The decade ahead has many opportunities for Agrochemical industry
The Indian agrochemical industry is a global market leader when it comes to generic products. Around 22 pesticide active ingredients are about to get out of their patent period in the next few years. Such offpatent molecules will create a huge opportunity for their own commercial development and provide quality agrochemicals at a reasonable affordable price to Indian farmers.
If there is one sector that has shown continued signs of growth and resilience to the all-pervasive pandemic caused by COVID-19 virus, it is the famed Indian agriculture. It hit us in the middle of the Rabi harvest season last year and yet, rising over the effects of lockdown, contributed about 20 per cent to the gross domestic product (GDP) of 2020-21. The milestone came after a lull of 17 years and marked an increase of more than 2 per cent since 2019-2020. Even during the lockdown when sectors driving the economy till then were reporting in the negative, agriculture, along with its allied activities, marked a growth of 3.4 per cent during 2020-21, according to the first advance estimate of the latest Economic Survey. So much so that the Ministry of Finance termed agriculture as the ‘green shoots’ of economy, marking its revival from the devastating impact of COVID-19 and the lockdown it induced. In this new decade, it is important to assess the status of agriculture in India to determine what it needs to meet the growing demand of the coming decade.
Food security amid rising consumer demand
According to fourth advance estimates,
India produced a total of 296.65 million tonnes of food grain in 2019-20, which was higher by 11.44 million tonnes than 2018-19. This rise in production of food grain has been a welcome trend since the past few years, and is likely to continue with better irrigation, quality input materials and marketing of grains. However, there are a few challenges that stare at the industry. The first is the exponentially growing population of the country that directly threatens to neutralise the benefits of this huge produce. It is estimated that while India may achieve projected GDP of $ 9 trillion by 2030, there will be a sharp rise in its demographic dividend and working population. Urban areas are expected to become the mainstay by 2030 – the urban population is estimated to be 600 million by 2030 – accounting for about 75 per cent of the GDP. However, the high-density population spread and fast-paced economic growth will only increase the country’s susceptibility to climate change, which will no doubt leave an adverse impact on the state of agriculture in India.
The Indian agriculture sector that is already reeling under declining soil fertility and small average farm sizes affecting productivity, faces the burdens of overdependence on southwest monsoon and infestations from pests and diseases. There are about 30,000 species of weeds, 3,000 species of worms, and 10,000
species of plant-eating insects that affect agriculture and according to the Federation of Indian Chambers of Commerce & Industry (FICCI), India loses about 20 per cent of crops to pests, weeds and diseases. The locust attack last year, the worst in the past three decades, is a glaring example and has reportedly destroyed nearly 1.7 hectares in western states like Rajasthan and Gujarat. Unless measures are taken to address these areas of concern, Indian agriculture will struggle to meet the increasing need for food security and provide adequate nutrition to the people.
Charting the way to 2030
As per a working group report of NITI Aayog titled ‘Demand and supply projections towards 2033’, India is likely to have a sufficient supply of food grains towards 2032-33 and beyond. However, in case of pulses and coarse cereals, a marginal deficit of around 5-7 million tonnes is likely. Besides, India may face a shortage of around 40 million tonnes in the case of oilseeds though commodities such as milk, fruits, vegetables, and meat seems to continue to strike a balance between demand and supply. This calls for creating enabling conditions for the farming community.
Better irrigation coverage
In 2017-18, India’s irrigation cover was 48.7 per cent of the total cultivated area while the value of its agriculture output was $524.7 billion. Irrigation is an important parameter as availability of water is a critical factor for increased cropping intensity, i.e., the number of crops grown on the same field during an agricultural year, which, needless to say, can heighten the productivity of the land manifold.
Incentive for environment-friendly measures
Sustainable measures such as water and energy conservation and stopping stubble burning can have a far-reaching impact on India’s bid to sustainable agriculture. While the Central and state governments have introduced incentives for farmers to save water and promote the use of solar technology, introduction of the Pradhan Mantri Krishi Sinchai Yojana has furthered the cause by incentivising farmers. It also played an important role in popularising micro-irrigation to ensure ‘per drop, more crop’ while some state governments, like that of Punjab, have introduced the ‘paani bachao, paise kamao’ (save water, earn money) scheme. The scheme allows a monetary incentive of Rs 4 per unit for each unit saved based on the readings in meters installed on farmers’ pumps, directly credited into their bank accounts.
Judicious and wider use of agrochemicals
Despite being a top exporter, India’s consumption of agrochemical remains very low and unevenly distributed across the states, mainly due to lack of adequate knowledge among the farmers for their judicious use. India consumes only 0.29 kg of agrochemicals per hectare as compared to 13.06 kg/ha in China, 11.85 kg/ha in Japan, and 1.30 kg/ha in Pakistan. However, farmers must be educated about crop and soil types to avoid any imbalance. Though many initiatives and efforts are being taken by the government and the industry for the same and regular awareness programmes are being organised in different capacities.
Fostering growth of agrochemical industry
The Indian agrochemical industry is a global market leader when it comes to generic products. Therefore, the decade ahead has a many opportunities as around 22 pesticide active ingredients are about to get out of their patent period. The market size of these products is expected to cross $ 4.1 billion by 2026.
For the Indian manufacturers, such off-patent molecules will create a huge opportunity for their own commercial development and provide quality agrochemicals at a reasonable affordable price to farmers. Make in India and research capabilities that are bound to grow in this decade will be another important aspect to keep an eye on in the crop protection sector.