Manufacturing Pesticide for Export, Export Norms to be Relaxed in India

The norms for pesticides exports and manufacturing of pesticides through foreign technology from India may be liberalized.

According to official sources, the liberalization is aimed at making hub for manufacturing pesticides especially those through buying the technology from foreign companies. After manufacturing of those high end pesticides, these pesticides will be directly exported out of India. These pesticides will not be marketed at all into the domestic India market.

Thus as per the proposal of liberalization, these products will not be put through stringent inspection norms as regards to the quality and procedures. However factories engaged in such technology transfer from overseas and manufacturing in India will have to comply with the safety, environmental norms and labour standards.

A discussion has already taken place between the ministries of agriculture and chemicals and fertilizer with the Ministry of Commerce.

A similar endeavour has also been taken for export of imported processed foods.

While the exports of such product will import the processed food, they will only export it and not market it in the domestic market. Thus these products will not be subjected to stringent inspection of food standards in India.

India is one of the largest producers of pesticides in Asia. In value terms the size of the Indian pesticide industry alone was $3.8 billion in the year 2011 that producers even those pesticides, which are banned in the developed countries.

Key destination markets for Indian exports of agrochemicals are USA, UK, France, Netherlands, Belgium, Spain, South Africa, Bangladesh, Malaysia and Singapore. India is one of the most dynamic generic pesticide manufacturers in the world with more than 60 technical grade pesticides being manufactured indigenously by 125 producers consisting of large and medium scale enterprises (including about 10 multinational companies) and more than 500 pesticide formulators spread over the country.

However, the industry seems to financially constrained, said official sources mainly due to rising costs of inputs, governmental duties and taxes, and the cost of capital. There are also high rates of excise duty both on intermediates and finished products, and excise and sales tax account for nearly 20% of the cost of pesticides.

The pesticide industry is a part of the chemical industry. Reportedly, the global turnover of the chemical industry is more than three trillion US dollars.

The Indian Chemical Industry ranks 12 by volume in the world production of chemicals. With the current size of approximately $108 billion, the Indian chemical industry accounts for about 3% of the global chemical industry.

By 2017, accordingly to the Planning Commission of India, it could reach the size of $224 billion or $290 billion (about 6% of global industry). Indian chemical industry accounts for approximately 7% of Indian GDP and the share of industry i national exports is around 11%. In terms of volume, India is the third largest producer of chemicals in Asia, after China and Japan.


Source: Agropages 

'Increasing Farm Production the Only Long-Term Solution to Food Security World Food Day Focuses on “Sustainable Food Systems for Food Security & Nutrition”

Agriculture and Food Processing Industries Minister, Shri Sharad Pawar on October 16, 2013 emphasized that the only long-term solutions to ensuring food and nutrition security lay in increasing farm production. 

In his message on the World Food Day, the Minister also called for promoting sustainable food systems. Since sustainability of the farm sector depends to a great degree on the performance of small and marginal farmers, the Government has taken a number of initiatives keeping in view these farmers and other beneficiaries especially women and children, the Minister has stated. 

“World Food Day is observed all over the world every year on October 16 to mark the founding of the Food & Agriculture Organization of the United Nations. The basic idea of observing this Day is to raise public awareness about the plight of the hungry and malnourished people all over the world and to encourage all concerned to take concrete action to tackle and overcome the menace of hunger. The theme selected for World Food Day this year is “Sustainable Food Systems for Food Security and Nutrition”. 

“The only long term solution to ensuring food and nutritional security in the country lies in increasing production and productivity in the agriculture sector with diverse and integrated farming systems to provide nutritious diets to each and every citizen. Rapid industrialisation and urbanisation in the country has reduced the availability of natural resources such as land and water for growing food. It is therefore imperative to utilize the limited resources available for sustainable supply of food to the ever increasing population of the country through efficient and effective policies. While ensuring the sustainability of our food systems, we have to not only produce nutritious food for our present population but also protect the capacity to feed the future generations. Sustainable food systems require a commitment from food producers as well as food consumers to use resources efficiently at every stage – getting the most out of every drop of water, inch of land, grain of fertilizer and minute of labour. Sustainability can also be improved by turning waste products into valuable fertiliser or energy and also by minimisation of food losses and waste. The future of sustainable agricultural growth and food security in India is dependent to a great degree on the performance of small and marginal farmers. Government of India has accordingly launched a number of schemes and initiatives keeping in view these farmers and other beneficiaries especially women and children. 

“On this day, let us all resolve to use the scarce and limited resources at our disposal to ensure complete eradication of malnutrition and hunger in our country. On this occasion, I urge renewed commitment from all stake holders to ensure food and nutrition security of the people of this country through concerted action for sustainable food systems.” 

Source: Ministry of Agriculture

IFAD and FAO Target Small-Scale Agricultural Projects Facing Challenges

The UN Food and Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD) have launched a new joint project to help developing countries, particularly fragile states, manage public investments in small-scale agriculture more effectively.

The UN food agencies will co-finance the $2.6 million initiative focusing on countries where a lack of strong national governance means development projects can face serious challenges in delivering results.

Up to 15 projects in ten countries will be targeted over a two-year period, with priority given to projects that are already under way but that are encountering difficulties.

FAO’s Investment Centre Division, which leads the Organization’s efforts to generate increased investment in agriculture and rural development, will work with countries to improve their ability to plan and implement investment programs funded by IFAD.

Kevin Cleaver, IFAD Associate Vice-President, Programs, said: “Fragile states host the greatest proportion of poorly performing agriculture projects, and IFAD has found that the major problems consist of weak local institutions and weak local management. This co-financed project will address both the capacity-building and institution-building requirements of these poorly performing projects.”

Laurent Thomas, FAO Assistant Director-General, Technical Cooperation Department, said: “This initiative presents a more strategic approach to collaboration which will enable both UN agencies to better plan and significantly enhance the effectiveness and quality of their services to member countries. It will lead to better results and, ultimately, to a greater impact on the livelihoods of those targeted by the programs.”

IFAD's Executive Board approved a $2 million grant for the project in September 2013, while FAO and participating countries will each add another $300 000 to the initiative.

FAO regularly works with its sister agency through the FAO-IFAD Cooperative Program, which has seen over 300 joint operations worth almost $9 billion between 1977 and 2012.


Source: FAO (http://www.fao.org/news/story/en/item/200906/icode/)

Continuation of ongoing Centrally Sponsored Scheme - National Food Security Mission during 12th Plan period

The Cabinet Committee on Economic Affairs recently gave its approval for continuation of the ongoing Centrally Sponsored Scheme of National Food Security Mission (NFSM) during 12^th Five Year Plan with an allocation of Rs. 12,350 crore.

This would help in increasing additional food grains production of 25 million tonnes consisting of 10 million tonnes of rice, 8 million tonnes of wheat, 4 million tonnes of pulses  and 3 million tonnes of coarse cereals by 2016-17.

The Mission’s main focus will be on cropping systems instead of individual crops and inclusion of coarse cereals through development of Farmer-Producer Organizations (FPOs), creating value chains and providing market linkages.

NFSM would be implemented in 27 States including the North-Eastern and Hill States. The Mission would be implemented in selected districts as per the criteria laid down for NFSM, giving the priority to the districts that have yields lower than the State average.

The outlay for the first two years of the 12^th  Plan is as follows:(Rs. in crore)

Year	Outlay
2012-13	1850.00
2013-14	2250.00

The basic strategy is to promote improved technologies, i.e., adoption of quality seeds, enhancing farm efficiency through improved agronomic practices like line sowing, SRI, direct seeding, soil amendments, integrated nutrient management, integrated pest management, water use efficiency and resource conservation technologies. Proven crop production technologies developed by the National Agricultural 

Research System would be made available to the farmers through a series of planned interventions and financial incentives.

Background:NFSM was launched in 2007-08 with an outlay of Rs. 4,882.48 crore for 11th Plan and succeeded in meeting its objective of increasing food grains production by 20 million tonnes by 2011-12.  The average annual production of about 202.5 million tonnes of food grains during the 10th Plan rose to the level of about 237.5 million tonnes during the 11th Plan.

Source: Ministry of Agriculture

Global Agrochemical Companies Eye India Deals

With billions of dollars worth agrochemical patents expiring by 2020, global players keen to make the most of the situation are looking to buy or tie-up with Indian companies known for their low-cost manufacturing expertise. 

At least $9 billion (about Rs 61,000 crore) worth of patents for more than 50 agrochemical products are expected to be taken off the patent list and manufacturing is likely to move to emerging markets like India. 

First off the mark has been Japan. Its agrochemical firms have already begun fordging alliances with Indian firms. While Sumitomo Chemicals acquired Mumbai- based New Chemi in 2010 for an undisclosed amount, Otsuka Agritechno formed a joint venture in R&D with Insecticides IndiaBSE 3.10%. Another Japanese ISK is conducting field trials of new pesticides with United PhosphorousBSE -0.59% in India. Many Indian manufacturers are also in talks with companies from other regions and deals are likely to be announced soon.

"We see the trend," said Aditya Jhawar, an analyst with the Mumbai-based Espirito Santo Investment Bank. "Global players focus on India for two broad reasons: lower cost of production and environmental issues." He said increasing environmental issues and ban on production on certain products in some countries were pushing manufacturers to look at India, which currently exports over Rs 3,000 Crore worth of agrochemicals every year to the United States, Europe and other regions.

Another advantage that India has over other countries is that its companies offer better data protection. The Rs 13,000 Crore Indian agrochemical sector, which has been growing at 8 to 10% annually,  has about 130 companies making active ingredients and intermediates. Globally, the agrochemical market size is about 45 to 47 billion dollars, with Japanese companies making up a tenth of it. 

Source: Agropages (http://news.agropages.com/News/NewsDetail---10410.htm) 

Farmers Struggle to Adopt Climate-Smart Methods

Preliminary results from a project aimed at helping Malawi, Vietnam and Zambia make the transition to a "climate-smart" approach to agriculture show that some farmers are struggling to adopt the new methods, while others are finding ways to cope well with climate-change problems like late rains.

"To broaden the options available to farmers, we believe that increased investment, coming from both traditional agricultural finance, as well as emerging climate finance such as the Green Climate Fund, may be required to help farmers make the needed transition," said Leslie Lipper, leader of FAO's Economics and Policy Innovations for Climate-Smart Agriculture (EPIC) Programme, which houses the project.

Launched in January 2012, the €5.3-million three-year FAO-EC project promotes a climate-smart agriculture approach in each country, with supporting activities ranging from research to policy support and investment proposals.

Climate-smart agriculture explained

Agriculture and the communities who depend on it for their livelihoods and food security are highly vulnerable to climate change impacts. At the same time agriculture, as a significant producer of greenhouse gases, contributes to global warming.

"Climate-smart agriculture" is an approach that seeks to position the agricultural sector as a solution to these major challenges, prioritizing food security and the adaptation needed to achieve it, while reaping potential mitigation co-benefits.

It involves making changes in farming systems that achieve these multiple goals, as well as in supporting institutions and policies.

African project experience

One of the main activities of the project is identifying which agricultural practices are "climate smart" for specific conditions. 

For example, the project has studied conservation agriculture (CA), which involves reduced tillage, permanent soil cover and crop rotation. The practice has been promoted by the governments of Malawi and Zambia. 

Conservation agriculture can, at least potentially, increase productivity through better soils and help farmers adapt to climate change through better water retention. It also can help mitigate climate change by trapping carbon in the soil.

Project analysis indicates that many farmers in the two countries have difficulties adopting the full CA package, because, for example, they need crop residues for animal feed instead of soil cover. Sometimes the problem is that farmers are too poor to wait several seasons for the benefits of the practice to materialize. 

But the project is also finding that climate change is already altering which agricultural practices work best for farmers, which could increase the appeal of CA. 

In Zambia, analysis of climate data shows an increasingly late onset of rains in some areas. Since crops are only planted after the first rains, late rains mean late planting, which can seriously shorten the growing season. 

Project research shows that farmers in these areas of variable rainfall and late onset of rains are the most likely to maintain CA practices, which has the advantage of preparing the land before rains arrive.

Vietnam project experience

In Vietnam, at the project site in the northern part of the country, maize is planted on sloping land all the way to the tops of mountains, which in theory should be covered only in forest. Once the maize is harvested, the rains come, washing away the soil. The erosion has led to landslides, with loss of life.

Project researchers studying Vietnamese climate data have found that climate variability is increasing, which will exacerbate the erosion problem.

In response, the project is looking at more sustainable land management practices but also the use of perennial crops such as coffee and tea, which unlike maize can stay in the ground for 30-40 years. However, coffee and tea production require years to generate high returns, which is a challenge for farmers currently growing maize, which has strong demand and fetches a high price.  

Other project activities

The project works to identify areas of potential conflict between climate change and agricultural policies and supports high level policy dialogues to resolve them. It also brings together a wide range of stakeholders to discuss what climate change may mean for the future and the options available to confront it. 

At the international level, the project supports participation of ministry of agriculture staff on negotiating teams at the UN Framework Convention on Climate Change (UNFCCC) meetings. 

Taking the needed action to address climate change requires investment and that is why building investment proposals that can link agriculture and climate finance is a key function of the project

Cross fertilization of ideas

While the three project countries have different physical, economic, social and cultural characteristics, the project has found opportunities for the countries to learn from each other. For example, Vietnam is focusing on building climate smart value chains for key commodities, which could hold lessons for Malawi and Zambia. How the African countries are moving to link climate change and agricultural issues at the policy level may hold lessons for Vietnam.

The project also found that variances in how the weather is changing from country to country — as well differences in the capacities of famers, institutions and economies — mean that no there is no single “one size fits all” CSA blueprint solution, although the approach to identifying appropriate measures is universally applicable.

Source: Food and Agriculture Organization http://www.fao.org/news/story/en/item/181017/icode

Indian Agchem Market to Grow at 12-13% to $ 6.8 bn by FY17

The pesticides industry in India is expected to grow at 12-13 percent a year to touch Rs 39,000 crore by 2016-17, a Tata Strategic Management Group recently said. 

"Indian crop protection market was estimated at USD 3.8 billion in fiscal 2011-12 with exports constituting 50 per cent of the market. The market is expected to grow further at 12-13 percent to reach USD 6.8 billion," Tata Strategic Management Group and FICCI said in a report on agrochemicals. 

The report was presented at Third National Agrochemicals Conclave 2013 here. 

"This report focuses on agro-chemicals and highlights the future trends with focus on opportunities and challenges along with strategic imperatives for the industry players," Tata Strategic Management Group CEO Raju Bhinge said. 

The industry has shown an inclination towards adoption of Integrated Pest Management (IPM) approaches and use of biopesticides. Biopesticides currently represent only 4.2% of the overall pesticide market in India and are expected to grow at ~10% annually in the coming years.

The Indian crop protection market is supported by strong drivers of growth, the report said. 

"Current low consumption of crop protection products in India is 0.6 kg/hectare against world average of 3 kg/hectare, offers immense opportunities for future growth," said Manish Panchal Practice Head Chemicals at Tata Strategic Management. 

He added that to gain market share product availability and speed to market would be key to success. 

The report stated that despite strong growth drivers, agro-chemicals industry faces challenges in terms of low awareness among farmers, wide geographic spread of end users, managing availability and distribution cost. 

Apart from this, leading industry players believe that the rising sales of spurious pesticides and spiked bio-pesticides pose a major threat to industry growth.

Manish Panchal, Practice Head of Chemicals added “Current low consumption of crop protection products in India, 0.6 kg/ha compared to world average of 3 kg/ha, offers immense opportunities for future growth. To gain market share, product availability and speed to market would be key to success. To achieve this, companies need to relook at their SCM strategies”.

The Special Feature as part of the report, titled - Strategic Supply Chain Management for Agrochemical Companies, raises vital questions about the effectiveness of current SCM practices in agrochemicals and uncovers innovative ways and new practices from within the industry adopted by a select set of more nimble, progressive companies who are setting new benchmarks in supply chain performance.

Tata Strategic Management Group recommends simplified registration norms for pesticides exports and increase scope of regulation to include all types of pesticides (including biopesticides).

Regulators should increase their inspection staff to ensure regular checks to contain the growth of spurious products. There is also a need to encourage R&D and ease registration process for development of new molecules.

Large MNCs can look at strategic alliances with Indian counterparts to increase their marketing and distribution presence. Smaller Indian companies can look at tie-ups with MNCs to explore opportunities in contract research and manufacturing.

Key highlights of the Agrochemicals 2013 report:

1.Indian crop protection market estimated at USD 3.8 Bn in FY12 with exports constituting 50% of the market and expected to reach ~USD 6.8 Bn by FY17

2.Current low consumption of pesticides in India, 0.6 kg/ha compared to world average of 3 kg/ha offers significant opportunity for growth.

3. Biopesticides, which currently account for 4.2% of the market are expected to grow at ~10% p.a.

4. Industry to face challenge from the high sale of spurious/ spiked products

5. Large availability of technically skilled labour and patent expires in near future to stimulate the contract manufacturing and research in agrochemicals

6. Strategic alliances and M&As to be the trend in near future

7. Regulations need to be simplified and its scope should include all types of pesticides (including biopesticides)

8.Effective Supply Chain management to become a key success factors for the industry players.


Source: Agropages (http://news.agropages.com/News/NewsDetail---10173.htm)