Mr Dave was positive about the ongoing rabi season and talked about visible changes happening in the agrochemicals sector. He was very optimistic about agrochemical consumption over the medium to long term, with opportunities from off-patent products, support from various policies, and increasing awareness of farmers towards newer products and technologies.
Yes, we saw erratic monsoon starting with deficient rains, but ending with surplus in major parts of the country, especially in central India, causing crop damages. Most kharif crops are likely to see a 5-12% decline in production, except cotton, which is likely to see an increase of about 23%.
Rabi is going great. Extended rainfall has supported high reservoir levels, creating favorable conditions for rabi crops. More than half of 120 important reservoirs have water levels exceeding 80% of their capacity. This brightens the outlook for winter crops, which are mostly river-fed. The planting areas are already exceeding last year’s levels for most the crops. Cold weather conditions in northern areas will boost yields and crop production to a new high. There were late rains in some parts of the country, especially in Maharashtra and Karnataka, where sowing has been delayed a bit. But, output in these areas, especially of pulses and oilseeds, is expected to be bumper – due to right moisture content in the soil.
Recently, Gujarat, Rajasthan and nearby areas were affected by locust attacks. The government and agrochemicals industry is working together to eradicate this menace. Our PMFAI members are actively involved in controlling the menace and supporting farmers. As far as the agriculture inputs industry is concerned, this rabi season is likely to revive demand for fertilisers and agrochemicals. Prolonged summer crop in 2019 also pushed the sale of fertilizers and agrochemicals to October, though the first half of the fiscal was bad.
MSP is an important policy that determines floor prices of major crops over the years and protects farmers from middlemen and fluctuating market conditions, because it provides them an assured market in addition to a minimum assured return. However, there are some lacunae – MSP does not consider the value of the land and interest on own capital invested by farmers. It only provides a return of 50% over the paid-out costs of inputs, interest on borrowed capital, and family labour. Also, the government does not consider domestic demand, global prices, and exports competitiveness. Benefits of the scheme do not reach all farmers and is not available for all crops – which is another problem. A regular hike in MSPs is certainly a good pro-farmer move by the government to increase farmers’ incomes.
A direct income support of Rs 6,000 per year under PM-Kisan is a good initiative supporting small and marginal farmers. Yes, the amount is small, but as it goes directly to farmers, it will provide timely help to them. Let us hope that the government increases it a bit. Crop insurance introduced in 2016 is certainly a good support for farmers suffering from crop damages. The insurance charges range from 1.5-5.0% of the sum insured, which seem fair. However, the question is what percentage of farmers are enrolled into the scheme, particularly small and marginal farmers. The answer is – a very low percentage. To achieve good success, a lot of awareness among farmers is needed.
It is an ongoing process. Farmers are gradually moving towards newer technologies or differentiated products, as awareness and income increases. So, adopting newer, safer and low-dose technologies or molecules is a continuous process that is taking place in the agrochemicals sector.
There has been a significant rise in the number of biological control agents registered for use in India. The government is also promoting increased usage of biological products for plant protection. Bio category covers a small portion of the crop protection market at 3%, but it is steadily growing. Organic farming is not always an option to meet the food security of a nation. It is very labour intensive and requires high-quality organic inputs. Countering the incidence of pest attacks and meeting required plant nutrients for achieving desired output is another challenge. Crop yield in organic farming, compared to modern or conventional is farming, is very low – and cannot lead to food security, which is a proven fact. Finally, organic farming products (final produce) are available to ordinary people or the middle class at premium prices, which is not affordable to them.
No, the consumption of pesticides is always going rising as India’s consumption is one of the lowest in the world at 0.65 kg/ha vs. the world’s average of 3 kg/ha. Only 25-30% of India’s cultivated area uses agrochemicals for crop protection. Also, pests and diseases on an average eat away about 20-25% of the total food produced. India is losing agricultural production worth of Rs 1.48tn annually due to damage from pests, weeds, and plant diseases. Overall food crops compete with around 30,000 species of weeds, 3,000 species of nematodes, and 10,000 species of plant eating insects. Therefore, agrochemicals act as key inputs for crop protection and improve yields. As agriculture production demand increases with a growing population (to reach 1.5bn by 2030), usage of agrochemicals will increase.
The Indian agrochemicals sector is dominated by generic products – with more than 80% molecules non-patented. However, there is strong opportunity for the sector, as multiple agrochemicals worth US$ 4.1bn are going off-patent, which would pave the way for many new generic molecules to be introduced within a span of 2-3 years. This would support farmers in improving production and yield.
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