Indian pesticide manufacturers hope that proposed federal legislation will end a practice they say is giving unfair advantage to multinational corporations importing readymade pesticide products into the country.
However, as it stands now, the legislation – Pesticides Management Bill-2017 – falls short, leaving the future of the domestic pesticide industry in danger and keeping crop protection prices high for farmers, Indian pesticide manufacturers say.
“PMB-2017, in its present form, is a total surrender to importers and multinational corporations,” says Pradip Dave, president of the Pesticides Manufacturers and Formulators Association of India, a trade group.
PMB-2017 would replace and update India’s Insecticides Act-1968. The bill’s listed goals include guaranteeing quality pesticides for farm ers, ensuring the safety and efficacy of pesticides, minimizing contamination of farms by pesticide residuals, and educating the public on the safe and wise use of pesticides.
The bill would also establish a Central Pesticides Board that would advise India’s Central Government about the science and technicalities of pesticides.
But the bill fails to require that importers of readymade pesticides register their products’ active ingredients with the federal government, even though domestic manufacturers are required to do so.
Since importers can keep their active ingredients secret, Indian manufacturers can’t take advantage of “me-too” rules, which allow them to quickly register their own new pesticide products if the products are identical or substantially similar to existing products – including those that are imported. Me-too registrations, standard in most countries, are meant to buttress the domestic pesticides industry.
Dave says this unfair arrangement has given multinationals a monopoly in pesticides and driven the domestic industry to its knees. That’s devastating for a country where more than half the citizens depend directly or indirectly on agriculture for their livelihoods.
Shrikant Satwe, head of international business at Insecticides India Ltd., an Indian chemical manufacturing company, shares Dave’s concerns.
“As registration of (AIs) is not mandatory according to the new PMB-2017, corporations will not manufacture technical-grade product in India,” Satwe says. “Also, there will be no restrictions for import of formulations.”
Indian pesticide makers have demanded, through industry associations like Dave’s PMFAI and in letters to government officials, that PMB-2017 require registration of AIs in readymade pesticide products, as the bill is finalized over the coming months.
“It would provide opportunity for indigenous medium- and small-scale industries, who drive the economy of the nation, also to do business, resultantly providing employment opportunities for (the Indian) people,” Dave says. “Otherwise, the country will end up as re-packers of imported products.”
Whether the message is penetrating the federal government is an open question. Dr. B. Rajender, joint secretary of plant protection in India’s Ministry of Agriculture & Farmers Welfare, and Sh. D.D. K. Sharma, secretary of India’s Central Insecticides Board & Registration Committee, didn’t return emails.
Law vs. Policy
Insecticides Act-1968, still the law of the land, requires registration of AIs in imported readymade pesticide products. Dave says that same rule applies in several other major agricultural nations, including the United States, Australia, Brazil, China, and countries in Europe.
“Insecticides Act-1968 ensures the availability of competition among manufacturers, so that farmers get this key agri-input at reasonable prices,” Dave says.
However, in 2007, the government’s registration committee, responsible for processing registrations for active ingredients, created a new policy that allowed multinational corporations to import readymade pesticide products while delaying AI registration – thus keeping the actives a secret – for three years.
Dave says multinationals and importers had lobbied for the policy, which has been in place ever since.
“PMFAI has been strongly opposing the policy from the very beginning,” Dave says.
Satwe says the policy violates Insecticides Act-1968.
“It is directly impacting the growth of manufacturing companies as more and more companies are inclined toward importing formulations only,” Satwe says.
According to PMFAI, over the past 10 years or so, more than 120 readymade products have been imported into India without registration of AIs. Nearly all multinational pesticide companies have taken advantage of the policy.
Further, in most cases, importers have not registered AIs even after the three-year period, violating the 2007 policy, Dave says. Some of these products and their AIs – including Metolachlor 50 EC, Pendimethalin 38.7 CS, Diflubenzuron 2 Gr., Lambda cyhalothrin 22.9 CS and Bifenthrin 23.4 MUP – are more than 25 years-old and have been registered in other countries, but not India.
Domestic manufacturers, left in the dark regarding imported AIs, can’t compete because they can’t introduce similar products through me-too registrations. This has led to more than Rs 7,000 crore, equivalent to about $70 billion, pouring out of India to multinational corporations, according to PMFAI.
Also, India has experienced no new investment in domestic pesticide manufacturing plants. Dave says 80 to 100 small and medium Indian factories, and 14 large plants, have closed over the past 10 years.
And since importers have no domestic competition, they can set their own prices. Their profit margins have risen by 200% to 400%, Dave says.
“This has given them a total monopoly to loot Indian farmers,” Dave says.
Another negative effect of the 2007 policy is environmental. Indian regulators don’t know what chemicals are coming into the country.
“This has resulted in use of technical (ingredients) of poor quality, with impurities or expired material with less technical content, which is harmful for farmers’ health, the environment and the soil,” Dave says.
Finally, Dave says the 2007 policy runs counter to the national “Make In India” campaign, which encourages buying from Indian companies.
PMFAI challenged the AI policy in a 2011 lawsuit in Gujarat High Court. In 2013, the court ruled against the policy, ordering the government to craft more transparent and fairer guidelines for imported readymade products, Dave says.
The ruling immediately allowed two or three Indian companies to introduce new products through me-too registrations, and prices on some products dropped from INR 8500 ($126) to INR 3000 ($45). Both domestic manufacturers and farmers benefited.
But importers have appealed the court ruling and the new guidelines, and have remained reluctant to register their actives, as the case continues.
Meanwhile, PMFAI doesn’t like what it sees in PMB-2017. The bill does state that every application for imported pesticides must back up claims of product performance, efficacy and safety, and must provide information regarding any harmful effects on humans, animals, and the environment.
Also, imported pesticide applications must include tolerance limits for pesticide residual effects on crops and commodities. The bill also allows me-too registrations.
However, the bill makes no mention of AIs or registering them. Dave considers that a gaping loophole that leaves the me-too clause meaningless.
“PMB-2017 should provide a level playing field for domestic manufacturers as well as importers by ensuring compulsory registration of active ingredients,” Dave says.