Unpredictability Rules Brazilian Pesticide Registrations

Challenges to entering the most attractive and profitable pesticide market in the world – estimated at $11.6 billion in 2013 – come as no surprise. Some of them are impossible to overcome. Indeed the pesticides registration system in Brazil is one of the most complex in the world. For starters, there are three federal agencies involved in registration, each with its own internal rules and procedures. They are: MAPA (Ministry of Agriculture); ANVISA (Ministry of Health) and IBAMA (Ministry of Environment), plus state registrations.

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Since the new regulation concerning equivalency registration was approved at the end of 2006, almost all major pesticide players in the world including new local companies, started racing to apply for registrations to quickly access the market.

Since then, approximately 250 formulations and 320 technical product registrations based on equivalency were approved.

Until 2011, the evaluation of registrations took 2 to 2.5 years to complete from the time of submission. However after internal investigations in ANVISA in 2012, when two managers were fired, the wait time drastically increased. Not only did evaluations slow but the number of submissions also increased considerably adding to the delay.

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Source: Ministry of Agriculture, Jan. 2014

Source: Ministry of Agriculture, Jan. 2014

For today’s registration applications, according to pessimistic estimates, the evaluation process will likely take from 7 to 11 years. However it is reasonable to suggest that it could happen in as little as 3 to 4 years from the time of application. Nevertheless there are some cases on record that were approved in less than 12 months.

Source: ANVISA, Jan. 2014

Source: ANVISA, Jan. 2014

Notes:
PTE: technical product based on equivalency
PT: technical product not based on equivalency
PF: formulation not based on equivalency
PF/PTE: formulation linked to a technical product registration based on equivalency
PM: pre-mixture

Uncertainties concerning regulations have dampened the confidence that the interested companies have in this market and have often caused them to postpone their plans for the future. The number of new players notwithstanding, registration submissions are definitely increasing.

Critical Issues

– Registration evaluation conclusions: unpredictability and delays.
– Unclear criteria for product registration and lack of standard processes.
– Recently regulatory authorities deliberated that on-going registration submissions cannot be transferred and trade names cannot be changed until approval.
– ANVISA and IBAMA, two of the three agencies involved in registration, consider that a product is not eligible for registration when one is already registered that poses a more environmental/toxicological hazard. This understanding was for several years only for new active ingredients.
– EUP (experimental use permit): maximum period of validity 6 years. Too short considering registration evaluations may take up to 4 to 5 years.
– EUP approvals with mistakes: corrections may take 2 to 6 months.
– Batch sample for toxicological testing (6 pack and 2 mutagenicity): should be performed with a chosen batch by ANVISA.

A project to improve the registration regulatory Decree 4074 with the objective to speed up registration evaluations had been discussed in 2013 with agribusiness key players including regulatory agencies. As expected, it was discontinued. Thus for the current year, with the World Cup in Brazil and presidential elections soon after, the outlook for change of the actual situation is discouraging.

Taking into account the unpredictability and delays on registration evaluation conclusions, some companies are considering the possibility of suing regulatory agencies. In fact, there are recorded cases in which registration applicants won lawsuits against agencies. Certainly the decision to sue a government agency should be very well thought out since no company aims to counter the establishment.

Because of a lack of manpower, regulatory agencies are restricted to deadlines. Thus, in the short term, the outlook is not very optimistic as the queue of registration submissions is rising, while evaluations are not keeping pace.

Yet more and more players are willing to take risks in this very uncertain path to the biggest global pesticide market – where 26% of submissions for technical products are rejected. For those who overcome this barrier to entry, the war is not won yet. Further, many other battles are yet to be won. But through good management, it is reasonable for them to envision sustainable growth over the next 10 to 20 years.

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