.6
0.4
0.7
0.2
2014 2015 2016 2017 2018 2019 2020
Source: Industry reports, Analysis by Tata Strategic
Agrochemicals going off-patent, 2014-2020 (USD billion)
0.75
55
7 7
12
13
17
Indi
a
UK
Fra
nce
Kor
ea
USA
Japa
n
Chi
na
Taiw
an
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
25
Knowledge and Strategy Partner
24
Effective Marketing and distribution: Effective marketing and distribution and
increased reach to farmers is a key growth driver for the agrochemical companies.
However, rising sales of non-genuineagrochemical products has impacted the
industry image. Companies are already investing in marketing activities to educate
l
the farmers and increase their customer base. However, some additional strategies
which can be adopted by companies are: Apart from educating the end users
companies should also work on influencing the distributors and retailers. Pesticide
distributors and retailers play a critical role in agrochemical supply chain. Often the
farmer decision to purchase a pesticide is guided by the distributors and retailers.
Hence it is not only critical for companies to promote their products amongst the
retailers/distributors but also incentivize them to sell genuine products. Industry
bodies also need to invest in overall "Image improvement" of the industry. Companies
should come together and develop strategies to promote the use of genuine products
amongst the end users. Joint efforts should be undertaken to educate farmers about
pesticide use in a judicious and appropriate manner. Benefits of Bio-pesticides also
need to be promoted to encourage shift from the traditional products.
Leverage on IT and Telecommunications: Companies should leverage on IT and
Telecommunication infrastructure. Apart from Television and Radio, companies can
capitalize on SMS services to be in touch with distributors' retailers and farmers. IT
services can be used to provide technical and operational guidance. Portals in regional
languages can help build connect and enduring relationships with farmers.
l
Key imperatives for Agrochemical Companies, Govt. and
Regulatory bodies
Agrochemicals can play a crucial role in overcoming the challenges faced by Indian agriculture
sector, thereby ensuring food and nutritional security for the nation. This can be achieved by
developing innovative products, expand the product/service offering and promoting the use of
agrochemicals amongst the end users, i.e. the farmers. The low consumption levels provide a
significant opportunity for agrochemical companies to increase their market penetration. Some
of the key imperatives are:
Product innovation: Product innovation needs to capture emerging market trends and match
international standards. Companies in agro-chemical space can focus on the following:
Companies need to innovate products which can improve the effectiveness of
pesticide usage as well as reduce the negative impacts on environment. With the
advent of GM crops and increasing popularity of bio-pesticides, environment
friendliness of the agro-chemicals could be a differentiating factor.
Indian companies would need to increase focus on developing new active ingredients
rather than just focusing on generics. Indian companies usually spend 1-2% of their
turnover on R&D as compared to global companies which spend 5-10% of their
turnover on R&D.
Indian companies can also look for strategic tie-ups/ alliance with large MNCs for
contract manufacturing if they lack the ability to invest in developing new molecules.
In line with global trend, Indian companies can look for opportunities to expand their
presence in value chain by incorporating seeds in their product portfolio. Globally it
has been witnessed that EBITDA and PAT margins have increased as companies have
integrated into seed manufacturing. This would help in increasing the reach amongst
the farmers.
End to end farmer solution: Companies should look for opportunities to provide a
comprehensive agri offering to the farmer. A one stop solution for the farmer ranging from
agriculture and farm inputs to procurement, storage and distribution services on the output side
would help companies develop sustainable business models. End to end solution not only
creates a better reach with the farmers but will also turns threats like genetically modified seeds,
organic farming etc. into opportunities. Many companies are already following the integrated
model. While it has helped the farmers to improve their yield, get technical assistance and better
value for their produce, it has also helped companies to strengthen their presence amongst the
farmers.
l
l
l
l
The Way Forward5
Figure 19: Indicative end to end farmer solution
Procurement
Animal feed
& Fuel
Logistics & Storage
Crop Protection
& Seeds
Contract FarmingFertilizers
Farm A
dvisory, Farm S
ervices, Finance
INP
UT
SID
E
OU
TP
UT
SID
E
Farmer
Knowledge and Strategy Partner
25
Knowledge and Strategy Partner
24
Effective Marketing and distribution: Effective marketing and distribution and
increased reach to farmers is a key growth driver for the agrochemical companies.
However, rising sales of non-genuineagrochemical products has impacted the
industry image. Companies are already investing in marketing activities to educate
l
the farmers and increase their customer base. However, some additional strategies
which can be adopted by companies are: Apart from educating the end users
companies should also work on influencing the distributors and retailers. Pesticide
distributors and retailers play a critical role in agrochemical supply chain. Often the
farmer decision to purchase a pesticide is guided by the distributors and retailers.
Hence it is not only critical for companies to promote their products amongst the
retailers/distributors but also incentivize them to sell genuine products. Industry
bodies also need to invest in overall "Image improvement" of the industry. Companies
should come together and develop strategies to promote the use of genuine products
amongst the end users. Joint efforts should be undertaken to educate farmers about
pesticide use in a judicious and appropriate manner. Benefits of Bio-pesticides also
need to be promoted to encourage shift from the traditional products.
Leverage on IT and Telecommunications: Companies should leverage on IT and
Telecommunication infrastructure. Apart from Television and Radio, companies can
capitalize on SMS services to be in touch with distributors' retailers and farmers. IT
services can be used to provide technical and operational guidance. Portals in regional
languages can help build connect and enduring relationships with farmers.
l
Key imperatives for Agrochemical Companies, Govt. and
Regulatory bodies
Agrochemicals can play a crucial role in overcoming the challenges faced by Indian agriculture
sector, thereby ensuring food and nutritional security for the nation. This can be achieved by
developing innovative products, expand the product/service offering and promoting the use of
agrochemicals amongst