Vision 2020: Growth Through Sustainable Farming
Date:12-25-2019
Another calendar year is ending, and this is a perfect opportunity to look back at the year gone by as well chart out the roadmap for that coming up. After a few troubled years, the agrochemicals market is picking pace, and that brings the biggest good news for the industry.
According to estimates, the pesticide market is projected to grow at a CAGR of 8.3 per cent during 2018 - 2023 and reach INR 292.9 billion by 2023. As the industry grows, it also becomes more accountable to ensure that the farming practices are sustainable and impart necessary education on the farmers so that agrochemicals. The 2020 goal for the industry is to attain sustained growth by promoting sustainable farming practices.
Industry Growth Outlook 2020
The total available arable land per capita has been steadily reducing due to increasing urbanization and is expected to reduce further in the coming years. However, the rising population levels will keep food demand high and will increase in the coming years. In order to increase agricultural yield per hectare of available land, pesticides will play an important role.
According to the Ministry of Agriculture, in 2018-2019 agricultural calendar year, farmers cultivating in 45,043 thousand hectares, 65 per cent of the total cultivated land in India, use either chemical or bio-pesticide or both. At the same time, the penetration of pesticides in India is significantly lower than other major countries which suggests that the market for pesticides has a huge room for future growth.
Government’s initiatives of extending credit facilities to farmers in the rural areas are likely to provide a strong boost as increasing availability and low-interest rates of farm loans will encourage farmers to invest in agro-inputs like seeds, machinery and pesticides to improve crop yields – that the number of sale points for pesticides across India reached a high of 237,083 in 2017-18 is a testimony to the fact.
At the same time, government and private initiatives to increase farmers’ awareness of pesticides is expected to empower them with the knowledge of using the right kind and amount. Combining this with tech interventions such as precision farming will further improve the outcome and hence, will be more beneficial to the farming community.
Strategies to Beat the Challenges
The rising levels of pest attack from unknown quarters have made the safety of crops a concern to both farmers and the agrochemical industry. According to the ministry estimates, the number of sale points for the distribution of pesticides is likely to be 200,129 in 2018-19 while the amount of cultivable land using chemical or bio-pesticide or both have dropped from 62,247 thousand hectares in 2017-18.
Only educating the farmers will not be enough to tide this – companies have to boost their investment in research and development of new molecules and compounds that are friendly to the needs of all quarters. Interestingly, while most Indian companies invest 1-2 per cent of their revenue for R&D efforts., multinationals invest 8-10 per cent.
Therefore, domestic agrochemical market will continue to face an uneven competition unless they ramp up investment in R&D to get an edge. It is also an effective way to forge new collaborations with international agrochemical companies and expand one’s offerings. This also creates an opportunity for contract manufacturing and research for Indian players as it has one of the largest pools of technically skilled labour.
Agrochemical companies may also consider collaborating with tech companies to weave in precision farming and other advanced approaches will certainly up the game for the industry. This will also help to prevent the continuous threat of counterfeit products in the market – upgrading the product at a regular interval is a sure way to keep such manufacturers at a bay.
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