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Practical tips to overcome challenges in Indian agrochemicals sector

Govt & industry need to work together to keep up the sector's growth momentum, says Ankur Aggarwal

Ankur Aggarwal 

Practical tips to overcome challenges in Indian agrochemicals sector

In recent years the agrochemical industry has significantly transformed the agricultural landscape in India, giving better yield and crop protection, year after year. largely include insecticides, herbicides, and bio stimulants. 

Even though the agrochemical industry in India has made substantial progress in recent years, is far from reaching its full potential. The sector is expected to grow at a CAGR of 8 percent per annum to become a Rs 180 billion entity by 2017-18. Despite this impressive growth, it continues to face multiple bottlenecks. For one, the Indian agrochemical market is highly fragmented, and intense competition between organised and unorganised players engaged in manufacturing these agrochemical products adds to the challenge. 

At the beginning of a new financial year, let’s take a close look at the problems facing the agrochemical industry, and how they can be surmounted:

Overdependence on generic agrochemicals
The Indian industry is largely dominated by which form about 50 percent of share of the industry. Other segments like herbicides, fungicides and other (micro nutrients & biostimulants) form 22 percent, 21 percent and 7 percent, respectively. Generic products account for the bulk of domestic consumption, especially when it comes to & In the coming years, the market demand for generic is likely to increase even more because of the price difference. Another reason behind their popularity is end-users are usually comfortable using manually tried, off-patented agrochemicals, and are too much dependent on them. Again, stringent environmental regulations and registration standards across the globe often delay the introduction of new molecular formulation and patented products in the market.

The solution: In India, MNCs comprising of both patented and generic molecules compete with a much larger number of domestic-owned companies largely operating in the generics space and serving local markets. There needs to be a level-playing field for all stakeholders in the agrochemical and industry in India, and the government needs to ensure this by easing compliance and patent registration barriers and created uniform policies for all manufacturers, allowing them ease of doing business. Domestic manufacturers need to enter into partnerships and tie-ups with MNCs to hasten the process of international patents.

Lack of awareness among farmers
With growing population and loss of land for infrastructural projects, agricultural holdings are diminishing in size. Add to this, the lack of awareness about new-age precision farming and judicious use of which result in substantial losses for Indian Inappropriate dosage and application frequency often causes more harm than good. and are vital to protect crops and maximise yields, but in India often lack information about what is available in the market and how best to use them. Again, there is an increasing misinformation campaign against agrochemicals, labeling them as toxic for environment, which is far from the truth.

The solution: Public and private sectors must work in partnership to increase awareness levels of for just-right and timely use of Agrochemical companies must take a lead in organising awareness programs and reach out to even in remote areas. Farming communities themselves should seek help from agro-experts and government advisory bodies for more information on site-specific formulations and application technique. Awareness regarding spray technology is to be given importance.

Complexities in managing supply chain 
The large number of end users makes it important to have a strong and efficient distribution network for products. However, owing to complexities in the supply chain and logistical inefficiencies the post-harvest losses amount to almost Rs 92,651 crore per year according to industry estimates. Shortage of cold storage facilities and perishable nature of the fruit and vegetables result in big losses along the food value chain.

The solution: By building strategically placed agrochemical units, not only the supply chain and inventor management hiccups can be avoided, but also the transportation costs related to raw materials can be brought down relatively. Embracing emerging new-age technologies such as Internet of Things can help in real-time tracking of farm to fork and should be used effectively by transporters.

Dealing with counterfeit 
There is a significant share of non-genuine in the Indian market including counterfeit, spurious, and sub-standard products. Non-genuine products are more common in states where are less educated or rather less developed states. It is not wrong to say, Credit drives sales of non genuine products since they enjoy relatively higher share in less developed states. Also owing to lack of proper awareness and influence of local retailers, in remote villages are often forced to buy such inappropriate, sub-standard and spurious agrochemicals, which adversely impact the revenues of organised sector. According to an industry report, use of spurious accounted for loss of 10.6 million tonnes food grain production during FY 2015.

The solution: Even though the problem of counterfeit products has plagued the sector for decades now, it has received least attention from the government, which is unfortunate. Stringent regulations need to be put in place to tackle the problem immediately. In addition, educating to differentiate between genuine and counterfeit products one will go a long way in tackling the issue. The initiative for this must be taken by leading agrochemical companies in particular. 

High cost of R&D 
Ankur Aggarwal, MD, Crystal Crop Protection
Ankur Aggarwal, MD, Crystal Crop Protection
Novel usage of R&D requires great deal of capital and manpower investments. According to reports, Indian companies spend only 1-2 percent of their revenues in research and development (R&D) as compared to global MNCs which invest around 8-10 percent.  For decades, India’s agrochemical industry has thrived on making generic which only had short term gains but no fundamental long term benefits for the industry. 

The solution: In recent years, there is an increasing realisation that the Indian agrochemical industry is forsaking long term gains by adopting a myopic view. The need to create products and new molecules that benefit the local and suit their agricultural conditions are now been seen as an integral part of agricultural development. Beyond public institutions and scientists, nowadays multinationals, private sector firms, and agrochemical companies are also investing in research on seed-treatment (which will help in ensure disease resistance) and creating specialty molecules. The pace of such investments needs to be accelerated, and incentives need to be provided for encouraging better innovation.

The take-aways
India is currently the fourth largest manufacturer of and one of the biggest exporters, worldwide. The Indian market, today, is supported by strong growth drivers. Current low consumption of products in India, 0.6 kg/ha compared to world average of 3 kg/ha, offers immense opportunities for future growth. The sector is also driven by huge opportunity for contract manufacturing and research for Indian players due to large availability of technically skilled labour. 

The government and industry players need to work together to keep up the growth momentum. Large MNCs can look at strategic alliances with Indian counterparts to increase their marketing and distribution reach or expand into newer product categories. Certain progressive companies in the industry have adopted new innovative practices and are setting new benchmarks which can be followed by other players as well.
________________________________________________________________________________________________
is the managing director of Crystal Pvt Ltd

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Practical tips to overcome challenges in Indian agrochemicals sector

Govt & industry need to work together to keep up the sector's growth momentum, says Ankur Aggarwal

Govt & industry need to work together to keep up the sector's growth momentum, says Ankur Aggarwal
In recent years the agrochemical industry has significantly transformed the agricultural landscape in India, giving better yield and crop protection, year after year. largely include insecticides, herbicides, and bio stimulants. 

Even though the agrochemical industry in India has made substantial progress in recent years, is far from reaching its full potential. The sector is expected to grow at a CAGR of 8 percent per annum to become a Rs 180 billion entity by 2017-18. Despite this impressive growth, it continues to face multiple bottlenecks. For one, the Indian agrochemical market is highly fragmented, and intense competition between organised and unorganised players engaged in manufacturing these agrochemical products adds to the challenge. 

At the beginning of a new financial year, let’s take a close look at the problems facing the agrochemical industry, and how they can be surmounted:

Overdependence on generic agrochemicals
The Indian industry is largely dominated by which form about 50 percent of share of the industry. Other segments like herbicides, fungicides and other (micro nutrients & biostimulants) form 22 percent, 21 percent and 7 percent, respectively. Generic products account for the bulk of domestic consumption, especially when it comes to & In the coming years, the market demand for generic is likely to increase even more because of the price difference. Another reason behind their popularity is end-users are usually comfortable using manually tried, off-patented agrochemicals, and are too much dependent on them. Again, stringent environmental regulations and registration standards across the globe often delay the introduction of new molecular formulation and patented products in the market.

The solution: In India, MNCs comprising of both patented and generic molecules compete with a much larger number of domestic-owned companies largely operating in the generics space and serving local markets. There needs to be a level-playing field for all stakeholders in the agrochemical and industry in India, and the government needs to ensure this by easing compliance and patent registration barriers and created uniform policies for all manufacturers, allowing them ease of doing business. Domestic manufacturers need to enter into partnerships and tie-ups with MNCs to hasten the process of international patents.

Lack of awareness among farmers
With growing population and loss of land for infrastructural projects, agricultural holdings are diminishing in size. Add to this, the lack of awareness about new-age precision farming and judicious use of which result in substantial losses for Indian Inappropriate dosage and application frequency often causes more harm than good. and are vital to protect crops and maximise yields, but in India often lack information about what is available in the market and how best to use them. Again, there is an increasing misinformation campaign against agrochemicals, labeling them as toxic for environment, which is far from the truth.

The solution: Public and private sectors must work in partnership to increase awareness levels of for just-right and timely use of Agrochemical companies must take a lead in organising awareness programs and reach out to even in remote areas. Farming communities themselves should seek help from agro-experts and government advisory bodies for more information on site-specific formulations and application technique. Awareness regarding spray technology is to be given importance.

Complexities in managing supply chain 
The large number of end users makes it important to have a strong and efficient distribution network for products. However, owing to complexities in the supply chain and logistical inefficiencies the post-harvest losses amount to almost Rs 92,651 crore per year according to industry estimates. Shortage of cold storage facilities and perishable nature of the fruit and vegetables result in big losses along the food value chain.

The solution: By building strategically placed agrochemical units, not only the supply chain and inventor management hiccups can be avoided, but also the transportation costs related to raw materials can be brought down relatively. Embracing emerging new-age technologies such as Internet of Things can help in real-time tracking of farm to fork and should be used effectively by transporters.

Dealing with counterfeit 
There is a significant share of non-genuine in the Indian market including counterfeit, spurious, and sub-standard products. Non-genuine products are more common in states where are less educated or rather less developed states. It is not wrong to say, Credit drives sales of non genuine products since they enjoy relatively higher share in less developed states. Also owing to lack of proper awareness and influence of local retailers, in remote villages are often forced to buy such inappropriate, sub-standard and spurious agrochemicals, which adversely impact the revenues of organised sector. According to an industry report, use of spurious accounted for loss of 10.6 million tonnes food grain production during FY 2015.

The solution: Even though the problem of counterfeit products has plagued the sector for decades now, it has received least attention from the government, which is unfortunate. Stringent regulations need to be put in place to tackle the problem immediately. In addition, educating to differentiate between genuine and counterfeit products one will go a long way in tackling the issue. The initiative for this must be taken by leading agrochemical companies in particular. 

High cost of R&D 
Ankur Aggarwal, MD, Crystal Crop Protection
Ankur Aggarwal, MD, Crystal Crop Protection
Novel usage of R&D requires great deal of capital and manpower investments. According to reports, Indian companies spend only 1-2 percent of their revenues in research and development (R&D) as compared to global MNCs which invest around 8-10 percent.  For decades, India’s agrochemical industry has thrived on making generic which only had short term gains but no fundamental long term benefits for the industry. 

The solution: In recent years, there is an increasing realisation that the Indian agrochemical industry is forsaking long term gains by adopting a myopic view. The need to create products and new molecules that benefit the local and suit their agricultural conditions are now been seen as an integral part of agricultural development. Beyond public institutions and scientists, nowadays multinationals, private sector firms, and agrochemical companies are also investing in research on seed-treatment (which will help in ensure disease resistance) and creating specialty molecules. The pace of such investments needs to be accelerated, and incentives need to be provided for encouraging better innovation.

The take-aways
India is currently the fourth largest manufacturer of and one of the biggest exporters, worldwide. The Indian market, today, is supported by strong growth drivers. Current low consumption of products in India, 0.6 kg/ha compared to world average of 3 kg/ha, offers immense opportunities for future growth. The sector is also driven by huge opportunity for contract manufacturing and research for Indian players due to large availability of technically skilled labour. 

The government and industry players need to work together to keep up the growth momentum. Large MNCs can look at strategic alliances with Indian counterparts to increase their marketing and distribution reach or expand into newer product categories. Certain progressive companies in the industry have adopted new innovative practices and are setting new benchmarks which can be followed by other players as well.
________________________________________________________________________________________________
is the managing director of Crystal Pvt Ltd
image
Business Standard
177 22

Practical tips to overcome challenges in Indian agrochemicals sector

Govt & industry need to work together to keep up the sector's growth momentum, says Ankur Aggarwal

In recent years the agrochemical industry has significantly transformed the agricultural landscape in India, giving better yield and crop protection, year after year. largely include insecticides, herbicides, and bio stimulants. 

Even though the agrochemical industry in India has made substantial progress in recent years, is far from reaching its full potential. The sector is expected to grow at a CAGR of 8 percent per annum to become a Rs 180 billion entity by 2017-18. Despite this impressive growth, it continues to face multiple bottlenecks. For one, the Indian agrochemical market is highly fragmented, and intense competition between organised and unorganised players engaged in manufacturing these agrochemical products adds to the challenge. 

At the beginning of a new financial year, let’s take a close look at the problems facing the agrochemical industry, and how they can be surmounted:

Overdependence on generic agrochemicals
The Indian industry is largely dominated by which form about 50 percent of share of the industry. Other segments like herbicides, fungicides and other (micro nutrients & biostimulants) form 22 percent, 21 percent and 7 percent, respectively. Generic products account for the bulk of domestic consumption, especially when it comes to & In the coming years, the market demand for generic is likely to increase even more because of the price difference. Another reason behind their popularity is end-users are usually comfortable using manually tried, off-patented agrochemicals, and are too much dependent on them. Again, stringent environmental regulations and registration standards across the globe often delay the introduction of new molecular formulation and patented products in the market.

The solution: In India, MNCs comprising of both patented and generic molecules compete with a much larger number of domestic-owned companies largely operating in the generics space and serving local markets. There needs to be a level-playing field for all stakeholders in the agrochemical and industry in India, and the government needs to ensure this by easing compliance and patent registration barriers and created uniform policies for all manufacturers, allowing them ease of doing business. Domestic manufacturers need to enter into partnerships and tie-ups with MNCs to hasten the process of international patents.

Lack of awareness among farmers
With growing population and loss of land for infrastructural projects, agricultural holdings are diminishing in size. Add to this, the lack of awareness about new-age precision farming and judicious use of which result in substantial losses for Indian Inappropriate dosage and application frequency often causes more harm than good. and are vital to protect crops and maximise yields, but in India often lack information about what is available in the market and how best to use them. Again, there is an increasing misinformation campaign against agrochemicals, labeling them as toxic for environment, which is far from the truth.

The solution: Public and private sectors must work in partnership to increase awareness levels of for just-right and timely use of Agrochemical companies must take a lead in organising awareness programs and reach out to even in remote areas. Farming communities themselves should seek help from agro-experts and government advisory bodies for more information on site-specific formulations and application technique. Awareness regarding spray technology is to be given importance.

Complexities in managing supply chain 
The large number of end users makes it important to have a strong and efficient distribution network for products. However, owing to complexities in the supply chain and logistical inefficiencies the post-harvest losses amount to almost Rs 92,651 crore per year according to industry estimates. Shortage of cold storage facilities and perishable nature of the fruit and vegetables result in big losses along the food value chain.

The solution: By building strategically placed agrochemical units, not only the supply chain and inventor management hiccups can be avoided, but also the transportation costs related to raw materials can be brought down relatively. Embracing emerging new-age technologies such as Internet of Things can help in real-time tracking of farm to fork and should be used effectively by transporters.

Dealing with counterfeit 
There is a significant share of non-genuine in the Indian market including counterfeit, spurious, and sub-standard products. Non-genuine products are more common in states where are less educated or rather less developed states. It is not wrong to say, Credit drives sales of non genuine products since they enjoy relatively higher share in less developed states. Also owing to lack of proper awareness and influence of local retailers, in remote villages are often forced to buy such inappropriate, sub-standard and spurious agrochemicals, which adversely impact the revenues of organised sector. According to an industry report, use of spurious accounted for loss of 10.6 million tonnes food grain production during FY 2015.

The solution: Even though the problem of counterfeit products has plagued the sector for decades now, it has received least attention from the government, which is unfortunate. Stringent regulations need to be put in place to tackle the problem immediately. In addition, educating to differentiate between genuine and counterfeit products one will go a long way in tackling the issue. The initiative for this must be taken by leading agrochemical companies in particular. 

High cost of R&D 
Ankur Aggarwal, MD, Crystal Crop Protection
Ankur Aggarwal, MD, Crystal Crop Protection
Novel usage of R&D requires great deal of capital and manpower investments. According to reports, Indian companies spend only 1-2 percent of their revenues in research and development (R&D) as compared to global MNCs which invest around 8-10 percent.  For decades, India’s agrochemical industry has thrived on making generic which only had short term gains but no fundamental long term benefits for the industry. 

The solution: In recent years, there is an increasing realisation that the Indian agrochemical industry is forsaking long term gains by adopting a myopic view. The need to create products and new molecules that benefit the local and suit their agricultural conditions are now been seen as an integral part of agricultural development. Beyond public institutions and scientists, nowadays multinationals, private sector firms, and agrochemical companies are also investing in research on seed-treatment (which will help in ensure disease resistance) and creating specialty molecules. The pace of such investments needs to be accelerated, and incentives need to be provided for encouraging better innovation.

The take-aways
India is currently the fourth largest manufacturer of and one of the biggest exporters, worldwide. The Indian market, today, is supported by strong growth drivers. Current low consumption of products in India, 0.6 kg/ha compared to world average of 3 kg/ha, offers immense opportunities for future growth. The sector is also driven by huge opportunity for contract manufacturing and research for Indian players due to large availability of technically skilled labour. 

The government and industry players need to work together to keep up the growth momentum. Large MNCs can look at strategic alliances with Indian counterparts to increase their marketing and distribution reach or expand into newer product categories. Certain progressive companies in the industry have adopted new innovative practices and are setting new benchmarks which can be followed by other players as well.
________________________________________________________________________________________________
is the managing director of Crystal Pvt Ltd

image
Business Standard
177 22