India’s government in May moved to ban 27 pesticides, including key products like mancozeb, 2,4-D, and chlorpyrifos, after its Ministry of Agriculture and Farmers Welfare concluded the products are “likely to involve risk to human beings and animals.”
The country’s agricultural industry submitted individual rebuttals for all 27 pesticides along with their task force before mid-August. The three big associations – CropLife International, Crop Care Federation of India, and Pesticides Manufacturers & Formulators Association of India — also went to the Delhi High Court against the proposed ban. As of this writing, there is no word on a final resolution from the government.
While exports will still be permitted, the challenge, if the bans succeed, according to Subhra Jyoti Roy, Vice President of International Business for Rallis India Ltd., is that some countries will not allow imports of a product not registered in the country of origin. If products are banned in India, they are automatically unable to supply those countries.
“Prices of replacement products are almost three to six times higher than existing prices of Indian products. This will be added burden on the Indian farmers,” Pradip Dave, President of PMFAI added, explaining that many organophosphorus compounds can cost Rs 500 ($6.80)/liter, which would need to be replaced with far more expensive imports.
According to David Li, Business Manager at Beijing-based SPM Biosciences, the banning order from India “will affect mancozeb supplies from India, which has around 220,000 metric tonnes (Mt) in total capacity.” India’s mancozeb capacity from UPL, Coromandel, and Indofil accounts for about 70% of the global supply.
“From my point of view, the ban will force UPL to take mancozeb production elsewhere worldwide, using U.S. or Chinese facilities. If UPL wants to keep a high return of investment for the AI, there is a possibility it will cooperate with a Chinese source or invest further outside of India,” Li said.
Moreover, banning of molecules nearing the end of their life value will create global regulation challenges for the food industry. Countries may further review banned pesticide residue limits for food exports and imports, Li said.
Beyond regulatory issues, India continues to experience heavy fallout from COVID-19. For example, the country’s sweeping lockdowns that began in March created a nightmare for some 150 million to 200 million poor unemployed migrant workers who were left stranded trying to get home to their villages.
Some crops were not harvested as migrant laborers went home or were on lockdown; hence these farmers lost their income and were thrust into cash-tight situations for buying inputs for the next crop.
To cope with limited manpower, plants are increasing shift hours to the extent permitted under COVID restrictions. “Factories that are automated are less impacted, while labor-intensive plants are badly impacted and overall output has come down significantly,” Roy said. “Most contract laborers who went to their native places in April have yet not returned. We have big challenges with infection rates increasing.
“In the long run, the supply gap may build up to an alarming extent. Therefore, we will probably see some deficit in the supply position of agrochemicals,” Roy continued, warning that challenges in the second half of 2020 are likely.
From a macro perspective, the Indian economy is most likely to experience a lower growth during the latter part of fiscal 2020 than in the first half of the year. According to FICCI, if the spread of coronavirus continues, growth may remain subdued in the first quarter of FY 20-21 as well.
Source: CROPLIFE
