Tag: PMFAI

Business World

Reducing Role of Monsoon in Farming is Important for Agrochemicals Growth

Dec 17, 2020 by Neel Achary 0 Comments #By Mr. Pradip Dave, #PMFAI, #President

Mr. Pradip Dave President PMFAI and Chairman Aimco Pesticides LtdBy Mr. Pradip Dave, President, PMFAI

At present, agri inputs like agrochemicals are one of the sectors that may have narrowly escaped the debilitating onslaught of the pandemic. According to the Department of Chemicals & Fertilizers, fertilizer sales in April this year was 2.06 million tonnes, as against 1.42 million tonnes in the last April while the sale of urea grew by 36.2 percent in that month over the corresponding month last year.[1] The rabi harvest this year also put up a good show – major states harvested 80 to 90 percent of wheat crop while paddy sowing increased by 27 percent riding on the hope of an adequate monsoon. The ‘above normal’ monsoon this year will ensure that rabi crops do not face a scarcity of water. Together, this looks like a good year for the agrochemical sector, but it also underlines the heavy dependence of the sector on a natural phenomenon. Industry players will remember the mayhem in 2014-15 and 2015-16 caused by monsoon deficits of 12 percent and 14.5 percent, respectively. The Economic Survey of India found that the agriculture sector grew by 1.1 percent in 2015-16.[2] There is no denying the fact that monsoon will remain a critical factor that also plays a role in the growth of the agrochemical sector. But if it aims to grow, concerted efforts must be taken to reduce the impact of monsoon on the uptake of agrochemicals by farmers.

Mitigating the ‘make-or-break’ role of monsoon

A monsoon season off balance spells doom for the agricultural sector in India. While more than normal rain floods the kharif farms and results in serious crop damage or loss, it helps the rabi season by ensuring the reservoirs have enough water. Poor monsoon, on the other hand, means drought and crop loss in the kharif season that affects next cycle and year’s uptake too, while poor water reserve for rabi crops makes it’s future uncertain. Policymakers must devise ways to reduce the impact of monsoon on the growth of the agrochemical sector and following suggestions may help:

Better availability of institutional credit can help farmers a lot in taking the adverse monsoon impact head on. Despite institutional credit facilities being available for farmers, private moneylenders are a go-to resource for a majority of them – the NABARD All India Rural Financial Inclusion Survey 2016-17 found that 30 percent of the agricultural households borrow money from non-institutional sources like money lenders and relatives. Most of the farmers choose them over a bank or a non-banking financial institution (NBFI) due to their absence within accessible distance and the mounds of paperwork, a huge task for barely literate farmers. Easy access to farm loans is instrumental in improving a farmer’s capability to acquire good quality agrochemical for his farms.

Improving coverage of irrigated land and increasing their share as compared to exclusively rain-fed ones can help in continuing farmers sow crops at regular intervals. Besides, research has found that insecticides applied through a drip irrigation system can reduce the number of foliar insecticides sprays, which in turn, reduces the risk to non-target species.[3] It is a more common practice among vegetable growers as many of them already use drip irrigation for water management, and can add an injection pump and the required safety equipment to inject the soluble pesticides.

Educating farmers on agrochemicals and their use in terms of appropriate kind, dosage, quantity and application frequency are a less-organised and utilised tool. This not only helps farmers realise their need, but also prevents wastage and use of spurious varieties. Owing to gaps in regional languages and dialects and the fear of possible risks of crop failure make it difficult to reach out to many farmers. Developing resources that can fill such gaps will remain critical in the coming days.

Making agriculture climate-resilient is the most critical step. Several measures can be taken to ensure this, including enhanced carbon sink in soils, precision farming that enables farmers to make accurate decisions on the need and application of agricultural inputs regarding soil, weather and crop, access to market intelligence for timely decision, and efficient use of water and energy. The National Initiative on Climate Resilient Agriculture (NICRA) is a commendable step to this end while several startups are doing promising work, especially in precision farming, and steps must be taken to promote them.

Promoting weather-resistant crop varieties can be another effective way to reduce the impact of monsoon on the Indian agriculture sector and thereby, on the growth of the agrochemical industry. The research in India in this direction has been able to develop flood- and salinity-resistant varieties of rice and drought-resistant varieties of pulses. This will also ensure India’s food security goals are met.

However, only lowering agriculture’s dependence on monsoon may not be enough to foster the growth of agrochemicals in India. Being an important agri input component, it is important to introduce import substitution for the success of “Make in India” in the agrochemical sector that also holds the key to support the growth of Indian agriculture. Developing end-to-end manufacturing competency with backward integration till technical stage is the key to achieve self-reliance in the agrochemical sector. It will also need regulatory policy changes for compulsory registration of Technical Grade Pesticides (Active Ingredient) before registration of the Formulation – it is a must for the benefit of Indian farmers due to improved availability and affordability of agrochemical products as well as to support growth in the sector.

[1] https://www.fortuneindia.com/opinion/agrochemicals-shining-bright-amid-the-gloom/104575

[2] https://www.icfa.org.in/assets/doc/reports/sou_pp.pdf

[3] https://www.researchgate.net/publication/321309962_DRIP_IRRIGATION_OF_PESTICIDES_AS_A_PEST_MANAGEMENT_TOOL

Business World

Levy of Customs tariff be raised to 30% on Readymade Pesticide Imports to Save India’s Agrochemical Industry and Make ‘Atmanirbhar Bharat’ Work: PMFAI

Nov 24, 2020 by Gouri Achary 0 Comments #Agrochemical Industry, #Customs tariff, #Mr. Pradip Dave, #PMFAI, #Readymade Pesticide Imports

The Pesticides Manufacturers & Formulators Association of India (PMFAI) notes that the current customs duty structure, levying an equal amount on the import of technical grade pesticides and finished pesticide formulations can potentially wipe out the pesticide industry in India and must be increased to 30 per cent on imports of finished pesticides formulations from the current 10 per cent for the success of ‘Atmanirbhar Bharat’. It also notes that custom duty on imports of technical grade products should be hiked to 20 per cent.

Before the economic liberalization in 1991, the government levied a customs duty of 40 per cent on intermediates and raw material and technical grade pesticides used for manufacturing of formulations. This led to faster development of the Indian agrochemical industry as many large, medium, and small-scale industries manufacturing technical grade pesticides and pesticide formulations in the country were set up. Since liberalisation, customs duty on pesticide was reduced from time to time and in 2007, import duties on technical grade pesticide and finished formulation were brought at par.

“There are a lot of anomalies in the current customs duty regime that favours the imports of pesticides rather than manufacturing in India. This gives an unfair advantage to MNCs and importers and defeats the vision of ‘Atmanirbhar Bharat’. Same customs duty for import of technical grade products and finished pesticide formulation products promote imports of finished goods and is a death knell to the Indian agrochemical manufacturing industry, which is the 4thlargest global producer of agrochemicals or pesticides after the US, Japan, and China. The government must amend the current structure of customs duty and increase them to 30 per cent and 20 per cent for imports of finished pesticide formulations and technical grade products, respectively,” says Mr. Pradip Dave, President, PMFAI.

PMFAI, an industry body comprising more than 200 small, medium, and large-scale Indian pesticide manufacturers, formulators, and traders, also note that the current structure of customs duty can wipe out the Rs. 43,000 crore industry and may leave Indian farmers at the mercy of the importers and MNCs.

“Indian Pesticide Industry size at present isRs.43, 000 crores including exports worth Rs.23,000 crores pesticides and domestic consumption worth Rs.20,000 crores. The low customs duty favour importing from overseas countries and especially from China that worked out as easier and cheaper. But it has caused a downward trend in the manufacturing sector in India with no new plants being set up recently.

Besides, investments in industries manufacturing key intermediates and raw material have dropped, leading to dependence on imports of Manufacturing Use Products (MUPs) such as intermediates and raw material. Unless we urgently reverse the setback, particularly to the MSMEs, it will harm the industry and the farmers – the MNCs and companies associated with them, who import ready-to-use pesticide formulations to the country without registering technical grade products here, sell them to farmers at a profit margin ranging from 100 to 200 per cent.

The customs duty on imports of technical grade pesticides (active ingredients) must be increased to encourage and support its indigenous production,” says Mr. Dave.