India Chem 2000
October 6-8,2000

The Pesticides Scenario

Mr. Salil Singhal,
Managing Director,
PI Industries

144 Pesticide molecules are registered in India.
65 technical grade pesticides are manufactured indigenously.

Bulk of the production is insecticides followed by fungicides and herbicides.

There are around 400 manufacturing units involved in the production of pesticides technicals and their formulations. Also almost every MNC banning the Japanese have invested in the production of pesticides in India.

Certain Indian Companies have made substantial investments and have made a name and reputation for themselves in the world markets. India is now recognized as an important source for supply of generic products. A very large number of units in the small scale sector are involved in formulations and sell their products essentially on regional basis.

Given the large and well spread manufacturing base, it would seem that India should be in a very happy situation in protecting its agricultural wealth from the ravages of pests and diseases. Certain environmentalists have even opined that large scale use of pesticides is seriously affecting our environment. Yet we lose more than Rs.20,000 crores of crops due to pests.

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Therefore are we using too much pesticides?
Clearly, the answer at marco level is no. The per hectare consumption in India is a paltry 570 gr/ha against 2500 gr/ha in USA. 3000 gr./ha in Europe and 12000 gran/ha in Japan. Our consumption is even lower than the consumption in Mexico which is 570 gr./ha.

But the ground reality is that the pesticides consumption in our country is lop sided creating a severe imbalance.

A very representative example of this would be say the state of Uttar Pradesh. The consumption of Western UP is far more than say Eastern UP.

The same would hold time for the rice crop, for herbicide consumption of this crop seems to be essentially in the north western part of our country with far less consumption in certain southern states. Yet millions of our rice hectares lose out to weeds.

Within the crop segments cotton is king for the pesticides industry with over 50%-55% consumption leaving the gaumt of so many other crops from the benefits of chemical crop protection.

Clearly the benefit of crop protection by pesticides are therefore limited and concentrated on a few cash crops, and we are certainly not using too much pesticides: the fact is that our usage is lop-sided.

As for the pesticides industry are we producing so much pesticides that it is now beginning to hunt. The capacity utilization in the Industry cannot be said to be healthy as a matter of fact the thrust towards exports has come as a welcome relief or rather a compulsion a necessity.

The available capacity of virtually every molecule vis-a-vis demand/consumption in India is at least 40% to 50% more and in certain cases 100% more.

There is a tendency amongst the producers to just build capacity without a thorough and proper long term study of the products in question capacity enhancement is being seen even in old molecules merely because their consumption is showing increased use, but with no consideration to existing capacities.

The other major issue facing the Industry is proliferation: Despite the fact that the Insecticides Act 1968 and rules thereof was promulgated with the express objections to "regulate" the production rate etc. of pesticides over 30,000 registrations have been granted leaving no room to implement any sort of regulation whatsoever, or long term prospects.

The biggest sufferer in this whole game is the consumer: he gets very confused when one going to buy a pack of Monocrotophos he is confronted with over 100 brands which have gone through the same registration and licensing procedure: What confounds his confusion is that the price of the same one litre pack varies from Rs. 180/- to upto Rs. 300/- per litre.

Yet even till date more and more Monocrotophos registrations and licenses are being granted.

This is not merely true for generic molecules like MCP, but even in a high tech product like neem several new brands are floating in the market.

All this has given a great impetus to fly by night operators who are now making a killing: it is an industry estimate that the market value of spurious product is estimated at Rs. 500 crores per annum whereas the Industry turnover is around Rs. 2500 - 3000 crores.

The pesticides business in India is therefore in a unique situation: while the per hectare consumption is low and highly lop sided - meaning thereby that the potential for business growth is tremendous, the huge excess capacity and proliferation is seriously hunting the industry both due to competition within and by competition from without namely spurious producers.

To top it, the spurious manufacturers - users are at a distinct advantage: they are bound by no laws, because the inspection raj in India is so manageable, and they do their business on cash and carry business

Over 20 - 25% of the Industry turnover is locked up in long outstanding dues from its distribution chain, thereby putting the Industry at a distinct disadvantage.

This only adds to the woes of the ultimate customers both the present users and the potential users. Hardly any manufacturer can feel comfortable in taking up the full scale responsibilities for product stewardship or for large scale extension activities in areas where even the concept of using crop protection products is little known.

It is for this unfortunate proliferation and excessive production capacities that we see that despite severe cost increases, rupee devaluation and ever increasing taxation burden such as excise and sales tax, the prices of pesticides are going down continuously, which is hunting both the Industry and the user.

We have even failed to introduce newer and safer formulations only due to this continued proliferation and are stuck with the same old Dusts/Ecs/WDPs and granules.

The farmers of India have also been deprived of the benefits of newer molecules primarily because they always come from developed countries and due to lack of patent protection so far, hardly any new molecules were seen in the Indian market during the 80s and the 90s. Ind fact, the MNCs have been careful in introducing their hugely successful molecules in India only after their patents have expired or are about to be expired.

Their this strategy may have been good for their business, but has certainly deprived Indian agriculture of the benefits of using newer more effective pesticide products.

Another significant aspect of the pesticides business in India are the challenges of marketing. Due to poor infracture of communication and road/rail network, the marketing of crop protection chemicals is a very expensive business. The problem are duly compounded by the gross musses of authority by the officials and inspections of many of the states who instead of properly regulating the use of pesticides are in fact strangulating pesticide manufacturers, dealers and distributors.

Despite repeated requests to the Govt. of India on this subject, things have hardly improved. But this is one area which needs most urgent attention.

There is a great need to promote and propagate the safe and judicious use of pesticides: While the Industry is doing its bid in providing training by its extension work both the Govt. of India and the State Govts. need to give very special attention to this subject.

No doubt that the Govt. of India's emphasis on IPM is a step in the right direction, but obviously the focus on safe and judicious use is a subject in itself. It is imperative that the Ministry of Agriculture must create a special budget and with the technical collaboration of the Industry and trade launch an ongoing programme on this subject.