PMFAI: Cooperation Between Regulatory Authority and Crop Protection Industry Key to Profitability

Editor’s note: At a conference organized by the Crop Care Federation of India (CCFI) along with the Ministry of Agriculture and Farmers Welfare, Govt. of India and Government of Maharashtra on 23rd January 2019 in Mumbai, Pesticides Manufacturers and Formulators Association (PMFAI) President Pradip Dave delivered a speech titled “Cooperation between Regulatory Authority and Industry in Doubling Farmers Income.” PMFAI was also the supporter and one of the sponsors of the event. The following is an excerpt from that speech.

I indeed have great pleasure to participate in this Conference organized by CCFI on “Government, Industry and Farmer working together to make farming more profitable in Maharashtra and India”. I believe it is a very important area where regulatory authority and industry need to put greater efforts.

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For doubling farmers income, I believe we have to first concentrate on affordable pricing of various agri inputs used by farmers. Due to improvement in technology and availability of quality seeds, fertilizers, pesticides, and other growth regulators, plant protection measures are at their best. Due to over production and lower demands, sometimes yield cost goes down to even 20% to 30%. This results in distress selling and prices of commodities are non-remunerative to farmers. The government needs to take maximum care on input costing and also bring fair MSP, which at present is not supporting enough. As an example, I would like to bring to your notice a brief abstract from recent news item which appeared in Times of India on Saturday, 19th January:

Rahul Pawar, a young and educated farmer running a nursery at Khutbav Village on the Pune Solapur highway, had been doing brisk business selling saplings to farmers for years. He had about 40 women working at the nursery throughout the year. Now he employs 15-20 people intermittently as business is down with vegetable growers, caught between low prices of produce and rising input costs, struggling to keep going. Such was the demand for vegetable crop sapling that he had to take saplings from other nurseries in order to fulfill his orders. But now his annual turnover has declined by about 20% …… The mood in the region is gloomy as farmers have not had good prices for three years. Prices of tomato, onion, and potato are very poor. ….. Despite the jump in productivity, lower prices, and higher input costs have hurt farmers.

I have highlighted above only few lines from the article. We need to take steps to address such a situation effectively by appropriate measures.

Post-harvest infrastructure is very poor and when there is bumper crops, farmers are forced to sell produce at throw away prices.

Increasing and upgrading storage facilities to preserve produce for longer duration can bring changes in remunerative prices. For this to happen, encouraging policies to be introduced for developing infrastructure in states for cold storage systems.

Also, taxation on key inputs like agrochemicals needs to be brought down from the present 18% to minimum level of 5% which would reduce input cost to farmers.

The main point of discussion for us today is the cooperation between regulatory authority and industry, which can help doubling farmers’ income.

As far as crop protection products are concerned, to achieve this, devising policies for supporting farmers to ensure supply of advanced and effective crop protection technologies at the most reasonable price, maintaining minimum agri inputs costs for farming is key; which is not only accessible to large scale farmers but also to small land holding farmers. This is key for increasing productivity in agriculture and success of Indian agriculture.

The reason why I am inviting particular attention to the case of small land holding farmers is that nowadays we find two scenarios:

  1. It is mainly a section of small farmers who are often losing their crops due to pests and diseases, as the majority of this group is not using plant growth and crop protection technologies as it becomes unaffordable to them.
  2. While the use of fertilizers and pesticides have increased agricultural productivity, the cost of cultivation has increased for farmers by higher input costs. With the low prices of produce like vegetables, particularly in season when productivity is more, input costs become greater concern for farmers and farmers become restless and often resort to protests against government on MSP which is lower.

As far as crop protection industry is concerned, the regulatory authority and industry needs to work together to bring improvements and changes in following areas to support Indian farmers getting quality crop protection inputs at most competitive cost:

  • First priority should be finding ways to produce agri inputs like pesticides and fertilizers at minimum production cost.
  • Marginalizing imports by developing infrastructure to manufacture advanced crop protection technologies indigenously would be a key area which could bring down cost to farmers, which ultimately would increase farmers’ agricultural income.
  • Government should take steps to stop increasing imports of readymade pesticides formulations (finished products) without registering technical grade products in India. Policy by which these registrations are granted for imports of readymade pesticide formulations only helps in creating monopolies, resulting in high prices of such pesticides to farmers. Compulsory registration of technicals along with formulations is very key as is prevailing in all major agricultural nations in the world.
  • Currently, the Indian agrochemical manufacturing sector largely depends on imports for some of the key intermediates and raw material to manufacture active ingredients (technical grade products) required for formulations. Large quantity of technical grade products are also imported for manufacturing formulations. This needs to be changed.
  • Regulatory authorities/government and industry needs to work together to devise policies and feasible projects which could help indigenous production. Regulatory authority and government can support large scale industries developing R&D facilities and infrastructure for production of key technologies locally; and also government-controlled research institutions can develop technologies and offer for commercialization to Indian industries, particularly MSMEs. Such arrangements for indigenous production can bring competition in the domestic market, resulting in the availability of crop protection products to farmers at most economic cost.
  • Government should not fall prey to demands by NGOs and environmentalists to ban generic pesticides, which are available to farmers at very economic rice and has not shown any adverse impacts on soil and environment.
  • Agrochemicals worth US$4.1 billion are going to be off patent by 2020. Large number of technical products will be getting off patent which will be an opportunity for Indian companies. India needs to be ready to take benefits by devising policies and developing indigenous technologies to manufacture these products at competitive price for the benefit of Indian farmers.

Pradip Dave
Chairman, AIMCO Pesticides Ltd. &
President, PMFAI