Agrochemicals Distribution System in India

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1 Nurturing GROWTH Enhancing QUALITY Agrochemicals Distribution System in India Anil Kakkar Excel Crop Care Ltd. Goa, 20 th November 2018

2 "The Discovery of Agriculture was first the big step life" toward a civilized - Arthur Keith

3 Year Agricultural Output ($bn) Green revolution in the beginning, was food grains centric. Low value. High value horticulture and livestock commodities drive the growth now! Data Source: World Bank Database (Accessed on 3 rd September 2018)

4 Agricultural Production. India is 2 nd Largest in the World. CHINA INDIA CAGR -4% CAGR -4% EU USA Agri.GVA ($ bn) China India EU USA Source: World Bank Database (Accessed on 3 rd September 2018) India surpasses USA India surpasses EU India s agricultural production almost equals what USA+EU produce together! Our next challenge is to become a global leader in agricultural exports too.

5 Crop Care Federation of India Global Agrochemicals Use in Agricultural Production Rank Agriculture Production 2017 Countries Agriculture Production (bn USD ) World % Share 1 China % 2 India % 3 USA % 4 Indonesia % 5 Brazil % 6 Nigeria % 7 Pakistan % 8 Russia % 9 Japan % 10 Turkey % 11 Iran % 12 Thailand % 13 Mexico % 14 Others % Total- World % Source: (Accessed on 3 rd September 2018) ttps://data.worldbank.org/indicator/nv.agr.totl.cd Rank Agrochemical Use 2016 Countries Use (tonnes) Source: (Accessed on 31 st August 2018) World % Share 1 China 1,772,296 43% 2 USA 407,779 10% 3 Brazil 377,176 9% 4 Argentina 207,706 5% 5 Ukraine 78,201 2% 6 Canada 75,318 2% 7 France 71,951 2% 8 Spain 61,895 2% 9 Italy 60,259 1% 10 Mexico 57,111 1% 11 Japan 51,006 1% 12 Australia 50,922 1% 13 India 50,410 1% 14 Others 794,802 19% Total-World 4,116, % China, USA and Brazil together account for ~ 62% of agrochemical use. Indian farmers use excessive agrochemicals is a misinformation campaign by foreign funded activist NGOs.

6 India pesticides Consumption Pesticides use per ha Country Gross Cultivated Area (mn ha) Total pesticides used per year (technical grade in tonnes) Pesticides used per ha (technical grade in kg) China 160 1,763, Japan , Brazil , USA , EU , India , World ,116, Source: Pesticides use data from FAOSTAT (2016) Agriculture output data from World Bank (2017) Both accessed on 3 rd October 2018 Gross cultivated area data from multiple sources It s India, the 2 nd largest agri. producer in the world!

7 Global Agrochemicals Trade Agrochemical Exports 2017 Agrochemical Imports 2017 Rank Countries Exports (bn USD) World % Share Rank Countries Imports (bn USD) World % Share 1 China % 2 Germany % 3 USA % 4 France % 5 India 2.4 7% 6 Belgium 2.0 6% 7 Spain 1.3 4% 8 UK 1.3 4% 9 Israel 1.2 3% 10 Italy 0.8 2% 11 Netherlands 0.7 2% 12 Hungary 0.6 2% 13 Japan 0.5 2% 14 Others % Total-World % Source: ITC (WTO), HS Code (Accessed on 31 st August 2018) 1 Brazil 2.5 7% 2 France 2.0 6% 3 Canada 1.8 5% 4 Germany 1.6 5% 5 India 1.3 4% 6 USA 1.3 4% 7 Spain 0.9 3% 8 Ukraine 0.9 3% 9 UK 0.9 3% 10 Belgium 0.9 3% 11 Russian Federation 0.9 3% 12 Italy 0.9 3% 13 Australia 0.9 2% 14 Others % Total- World % Source: ITC (WTO), HS Code (Accessed on 3 rd September 2018) Europe accounts for ~50% of global agrochemical exports followed by China (~14%)

8 CROP AREAS Source Ministry of Agriculture, GOI, 2017

9 CROP SCENARIO Kharif (Mio Ha.) 2018 Rice 38.4 Cotton Soybean Gr. Nut 3.89 Maize 7.69 Pulses Rabi (Mio Ha.) 2017 Rice 6.86 Wheat Tea 0.56 Apple Grapes Potato 2.2 Onion & Garlic 1.57 Sugarcane 4.6 Vegetables (Chilli, Tomato, Cole crops) - ~ 2.8 Source Ministry of Agriculture, GOI

10 CROP SCENARIO India is 2 nd largest producer in vegetable where as 1 st in terms of land under cultivation India contributes ~50% of global mango production with 1 st rank India holds 1 st position in Jute, Banana & Cardamom production India holds 2 nd position in Wheat, Rice, Tomato & Potato production Currently processing industry is an emerging segment Source Ministry of Agriculture, GOI

11 CONSUMPTION VS PRODUCTIVITY USA China India World Agrochemical usage (kg/ha) Productivity (MT/ha) Source: Industry reports, Tata Strategic analysis

12 IMPORT - EXPORT

13 Agrochemicals building Agriculture Value Chain Adjacent Technologies Soil Conditioners Seed Treatment Herbicides Crop Nutrition Biologicals Fungicides Growth Regulators Insecticides Edible Coatings Fresh Fruits Seed Treatment Biologicals Precision Farming Adjuvants Crop Nutrition Fumigation for Grains and Tuber

14 PRODUCT LIFE CYCLE Product R&D Registration / Approval Manufacturing License Endorsement State wise Sales Permission Product Launch / Branding Product Growth Product Stewardship

15 REGISTRATION Ministry of Agriculture regulates the manufacture, sale, import, export and use of pesticides through the 'Insecticides Act, 1968 Central Insecticide Board (CIB) is the central body for Pesticide registration Types of registration: 9(3) & 9(4) Types of Registration u/s 9(3) are as below:- - Registration for Indigenous manufacture of formulation (FIM) U/S 9(3) - Registration for Indigenous manufacture of formulation (FIM) U/S 9(3) without registering technical - Registration for Formulation Import U/S 9(3) without registering technical - Registration of Technical Indigenous Manufacture (TIM) vs Technical Import (TI) - Registration of Technical Import as (TI) New Source - Registration for Chemical Plant Growth Regulator (PGR)

16 REGISTRATION New product first time to be launched in India, registration has to be under Section 9(3) of the Act For the new product, data on various parameters like bio-efficacy, toxicology, chemistry and packaging is generated and submitted to the CIB For already registered products under Section 9(3), one can directly apply for registration under Section 9(4) i.e. Me-too Every company has to register individual technical / formulations for desired crop in India After product registration organization has to apply for Manufacturing license endorsement As per CIB, 291 pesticides are registered in India U/S 9(3)

17 TYPE OF SALES B2B: Technical supply (Domestic, International) Bulk/ Formulation supply (Domestic, International) Brand supply Job work/ tolling Co-marketing B2C: Brand sale (Distributor) Government supply (e.g. Agriculture Department) Private agencies (e.g. Pest Control Organizations) Retail Business (e.g. Unimart) Online sale Co-distribution

18 SALES PERMISSION Sales permission for each product has to be taken separately for each state Product labels Selling permission Rules and Regulations varies from state to state e.g. Maharashtra Government wont allow co marketing products

19 DISTRIBUTION SYSTEM Technical grade manufacturer Inhouse Formulator Formulator C & F Preferred Dealer C & F Distributor Distributor Retailer End User Retailer

20 TYPES OF TRANSPORTATION Primary Transport- - Company to C&F (Wagon, Trucks, ) - C&F to Distributor (Trucks, Mini Vans) Secondary Transport- - Distributor to Retailer (Trucks, Mini Vans) - Distributor to Farmer (Mini Vans, Local Transport) Tertiary Transport- - Retailer to Farmer ( By hand, Personal, Vans)

21 RETAILING MANDATES - Distributor Qualification: Degree/ Diploma in Agriculture - Valid Pesticide license - Principle certificate Complete trail of Manufacturer to consumer - Product sales permission in respective state - Product Crop labels

22 SALES AND CASH FLOW Kharif (April-Sept) & Rabi (Oct-Mar) business ratio is 60% and 40% respectively Credit business because; - Erratic monsoon - Unstable or below the average output prices - Increased cost of cultivation - Reduction in secondary income sources for farmers - Aggressive product placement at distributor level by organizations - Extended credit period to trade

23 PROMOTIONAL ACTIVITIES Conventional Methodology Modern Methodology Leaflet, Poster, Banner Product App News paper/ Magazine Website / Social Media Vehicle campaign Smart Phone Messages Demonstrations TVC & FM Radio Farmer Meeting Digital Vehicle campaign Field days Video Testimonial Call Centre Agri Solution App

24 GOVERNMENT POLICIES/ INITIATIVES GST (Sales, Returns, Transfer, E way bill) Fertilizer subsidy (Farmers Bank Account) Crop loan Crop Insurance Subsidy on Agriculture and allied business

25 EMERGING OPPORTUNITIES PBW is an emerging pest in Cotton Fall army worm infestation has begun on maize and may spread on other crops also Window of Thrips re emergence has squeezed on crops like Cotton, Chilli White grub in Sugarcane and Gr. Nut is difficult to control BPH paddy is a challenge No solution is available for Oily spots in Pomegranate MRL and PHI molecules are Important

26 SAFETY AND REGULATIONS Many organization are working for farmer safety Department is also cautious and stringent against label claim Department also draw sample randomly from market to cross check ingredients as per RC-- Misbranding Suggestions from Department, University and Research Centres are taken seriously by farmers Exports rules and guidelines changes from time to time are updated by APEDA and State Government Statutory Bodies Re entry period studies have started

27 Crop Care Federation of India Pesticide residues in Indian agricultural commodities Year Samples Analyzed Samples above MRLs (1.37%) (1.03%) (1.01%) (1.59%) (2.32%) (2.59%) (2.63%) (2.36%) (2.12%) Total (1.96%) Source : All India Co-ordinated Programme on Pesticide Residues, ICAR, Delhi. MRL : Maximum Residue Limit 98% of the agricultural commodities comply with the legal upper limits(mrl) fixed for pesticide residues, making India s food among the safest in the world.

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