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World Crop Protection Markets

By Susan Watkin

DS247

Informa UK Ltd, December 2004 All rights reserved: no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publisher or under the terms of a licence issued by t Copyright Licensing Agency (90 Tottenham Court Road, London W1P 9HE) or rights he organisations in other countries that have reciprocal agreements with the Copyright Licensing Agency. This report may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publisher. While all reasonable steps have been taken to ensure that the data presented are accurate, Informa UK Ltd cannot accept responsibility for errors or omissions.

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Executive Summary

World Crop Protection Markets

EXECUTIVE SUMMARY
World Crop Protection Markets provides market data on 45 national crop protection markets. The primary source of market data included in this report is national crop protection associations. Crop protection associations have consistently proved the most reliable source of market information in this sector. The Europe chapter includes information on Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland and the UK. The North America chapter includes information on Canada and the US. The Latin America chapter includes information on Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay and Venezuela. The Asia-Pacific chapter includes information on Australia, China, India, Japan, Malaysia, New Zealand, Pakistan, South Korea and Thailand. The largest national market profiles cover, agrochemical use; agrochemical market value; agrochemical trade (import and exports); GM crops; agriculture and where applicable pesticide legislation. The smaller national markets focus on crop protection market value.

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Contents

World Crop Protection Markets

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION 1.1 1.2 CHAPTER 2: Agrochemical markets GM crops 17 17 19 21 21 21 25 27 27 29 29 33 34 36 36 39 40 42 42 46 46 48 51 53 53 55 55 60 61 62 65 69 69 69 73 75 76 79 80 80 82 82 83 86 89 93 93 95

EUROPE 2.1 Introduction 2.1.1 Agrochemical markets 2.1.2 GM crops Austria 2.2.1 Agrochemical market 2.2.2 GM crops Belgium Cyprus Czech Republic Denmark 2.6.1 Agrochemical market 2.6.2 Pesticide use reduction policy 2.6.3 GM crops Estonia Finland France 2.9.1 Agrochemical market 2.9.2 Agrochemical trade 2.9.3 GM crops Germany 2.10.1 Agrochemical markets 2.10.2 Agrochemical exports 2.10.3 GM crops Greece Hungary Ireland Italy Latvia Lithuania Netherlands Norway Poland Portugal Russia Slovakia Slovenia Spain 2.24.1 Agrochemical markets 2.24.2 GM crops Sweden Switzerland UK 2.27.1 Agrochemical market 2.27.2 GM crops

2.2 2.3 2.4 2.5 2.6

2.7 2.8 2.9

2.10

2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27

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Contents

World Crop Protection Markets

CHAPTER 3:

NORTH AMERICA 3.1 3.2 3.3 Introduction Canada 3.2.1 Agrochemical market 3.2.2 GM crops US 3.3.1 Agrochemical market 3.3.2 GM crops

99 99 99 99 101 104 104 106 109 market 109 109 110 111 111 114 117 117 120 123 123 124 125 125 127 128 129 129 131 131 132 135 135 135 136 137 137 138 141 141 143 143 144 145 146 147 147 151 151 151 156 159 www.agrowreports.com

CHAPTER 4:

LATIN AMERICA 4.1 Introduction 4.1.1 Agrochemical 4.1.2 GM crops Argentina 4.2.1 Agrochemical 4.2.2 GM crops Brazil 4.3.1 Agrochemical 4.3.2 GM crops Chile 4.4.1 Agrochemical 4.4.2 GM crops Colombia 4.5.1 Agrochemical 4.5.2 GM crops Ecuador Mexico 4.7.1 Agrochemical 4.7.2 GM crops Paraguay Venezuela

4.2 4.3 4.4

market market market

4.5 4.6 4.7 4.8 4.9 CHAPTER 5:

market

market

AUSTRALASIA 5.1 Introduction 5.1.1 Agrochemical market 5.1.1 GM crops Australia 5.2.1 Agrochemical market 5.2.2 GM crops China 5.3.1 Agrochemical market 5.3.2 Pesticide trade 5.3.3 Pesticide production 5.3.4 Ai review 5.3.5 Counterfeiting 5.3.6 GM crops India 5.4.1 Agrochemical market 5.4.2 GM Japan 5.5.1 Agrochemical market 5.5.2 GM Malaysia 2

5.2 5.3

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5.7 5.8 5.9 5.10

New Zealand 5.7.1 Agrochemical market 5.7.2 GM Pakistan South Korea 5.9.1 Agrochemical market 5.9.2 GM crops Thailand

163 163 164 164 169 169 171 171

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List of Tables

World Crop Protection Markets

LIST OF TABLES
Table 1.1 Table 2.1 Table 2.2 Table 2.3 Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 World agrochemical sales by product type, 2003 ($ million) European agrochemical sales by product type, 2003 (Euro million) Austrian agrochemical sales by product type, 1998-2003 (tonnes of ai) Austrian agrochemical sales by product type, 1995, 1998, 2001-2002 (Euro 000) Belgian agrochemical sales by product type, 1996-2002 (tonnes of ai) Belgian ai use rate by crop, 1996-2002 (kg/ha) Belgian agrochemical sales by product type, 1995-2002 (by value) Cypriot agrochemical sales by product type, 2002-2003 (Euro million) Czech Republic agrochemical usage, 2002 Czech Republic agrochemical usage, 2000-2003 (Czech crown millions) Czech Republic agrochemical usage, 1995-2003 (tonnes of ai) Danish agrochemical sales, 1998-2003 (tonnes ai) Danish agrochemical sales, 1998-2003 (tonnes formulated product) Danish agrochemical sales, 1994-2003 (DKr million, by product type) Top ten Finnish ai sales, 2002-2003 (tonnes) Finnish agrochemical sales, 1994-2003 (by value, by product type) Finnish agrochemical sales of formulated product, 1998-2003 (tonnes, by product type) French agrochemical imports, 1994-2002 ($ million) French agrochemical exports, 1994-2002 ($ million) French agrochemical sales, 1994-2003 (Euro millions, by product type) French agrochemical sales, 1994-2003 (Euro millions, by product type) German pesticide usage by crop sector, 1994-1999, 2000, 2002-2003 (000 ha) German pesticide product sales by main crop sector, 2003 (Euro million) Agrochemical sales and exports of IVA members, 2000-2003 (Euro million) German domestic agrochemical sales, 1994-2003 (by value) German domestic agrochemical sales, 1994-2003 (tonnes ai) German ai production, 1994-2003 (tonnes) German agrochemical imports, 1994-2002 ($ million) German agrochemical exports, 1994-2002 ($ million) Greek agrochemical sales by product type, 2001-03 (Euro 000) Hungarian agrochemical sales by product type, 2002 (Euro million) Irish agrochemical sales by product type, 1992-2003 (by value) Italian agrochemical sales of formulated product, 1994-2003 (Euro million, by product type) Italian sales of ais, 1994-2003 (tonnes, by product type) Italian agrochemical sales of formulated product, 1994-2003 (tonnes, by product type) Dutch agrochemical sales by product type (Euro million) Dutch ai usage, 1994-2003 (tonnes, by product type) Norwegian agrochemical sales, 1994-2003 (tonnes ai, by product type) Norwegian agrochemical sales, 1999-2003 (tonnes formulated product, by product type) Polish pesticide sales, 2001-2002 (Euro million, by product type) Portuguese agrochemical sales, 1994-2003 (by product type by value) Portuguese agrochemical sales, 1999-2003 (tonnes, by product type) Slovakian crop protection market, 2002 (Euro million, by product type) Slovenian crop protection market, 2002-2003 (Euro million, by product type) Spanish agrochemical sales, 1994-2003 (by product type) Swedish agrochemical sales, 2002-2003 (by volume, by product sector) 5 18 22 27 28 31 31 33 33 35 35 36 37 37 41 44 45 45 49 49 52 52 54 54 55 57 57 58 58 59 60 61 64 67 67 68 70 72 74 74 75 78 78 80 81 85 86

Table 2.33 Table 2.34 Table Table Table Table 2.35 2.36 2.37 2.38

Table 2.39 Table 2.40 Table 2.41 Table 2.42 Table 2.43 Table 2.44 Table 2.45

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Table Table Table Table Table Table Table Table Table

2.46 2.47 2.48 2.49 2.50 2.51 2.52 2.53 2.54

Swedish agrochemical sales, 1994-2003 (by value, by product sector) Swiss agrochemical sales, 1994-2003 (by value, by product type) Swiss agrochemical sales, 1994-2003 (tonnes ai, by product type) UK agrochemical sales by product type, 2000-2003 (volume sales) UK agrochemical sales by product type, 1994-2003 ( million) UK agrochemical exports, 1994-2003 ( million) UK agrochemical exports, 1994-2002 ($ million) UK agrochemical imports, 1994-2002 ( million) UK agrochemical imports, 1994-2002 ($ million) North American agrochemical sales by product type, 2003 (US$ million) Canadian agrochemical sales, 1994-2003 (Can$ million, by product type) US agrochemical sales, 2003 ($ million, by crop sector) US agrochemical exports, 1997-2002 ($ million) US agrochemical sales, 1994-2003 ($ million, by product type) US agrochemical exports, 1994-2002 ($ million) US agrochemical imports, 1994-2002 ($ million) Latin American agrochemical sales by product type, 2003 ($ million) Argentinean agrochemical sales, 2003, ($ 000 by product type by crop) Argentine agrochemical imports, 1994-2002 ($ million) Argentine agrochemical exports, 1994-2002 ($ million) Argentinean agrochemical sales, 1994-2003, ($ million by product type) Brazilian agrochemical imports, 1994-2002 ($ million) Brazilian agrochemical exports, 1994-2002 ($ million) Brazilian agrochemical sales, 1994-2003, ($ million by product type) Agrochemical sales by AIFPA members, 1999-2001, 2003 ($ 000, by product type) Agrochemical sales in Colombia, 1998-2003 ($ million, by product type) Ecuadorian agrochemical sales, 1994-1995, 1997-98, 2000-2003, ($ million by product type) Mexican agrochemical sales, 1994-2001, ($ million by product type) Mexico: agrochemical sales by crop and product sector, 2001 ($ million exdistributor) Paraguay agrochemical sales, 1994-2000, by product type) Venezuelan agrochemical sales, 1997, 2001, 2003 ($ million by product type) Australasian agrochemical sales by product type, 2003 ($ million) Australian states imposing a moratorium on certain GM plants Australian agrochemical sales, 1996-2002 (Aus$ million, by product type) Chinese agrochemical sales, 2001-2003 ($ million, by product type) Chinese pesticide exports, 2003 (by product type) Chinese pesticide imports, 2003 (by product type) Chinese agrochemical production, 1999-2003 (000 tonnes, by product type) Indian agrochemical output, 2000/01-2002/03 (tonnes ai) Indian agrochemical exports, 1994-2002 ($ million) Indian agrochemical imports, 1994-2002 ($ million) Japanese agrochemical exports, 1996-1998, 2001-2003 ( million) Japanese agrochemical sales, 1994-1999, 2001-2003 ( million, by product type) Agrochemical sales by crop sector, 1994-1999, 2001-2003 (tonnes) Agrochemical sales by crop sector, 1994-1999, 2001-2003 ( million) Malaysian agrochemical sales, 1994-2003 (RM million, by product type)

88 92 92 93 96 96 97 97 97 99 103 105 105 108 108 108 110 113 113 114 116 119 119 122 123 125 128 130 131 132 133 135 138 140 141 143 143 144 149 150 150 153 157 157 158 162

Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 4.10 Table 4.11 Table 4.12 Table 4.13 Table 4.14 Table 4.15 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 5.7 Table Table Table Table Table 5.8 5.9 5.10 5.11 5.12

Table 5.13 Table 5.14 Table 5.15

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Table 5.16 Table 5.17 Table 5.18 Table 5.19 Table 5.20 Table 5.21

New Zealand agrochemical sales, 1997-2003 (NZ $ million, by product type) Pakistani agrochemical sales, 2000-2003 (Rs million, by product type) Pakistani consumption of pesticides, 1994-2002 South Korean agrochemical sales, 1994-1998, 2001-2003 ($ million, by product type) Thai agrochemical imports, 1998-2003 (million Baht, by product type) Thai agrochemical imports, 1998-2003 (tonnes, by product type)

163 165 168 169 172 172

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List of Figures

World Crop Protection Markets

LIST OF FIGURES
Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 Figure 2.7 Figure 2.8 Figure 2.9 Figure 2.10 Figure 2.11 Figure 2.12 Figure 2.13 Figure 2.14 Figure 2.15 Figure 2.16 Figure 2.17 Figure 2.18 Figure 2.19 Figure 2.20 Figure 2.21 Figure 2.22 Figure 2.23 Figure 2.24 Figure 2.25 Figure 2.26 Figure 2.27 Figure 2.28 Figure 3.1 Figure 3.2 Figure Figure Figure Figure Figure Figure Figure 4.1 4.2 4.3 4.4 4.5 4.6 4.7 EU registration process under the registration Directive 91/414/EEC Structure of the Austrian market, 2002 (by value) Structure of the Belgian market, 2002 (by value) Structure of the Cypriot market, 2003 (by value) Structure of the Czech market, 2003 (by value) Structure of the Czech market, 2003 (by volume) Structure of the Danish market, 2003 (by value) Structure of the Danish market, 2003 (by volume ai) Structure of the Finnish market, 2003 (by value) Structure of the Finnish market, 2003 (by volume) Structure of the French domestic market, 2003 (by value) French agrochemical exports by country, 2003 (by value) French agrochemical imports by country, 2003 (by value) Structure of the German market, 2003 (by value) Structure of the Greek market, 2003 (by value) Structure of the Hungarian market, 2002 (by value) Structure of the Irish market, 2003 (by value) Structure of the Italian market, 2003 (by value) Structure of the Dutch market, 2002 (by value) Structure of the Norwegian market, 2003 (by volume) Structure of the Polish market, 2003 (by value) Structure of the Portuguese market, 2003 (by value) Structure of the Slovenian market, 2002 (by value) Structure of the Spanish market, 2003 (by value) Structure of the Swedish market, 2003 (by value) Structure of the Swiss market, 2002 (by value) Swiss agrochemical market by crop, 2002 (by value) UK sales in agriculture/horticulture by product type, 2003 (by value) Structure of the Canadian market, 2003(by value) Structure of the US market, 2003 (by value) Structure of Structure of Structure of Structure of Structure of Structure of Structure of the the the the the the the Argentine market, 2003 (by value) Brazilian market, 2003 (by value) Brazilian market by crop, 2003 (by value) Chilean market, 2003 (by value) Colombian market, 2003 (by value) Ecuadorian market, 2003 (by value) Mexican market, 2001 (by value) 24 28 30 34 35 36 38 38 43 43 47 50 51 53 60 62 63 65 70 73 76 77 81 83 86 89 90 94 100 104 112 118 118 124 125 129 130 137 142 152 154 154 160 163 165 166 170 172

Figure 5.1 Figure 5.2 Figure 5.3 Figure 5.4 Figure 5.5 Figure 5.6 Figure 5.7 Figure 5.8 Figure 5.9 Figure 5.10 Figure 5.11

Structure of the Australian market, 2002 (by sales) Structure of the Chinese market, 2003 (by value) Structure of the Japanese market, 2003 (by value) Agrochemical exports by region bulk ais, 2003 (by value) Agrochemical exports by region formulated product, 2003 (by value) Structure of the Malaysian market, 2003 (by value) Structure of the New Zealand market, 2003 (by value) Structure of the Pakistani market by crop, 2003 (by value) Structure of the Pakistani market, 2003 (by value) Structure of the South Korean market, 2003 (by value) Structure of Thai imports, 2003 (by value)

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Glossary

World Crop Protection Markets

GLOSSARY
ACVM AEFISA AENDA AEPLA Agricultural Compounds and Veterinary Medicines (NZ) Asociacin Espaola de Fitosanitarios y Sanidad Ambiental (crop protection association, Spain) Associao das Empresas Nacionais de Defensivos Agrcolas (crop protection association, Brazil) Asociacin Empresarial para la Proteccin de las Plantas (crop protection association, Spain) Asociacin de Fabricantes de Productos Qumicos Agropecuarios (crop protection association, Venezuela) Asociacin Nacional de Fabricantes e Importadores de Productos Fitosanitarios Agrcolas (crop protection association, Chile) Asociacin General de Productores de Maz de Espaa (General Association of Spanish Maize Producers) Asociacin Mexicana de la Industria Fitosanitaria (crop protection association, Mexico) Agricultural Means of Production Company (China) Associao Nacional de Defensa Vegetal (Brazil) Cmara de la Industria para la Proteccin de Cultivos (crop protection association, Colombia) Associao Nacional da Indstria para a Proteco das Plantas (crop protection association, Portugal) Asociacin de la Industria de Proteccin de Cultivos y Salud Animal (crop protection association, Ecuador) Animal and Plant Health Association (crop protection association, Ireland) Australian Pesticides and Veterinary Medicines Authority Biologische Bundesanstalt (federal biological institute, Germany) Bundesinstitut fr Risikobewertung (federal institute for risk assessment, Germany) Bundesamts fr Landwirtschaft (Federal Office for Agriculture, Switzerland) Bacillus thuringiensis Bundesamt fr Umwelt, Wald und Landshaft (Environment and Agriculture Ministry Switzerland) Bundesamt fr Verbraucherschutz und Lebensmittelsicherheit consumer protection and food safety, Germany) (federal office for

AFAQUIMA AFIPA AGPME AMIFAC AMPC ANDEF ANDI

ANIPLA APCSA APHA APVMA BBA BfR BLW Bt BUWAL BVL

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Glossary

World Crop Protection Markets

CAP CASAFE CEEC CONABIA CPA CPAC CPI CSE CSPA CTB CTNBio DBV DIB DP EAC ECCO ECPA EPA ERMA EU EUCCK FAO FAOSTAT FAS FCIO FQPA FSE GAC

Common Agricultural Policy Cmara de Sanidad Agropecuaria y Fertilizantes (crop protection association, Argentina) Central and eastern European countries National Commission on Biotechnology (Argentina) Crop Protection Association (UK) Crop Protection Association of China Crop Protection Institute (now CropLife Canada, crop protection association) Centre for Science and Environment (India) Czech State Phytosanitary Administration (Sttn Rostlinolkarsk Sprva) pesticide registration board (Netherlands) Comisso Tcnica Nacional de Biossegurana (Brazil) German farmers union German Association of Biotechnology Industries (Germany) Dansk Plantevaern (crop protection association, Denmark) Experts Advisory Committee (Pakistan) European Commission Co-ordination group European Crop Protection Association Environmental Protection Agency (US) Environmental Risk Management Authority (NZ) European Union EU Chamber of Commerce in Korea Food and Agriculture Organisation Food and Agriculture Organisation Statistical Database Foreign Agricultural Service (US) Fachverband der Chemischen Industrie sterreichs (Austria) Food Quality Protection Act (US) farm-scale evaluations General Agricultural Co-operative (Japan)

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Glossary

World Crop Protection Markets

GDP GEP GGAL GLP GM GMO HCIA HSNO IBAMA ICA ICAMA ICFR IMF IPM IPR ISAAA IVA IVT JCPA KASTE KEMI KFDA KTTK MACA MAF MCPA MJP-G MRL

gross domestic product good experimental practice food department (France) good laboratory practice genetically modified genetically modified organism Hungarian Chemical Industry Association Hazardous Substances and New Organisms (NZ) Environment Ministry (Brazil) Instituto Colombiano Agropecuario (Colombian Agricultural Institute) Institute for the Control of Agrochemicals (China) Institute for Crop and Food Research (NZ) International Monetary Fund integrated pest management intellectual property rights International Service for the Acquisition of Agri-biotech Applications Industrieverband Agrar (crop protection association, Germany) Industrin fr Vxt-och Trskyddsmedel (crop protection association, Sweden) Japan Crop Protection Association Finnish crop protection association National Chemicals Inspectorate (Sweden) Korean Food and Drug Administration Kasvintuotannon Tarkastuskeskus (Finnish Plant Protection Inspection Centre) Malaysian Agricultural Chemicals Association Ministry of Agriculture and Fisheries (various countries) Malaysian CropLife & Public Health Association Meerjaarplan Gewasbescherming (Netherlands) maximum residue limit

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Glossary

World Crop Protection Markets

NAFTA NAIS NPF NRA OECD OGTR PAI PCPA PCPA PGR PMFAI PMRA PSOR R&D RDA SENASA SGCI SINDAG TCPA TGAP TRF TRIPs UBA UIC UIPP USDA VAT

North American Free Trade Agreement (US, Canada, Mexico) Norwegian Agricultural Inspection Service Norsk Plantevern Forening (crop protection association, Norway) National Registration Authority (Australia) Organisation for Economic Co-operation and Development Office of the Gene Technology Regulator (Australia) Pesticide Association of India Pakistan Crop Protection Association Pest Control Products Act (Canada) plant growth regulator Pesticide Manufacturers and Formulators Association of India Pest Management Regulatory Agency (Canada) Polish Crop Protection Association research and development Rural Development Administration (South Korea) Servicio Nacional de Sanidad y Calidad Agroalimentaria (national animal and plant health inspection service, Argentina) Society of Chemical Industries (Switzerland) Sindicato Nacional da Indstria de Produtos para a Defesa Agrcola (crop protection association, Brazil) Thai Crop Protection Association Taxe Gnrale sur les Activits Polluantes (France) Tribunal Regional Federal (Federal Court, Brazil) trade-related aspects of intellectual property rights Umweltbundesamt (federal environment agency, Germany) Union des Industries Chimiques (chemical industry association, France) Union des Industries de la Protection des Plantes (crop protection association, France) US Department of Agriculture value added tax

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Glossary

World Crop Protection Markets

VI WTO

Voluntary Initiative (UK) World Trade Organisation

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Chapter 1: Introduction

World Crop Protection Markets

CHAPTER 1: INTRODUCTION
1.1 Agrochemical markets
The global agrochemical market has been depressed for the past five years. In 2003, it rose in dollar terms, but dipped in real terms, due to the weak US currency. Estimates put the market at around $26,635 million at distributor level (+5.9% Phillips McDougall) to $29,390 million at the enduser level (+5.8% Allan Woodburn Associates). However, after taking currency effects and inflation into account, the global market continued to fall. Estimates by Allan Woodburn Associates suggest the market has shown a real decline of 12% since the market peaked in 1998. The US is the worlds largest agrochemical market, with sales of $7,132 million in 2003 (see Table 1.1). The market reached a peak of $8,848 million in 1998, but has since fallen back. Maize and soybeans are the largest crop protection markets, representing 43.9% of total sales. However, agrochemical sales have been hit by the introduction of genetically modified (GM) crops. Herbicides make up the largest sector of agrochemicals in the US market. Their sales represented 61% of the market in 2003. The combined US and Canadian agrochemical markets accounted for agrochemical sales of $8,067 million in 2003, or a little under a third of the total world market.

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Table 1.1: World agrochemical sales by product type, 2003 ($ million) Country US Brazil Japan France China Australia2 Germany Canada South Korea Italy Spain UK Argentina Mexico1 Poland Colombia Netherlands2 Hungary2 Greece Pakistan Czech Republic Ecuador Belgium2 Portugal New Zealand Chile Denmark Malaysia Venezuela Austria2 Ireland Slovakia 2 Finland Paraguay3 Switzerland Sweden Lithuania Slovenia2 Norway Latvia Cyprus Estonia Total Herbicides 4,364 1,524 876 814 480 694 593 720 196 264 247 355 454 165 191 88 75 114 76 28 123 45 61 49 61 36 57 56 39 34 27 32 38 45 27 30 na 9 na na 2 na Fungicides 700 714 700 762 348 101 442 84 277 273 180 215 58 118 95 114 117 52 45 5 60 59 48 52 26 33 40 6 16 24 31 16 14 8 24 18 na 9 na na 3 na Insecticides 1,725 725 843 182 578 209 125 75 272 199 224 53 96 191 29 63 43 14 71 163 12 28 23 23 21 27 5 16 16 10 2 5 3 44 7 3 na 4 na na 5 na Others 343 174 370 216 29 350 53 56 29 36 85 75 46 32 25 25 15 4 19 5 5 21 8 7 8 13 2 4 2 5 10 5 11 3 3 <1 na 0 na na <1 na Total 7,132 3,136 2,789 1,974 1,436 1,354 1,212 935 774 771 735 698 654 507 341 289 250 201 212 201 200 153 139 130 116 110 103 82 82 73 69 58 67 67 60 51 35 21 22 16 10 9 % change on 2002 0.0 +60.7 - 3.5 - 8.5 + 3.2 na - 5.5 + 3.1 - 0.3 + 0.9 + 2.1 + 2.4 + 9.0 na - 2.6 +16.5 +10.4 na +10.9 +25.9 - 6.1 na + 0.3 - 2.7 + 1.4 na +12.6 + 1.6 na na - 7.6 na + 2.1 na - 4.3 + 1.0 + 3.3 0.0 na - 1.4 + 4.5 >10.0

Source: see individual country entries for details Notes: 1in local currency; 1figures are sales for 2001; 2figures are sales for 2002; 3figures are sales for 2000; conversion rates for Euro 1 used as follows Czech Crown 31.89447, Danish Krone 7.43363, SwFr 1.52105, 0.69240; sources are detailed in the following chapter, and do not always cover 100% of the market; figures may not add up due to rounding; figures for India and Thailand were unavailable

Second placed was Brazil, where sales recovered sharply to $3,136 million in 2003. This mirrored the whole of the Latin American market, which had declined sharply in 2002, but recovered in 2003, as economic recovery continued in the region. Latin America accounted for 12-14% of world sales.

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Argentina is the next largest Latin American market. There, the market grew rapidly in the 1990s due to improved seed, fertilisers and crop protection, together with a fast take-up of direct drilling, especially of soybeans. In 1990, it was worth $253 million, but by 1997 the market had leapt to $925 million. However, in 1998, the market suffered a 16% fall, with herbicide sales hit by the introduction of Roundup Ready crops. In 2003, it was worth $654 million. Asia accounts for around a quarter of world agrochemical sales. I 2003, n the improved economic situation in South-East Asia boosted sales. The main market in the region is Japan, the worlds third-largest agrochemical market. Japanese agriculture is highly intensive and crop yields are among the highest in the world. It is dominated by rice, with an estimated 1.7 million ha harvested in 2003. The government has an ongoing programme to restrict rice production. Some 1.1 million ha has been taken out of production since the mid-1990s. Rice accounted for some 37% of agrochemical sales by value in 2003, so this has had a major effect on the market, which has been in decline for a number of years. China is ranked second behind Japan in Asia. Estimates on the size of the market vary. However, many agrochemical companies have been looking to the country as a potential expanding market. Sales there rose by over 3% in 2003. Western Europe accounts for slightly under a quarter of the worlds pesticide sales, with sales of over $6,500 million in 2003. The most important agrochemical market in the region is France, with around 30% of the regions sales in 2003. This was followed by Germany (18%), Italy (12%), Spain (11%) and the UK (10%). Cereals, sugar beet, maize, oilseed rape, potatoes, sunflowers and grapevines are particularly significant markets. A fall in cereal and sugar beet areas in 2003, and a drought, combined to reduce sales, while pesticide prices also fell due to competition. Sales in the two largest markets, France and Germany, fell by 8.5% and 5.5%, respectively, in the local currency.

1.2

GM crops
The introduction of herbicide-tolerant and insect-resistant plants has affected the agrochemical market in the countries where they have been introduced. The area planted with GM crops has risen rapidly since their introduction in 1996. By 2003, some 67.7 million ha were planted, up 15% on 2002, according to estimates from the International Service for the Acquisition of Agri-biotech Applications (ISAAA www.isaaa.org). The ISAAA estimates that some 7 million farmers planted GM crops worldwide in 2003, with more than 85% of them living in developing countries. By area, almost a third of GM crops were grown in the developing world, compared with a quarter in 2002. In 2003, just six countries (US, Argentina, Canada, China, Brazil and South Africa) were responsible for planting 99% of the world's GM crop acreage. This compared with just four countries (US, Argentina, Canada and China) in 2002. In total, 18 countries were growing GM crops, according to ISAAA. Ten of these were growing more than 50,000 ha of GM crops in 2003, including Australia, India, Romania and Uruguay.

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The US is by far the largest producer of GM crops. In 2003, GM crop plantings there represented 63% of the global total. Plantings of Bt and herbicide-tolerant maize increased significantly, and the area of herbicidetolerant soybeans continued to grow. Argentina remained the secondlargest market for GM crops with 13.9 million ha or 21% of world plantings. Canada's GM crop acreage accounted for 6% of the world total, with increases in GM canola, maize and soybean plantings. In the European Union (EU), Spain is the only country to plant a significant area of GM crops, with Bt maize. Despite the continuing debate over GM crops in Europe and elsewhere, the ISAAA expects that the global area of GM crops and the number of farmers planting them will continue to increase. It forecasts that within the next five years, 10 million farmers in more than 25 countries will plant 100 million ha of GM crops. The global value of GM crops is expected to increase from some $4,500 million this year to $5,000 million or more by 2005. By crop, soybeans dominate, representing 61% of the global GM crop area in 2003. Other important GM crops are maize, followed by cotton, then canola. By trait, herbicide tolerance is dominant. Herbicide-tolerant soybeans, maize and cotton covered 49.7 million ha in 2003, representing 73% of the global GM crop area. This is followed by insect resistance. There were 12.2 million ha of Bt crops (18%), while stacked genes for herbicide tolerance and pest resistance in maize and cotton amounted to 5.8 million ha (8%), ISAAA said. The two dominant GM crop/trait combinations in 2003 were herbicidetolerant soybeans and Bt maize, which together made up 75% of the global GM crop area. Herbicide-tolerant soybeans covered 41.4 million ha in seven countries, representing 61% of the global GM crop area. Bt maize was planted on 9.1 million ha in nine countries, equivalent to 13% of the GM crop area.

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CHAPTER 2: EUROPE
2.1
2.1.1

Introduction
Agrochemical markets Until 2004, the EU comprised 15 member states Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the UK. Of these, all except Denmark, Sweden and the UK have now adopted the Euro, the common currency of Euroland, which was launched in January 1999. This was seen as an important step towards complete economic union. On 1 May 2004, the EU further expanded as ten new member states joined. These were Cyprus, Malta, and the central and eastern European countries (CEEC) of the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. When certain criteria are met, these will adopt the Euro. Agriculture within the EU comes under the umbrella of the Common Agricultural Policy (CAP). When the CAP was first implemented in 1962, the EU produced only 80% of its food requirements; it now produces 120%. The CAP was introduced to increase food production and reduce European reliance on imports. Today, the aim of the CAP is to maintain an industry and the environment and economy it supports, which has the capability to hugely overproduce. For this reason, the CAP has now become synonymous with protective policies, subsidy payments, set-aside, quotas and food mountains. CAP reforms are now aiming to reduce the cost of the policy by cutting subsidies and encouraging sustainable agriculture. The introduction of new EU states is dramatically changing the remit of CAP, and is introducing a two-tier agricultural economy. Agriculture in the new states generally employs a large proportion of the population, and contributes a significant part of gross domestic product (GDP), but it is stunted by low productivity and prices. The restructuring of the CEEC agricultural economies will require huge EU investment and will open up new markets for agrochemicals. In terms of value sales, France is the largest market for agrochemicals in Europe, with sales of Euro 1,744 million in 2003, followed by Germany, with sales of Euro 1,071 million (see Table 2.1). Together, they cover 42% of European agrochemical sales covered in the report. However, both markets fell in 2003. The top five markets cover 71% of sales.

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Table 2.1: European agrochemical sales by product type, 2003 (Euro million) Country Herbicides Fungicides Insecticides Others Total % change on 20021 -8.5 -5.5 +0.9 +2.1 +2.4 -2.6 +10.4 na +10.9 -6.1 +0.3 -2.7 +12.6 na -7.6 na +2.1 -4.3 + 1.0 +3.3 0.0 na -1.4 +4.5 >10.0

France Germany Italy Spain UK Poland Netherlands2 Hungary2 Greece Czech Republic Belgium2 Portugal Denmark Austria2 Ireland Slovakia 2 Finland Switzerland Sweden Lithuania Slovenia2 Norway Latvia Cyprus Estonia Total

719 524 233 218 314 169 79 121 67 109 65 43 50 36 24 34 34 24 30 na 9 na na 2 na 2,894

673 390 241 159 190 84 124 55 40 53 51 46 35 25 27 17 12 21 18 na 10 na na 3 na 2,291

161 110 176 198 47 26 45 15 63 11 24 20 4 11 2 5 3 6 3 na 4 na na 4 na 945

191 47 32 75 66 22 16 4 17 4 8 6 2 5 9 5 10 3 <1 na 0 na na <1 na 516

1,744 1,071 681 649 617 301 264 212 187 177 147 115 91 77 61 61 59 53 51 31 22 19 14 9 8 6,729

Source: see individual country profiles for sources Notes: 1in local currency; 2figures are sales for 2002; conversion rates used are Euro 1 = Czech Crown 31.89447, Danish Krone 7.43363, SwFr 1.52105, SwKr 9.12076, 0.69240; sources are detailed in the following chapter, and do not always include 100% of the market; figures may not add up due to rounding

The European market is dominated by herbicides, with 43% of sales in 2003, while fungicides took 34% of sales. Insecticides are only of minor importance. The EU-15 countries are economically, politically and agriculturally mature, and this is reflected in the agrochemical markets. The EU-15 includes some of the most important agrochemical markets in the world with highly intensive agricultural systems. Since the mid-1990s the pesticide market has stagnated due to a worldwide downturn in commodity prices, everincreasing competition within European agriculture reducing farm incomes and the increase of the EU set-aside rate from 5% to 10%. The introduction CEES to the EU will significantly increase the market size and introduce new opportunities for crop protection product sales. Registration of crop protection products within EU member states is being harmonised under Directive 91/414/EEC. The fundamental principle of the Directive is that protection of human health, wildlife and the environment is more important than increasing productivity. EU registration of a crop protection product occurs in two parts. The ai is approved at EU level, when an ai is added to Appendix 1, the positive list, of Directive 91/414/EEC. Informa UK Ltd, 2004 22 www.agrowreports.com

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This approval lasts for a maximum of ten years but remains open to review in the light of new information. Formulations appropriate for specific markets must be approved in each country in which they will be sold, taking into account national variations in climate, cropping patterns and diet. Three-year provisional approval is possible at state level for an ai awaiting inclusion on the EU positive list. See Figure 2.1 for the registration process as dictated by Directive 91/414/EEC.

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Figure 2.1: EU registration process under the registration Directive 91/414/EEC

Step 1 (34 years) Company generates data listed in Annex II and III for the new active substance and product

Step 2 The data package is submitted to one (or more) EU member state regulatory authority (ies)

Step 3 (+/- 12 months) Following an initial completeness check to ensure that the data package is complete, a member state is appointed as rapporteur. This decision is published in the Official Journal

Step 4 (+/- 12 months) The rapporteur member state reviews the data package and prepares an evaluation document called the monograph

Step 5 (9-12 months) The monograph is circulated to all member states and EFSA. Following a peer review , EFSA generate a scientific report on the active substance assessment.

Step 6 (+/- 6 months) The EU commissions Standing Committee on Plant Health reviews the EFSA report and, based on a commission proposal, decides on an inclusion or non-inclusion of the active substance in Annex 1.

Step 7 (+/- 12 months) Once the active substance is included in Annex I, data packages as listed in Annex III for formulated products can be submitted to member states. These must be authorised in every member state where they will be sold. Mutual recognition is intended to aid the process

Source: European Crop Protection Association ECPA

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The agrochemical registration procedures in the new member states had varied widely. For example, Hungary had passed its first plant protection act in 1964, while the Baltic States had no systems in place, instead relying on the Soviet central authorities in Moscow to authorise plant protection products. All have now harmonised their legislation with that of the EU. However, progress in implementation is far from uniform. The most advanced are the smaller countries the Baltic States (which have modelled their approach on that of the Scandinavian countries), Slovenia, Malta and Cyprus. In contrast, some of the larger countries have experienced problems and delays in implementing the key legislation. Several problems remain, many of which will impact the agrochemical industry, pointed out Dow AgroSciences' registration manager for CEEC, Maciej Strek, at an IBC conference in Belgium in May 2004. Regulatory agencies lack resources and approval rates could slow down. Insufficient good laboratory practice (GLP) and good experimental practice (GEP)certified facilities exist to generate data requested by the authorities, and most countries are not ready to implement CADDY electronic data submission. Most countries are not yet equipped to take on rapporteur responsibilities for handling ai dossiers. However, the European Commission plans to involve the new member states as rapporteurs in the fourth round of the EU review of existing ais. To date, the new EU member states have focused on implementing agrochemical legislation compliant with Directive 91/414. However, other relevant aspects of EU legislation, such as the water framework Directive (2000/60), the biocidal products Directive (98/8) and legislation related to genetically modified organisms (GMOs), have received relatively little attention. The next countries likely to join the EU are Bulgaria and Romania. Bulgaria expects a plant protection law compatible with Directive 91/414 to enter into force in 2007. Romania's new plant protection law is expected to enter into force by 2006. Meanwhile, ECPA is making good progress in the establishment of daughter associations in CEECs, including the accession states. A network of associations is crucial to the development of the agrochemical industry in this region, ECPA believes. The ECPA and the CEEC associations are committed to environmentally sustainable agriculture, integrated pest management (IPM), and the disposal of obsolete pesticides. EU accession countries must also ensure that they have adequate legislation on data protection, counterfeiting, illegal imports and container management systems, ECPA says. ECPA is a member of CropLife International, the global crop protection association. 2.1.2 GM crops The proposed introduction of GM crops led to an unprecedented consumer backlash throughout Europe. The expected impact of GM technology on crop protection strategies had driven most agrochemical research-anddevelopment (R&D) based multinationals to invest heavily in germplasm, seed companies and new technologies. However, the delay in GM launches,

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and the limited market prospects for GM crops, restricted the potential impact of GM technology on agrochemical sales in the short term. Among EU countries, only Spain is growing significant amounts of GM crops commercially. An estimated 32,000 ha of Bt maize were grown there in 2003, up from 25,000 ha in 2002, according to figures from the ISAAA. Germany grew a token area of Bt maize. Elsewhere in Europe, Romania increased its area of GM soybeans by 50% to 70,000 ha, and Bulgaria grew a few thousand ha of herbicide-tolerant maize. Approvals of GM crops for importation, food, feed and commercial growing have been slow. Some approvals were made, such as Syngenta's BT11 field maize for import and processing in 1998. However, member states then decided that they would not approve any new products until new laws on traceability and labelling were put in place. The EU thus began a de facto moratorium on new GM products in October 1998. Pressure for the EU to lift its moratorium on new GM product approvals intensified. In May 2003, the US, Canada and Argentina filed a dispute resolution case with the World Trade Organisation (WTO), claiming that the lack of approvals constituted a trade barrier. The EU argued that it would resume GM product approvals once labelling and traceability regulations were in place. These regulations finally came into force in the EU on 18 April 2004, clearing the way f new registrations. The regulations oblige member or states to take appropriate measures to avert the unintended presence in non-GM products of material derived from GMOs, and commits the Commission to developing guidelines on co-existence. The Commission promises to "carefully monitor" compliance with this legislation. Member states adopting measures that diverge from EU law will have to answer to the Commission. On 19 May 2004, the European Commission finally approved the sale of Syngenta's tinned GM BT11 sweet corn for human consumption. Approval is valid for ten years and covers the import for human consumption but not cultivation. Another stumbling block has been concerns that GM crops might contaminate organic or non-GM crops. In July 2003, the European Commission published guidelines for member states to develop strategies for ensuring the co-existence of GM crops with their conventional and organic counterparts. The framework is designed to help national governments implement best practices for co-existence that are in line with EU legislation governing GMOs. The guidelines set out general principles, outline technical and procedural issues, and provide a list of possible implementation measures to be tailored to local conditions. Agriculture Commissioner Franz Fischler stressed that co-existence regulations were needed to ensure that farmers had a real choice between growing conventional, organic and GM crops. However, an EU-wide approach would be unworkable as farm practices varied greatly from one country to another. Allowing member states to develop their own measures within an EU framework proves the most efficient and cost-effective course of action.

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Among the possible measures suggested by the Commission for ensuring that non-GM crops and products do not become contaminated with GM material are buffer zones, pollen barriers, monitoring and notification schemes, training and advisory services. The Commission also recommends that neighbouring farmers consult on sowing plans to prevent crosspollination. Priority should be given to measures at farm level and cooperation with adjacent farms. The Commission advises member states to warn farmers, seed suppliers and other operators about any liability they might be subject to under national law to compensate any economic damage caused by the admixture of GM and non-GM crops. In two years' time, the Commission will report back on its co-existence guidelines to EU Agriculture Ministers and the European Parliament and outline any need for further steps. Companies involved in biotechnology, including plant biotechnology, are represented at the European level by the European Association for Bioindustries (EuropaBio). It represents 33 member companies operating worldwide and 24 national biotechnology associations, whose members number some 1,500 small and medium-sized enterprises.

2.2
2.2.1

Austria
Agrochemical market Austria has a land area of 8.3 million ha (FAOSTAT 2002), of which some 1.4 million ha is down to arable crops, 1.9 million permanent pasture and only 71,000 ha permanent crops (including 46,000 ha of vines). The main crops are wheat, with an estimated harvested area of 272,000 ha in 2003 (FAOSTAT), barley (212,300 ha) and maize (173,300 ha). Agrochemical sales declined significantly in 1995, following EU entry, and the market has been relatively static since, according to the chemical trade association, Fachverband der chemischen Industrie sterreichs (FCIO). Sales by FCIO members accounted for around 85% of total pesticide sales in Austria in 2003. The market peaked in 2000, helped by favourable weather, improvements in the registration system (which increased product availability) and fewer existing stocks in the distribution chain. However, sales have since fallen back. In 2001, sales were hit by dry weather and leftover stocks from 2000. Volume sales fell to 2,822 tonnes ai (see Table 2.2). By 2003, sales had recovered, although volume sales were still below 1998 levels.
Table 2.2: Austrian agrochemical sales by product type, 1998-2003 (tonnes of ai) 1998 1999 2000 2001 2002 2003 % change 2001-2002 - 1.4 +40.2 - 8.6 -15.1 +13.1

Herbicides Fungicides Insecticides Others Total

1,583 1,336 85 301 3,305

1,584 1,020 87 268 2,959

1,569 1,253 100 271 3,193

1,317 1,088 94 323 2,822

1,314 1,041 81 258 2,694

1,295 1,460 74 219 3,048

Source: adapted from FCIO Notes: sales are for FCIO members

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Value sales fell to Euro 76.8 million in 2002 (see Table 2.3). Very dry weather in the spring caused damage to several crops, and cereal prices fell. Also, amendments to the 1997 pesticide law allowed pesticides registered in Germany to be used in Austria without being approved there. From 2004, this simplified process also applied to products registered in the Netherlands. Compared with other countries in Europe, Austrian farmers have long paid high prices for pesticides. This change in legislation should reduce pesticide prices.
Table 2.3: Austrian agrochemical sales by product type, 1995, 1998, 20012002 (Euro 000) 1995 1998 2001 2002 % change 2001-2002 -12.6 + 2.2 -12.1 + 0.3 - 7.4

Herbicides Fungicides Insecticides Others Total

42,012 21,390 10,355 2,303 75,994

44,265 22,477 10,327 1,969 79,039

41,060 24,380 12,668 4,842 82,950

35,866 24,926 11,138 4,856 76,786

Source: adapted from FCIO Notes: sales are for FCIO members

Herbicides are the main product category used in Austria (see Figure 2.2), with almost half the market. Fungicides accounted for almost a third of sales.
Figure 2.2: Structure of the Austrian market, 2002 (by value)

Insecticides 15%

Others 6%

Herbicides 47%

Fungicides 32%

Source: adapted from ECPA

The privately owned Austrian company, Kwizda, has well over 20% of the agrochemical market. The other main players are Bayer, Syngenta and BASF. About 65% of pesticide sales in Austria are through private dealers and the balance is sold directly by national distributors to large farmers. The major wholesalers include Glatz Mauthner and Carl Beiselen (which has acquired a majority stake in ZEG). There is now a strong German influence and BayWa has taken a stake in a number of Austrian co-ops. In the east of Austria, co-ops control virtually 100% of the pesticide market, whereas in the east, private dealers are important. The co-ops are organised regionally, with a central organisation representing their interests. Individual co-ops Informa UK Ltd, 2004 28 www.agrowreports.com

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buy pesticides directly from national distributors and do not wholesale (Redbond). There is a high level of interest in organic farming, so the pressures on the value of the agrochemical market look to continue. In the mid 1990s, Austria had a great wave of conversions to organic farming. This was mainly due to generous federal subsidies introduced in 1991 and the agrienvironmental programme, introduced in 1995. However, around 2000, some 1,800 farmers (especially in the western alpine regions) reconverted to conventional farming because of problems in marketing their products. Since then, there has been a further move to organic farming, primarily in Eastern Austria among producers of cereals and vegetables. In many cases, these were young and innovative farmers, with a different perspective of the future (Redbond). At the end of 2002, 297,000 ha of land were organically cropped. The shift to organic farming systems has been accompanied by intensive advertising by the large food chains and food processors, which first introduced organic brand names to their ranges in 1994. This resulted in greater public awareness of organically produced foods In February 2001 the Austrian Ministry of Agriculture presented the first Action Plan for Organic Farming and in July 2003 the second. These include recommendations for improved consumer information, marketing training, advice and research. 2.2.2 GM crops There has been opposition to GM technology in Austria. The Upper Austrian regional government declared itself an area free of GMOs including GM crops, arguing that this was necessary to protect organic and conventional agriculture. However, in 2003, the European Commission ruled that the strict conditions for an opt-out from harmonised EU measures under Article 95(5) of the EC Treaty had not been met. In 2004, Austrian retailers informally agreed to ban all food marked as GM. This was in response to the Austrian government's compliance with the EU traceability and labelling regulations, which state that food containing more than 0.9% of material derived from GMOs must be labelled. Retailers said they were banning all food that would have to be labelled under the law to fulfil customer expectations.

2.3

Belgium
In Belgium, most farms are family-owned with very few employees. Often there is no-one to take over the business, which is one of the reasons behind the considerable decline in the number of farms. Between 1997 and 2000, 6,500 farmers (10% of the total) gave up farming. Belgiums agrochemical market is relatively small, around 3% of the EU total. Over 80% of sales are through the private trade, which comprises both wholesalers and retailers. The rest is through co-operatives. As more products have come off patent, the suppliers of generics have gained a stronger foothold in the Belgian market and will continue to do so. Pesticide sales by members of the Belgian agrochemical industry association, Phytofar, totalled Euro 147.3 million in 2002 compared with Euro 146.9

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million in 2001 (see Table 2.4). Figures for 2003 have not yet been released. Members sales cover some 90% of the Belgian pesticide market. This is up from 80% prior to 2000, when Belchim, Belgagri, Hermoo, ProAgro and Stefes joined. Phytofars members are now BASF, Bayer CropScience, Bayer Environmental Health, Belchim, Belgagri, Certis, Compo, Dow AgroSciences, Dupont, Edialux Formulex, Hermoo, Janssen Pharmaceutica, Monsanto, Scotts, Syngenta, Protex and Taminco. Exports represent up to 20% of total sales. Sales of fungicides and insecticides increased to Euro 51.2 million and Euro 23.5 million, respectively, in 2002. This offset a 6.7% slide in herbicide sales, which accounted for 44% of the market (see Figure 2.3).
Figure 2.3: Structure of the Belgian market, 2002 (by value)

Others 5% Insecticides 16%

Herbicides 44%

Fungicides 35%

Source: adapted from Phytofar Notes: sales are for Phytofar members

Volume sales of ais decreased by 1% in 2002 to 5,016 tonnes, and below the peak seen in 2000 (see Table 2.5). Increased fungicide sales, in 2000 and also 2002, were due to heavy use of products to treat potatoes during potato blight (Phytophthora infestans) epidemics. The volume of ais in all other markets declined between 2001 and 2002 as more sophisticated pesticides, with lower application rates, appeared on the market.

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Table 2.4: Belgian agrochemical sales by product type, 1996-2002 (tonnes of ai) 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 - 9.8 +13.7 - 4.1 - 2.8 - 1.0

Herbicides Fungicides Insecticides Others Total

1,821 1,099 442 835 4,197

2,057 1,118 476 466 4,117

2,126 1,273 385 570 4,354

2,022 1,162 473 471 4,128

2,493 1,816 522 594 5,425

2,345 1,595 560 566 5,066

2,116 1,813 537 550 5,016

Source: adapted from Phytofar Notes: sales are for Phytofar members

Arable land covers some 817,000 ha, permanent pasture 678,000 ha and permanent crops only 24,000 ha (FAOSTAT 2002). Potatoes are the highest users of pesticides per ha, at over 25 kg/ha in 2002 (see Table 2.6), due mainly to their heavy reliance on fungicides. They covered over 59,300 ha in 2003 (FAOSTAT harvested ha estimates).
Table 2.5: Belgian ai use rate by crop, 1996-2002 (kg/ha) 1998 Potatoes Herbicides Fungicides Insecticides Desiccants Total Sugar beet Herbicides Fungicides Insecticides Total Cereals Herbicides Fungicides Insecticides Plant growth regulators (PGRs) Total Maize Herbicides Insecticides Total 1999 2000 2001 2002 % change 2001-2002 - 2.1 +11.5 -15.4 -12.8 + 8.4 - 0.5 - 4.5 0.0 - 0.7 + 5.7 + 3.5 >100 + 4.1 + 5.5 + 2.4 -66.7 + 1.2

3.40 20.26 0.35 0.74 24.75 4.50 0.24 0.29 5.03 1.89 0.82 0.02 0.63 3.36 1.90 0.06 1.96

3.33 19.49 0.79 0.82 24.43 4.10 0.26 0.20 4.56 1.62 0.70 0.01 0.57 2.90 1.80 0.05 1.85

3.33 24.47 0.16 0.84 28.80 4.20 0.24 0.23 4.67 1.78 0.68 0.02 0.84 3.32 1.71 0.05 1.76

3.40 18.77 0.13 0.94 23.24 4.12 0.22 0.16 4.50 1.41 0.57 0.01 0.73 2.72 1.66 0.03 1.69

3.33 20.93 0.11 0.82 25.19 4.10 0.21 0.16 4.47 1.49 0.59 0.03 0.76 2.87 1.70 0.01 1.71

Source: adapted from Phytofar Notes: sales are for Phytofar members

Although less-intensive pesticide users than potatoes, cereals covered a much larger area, at some 300,200 ha in 2003. This area included around 53,700 ha of maize (with a further 170,600 ha of maize being grown for forage/silage). Weeds in maize are becoming increasingly difficult to control. Informa UK Ltd, 2004 31 www.agrowreports.com

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The use of pesticides in sugar beet has fallen significantly as a result of reduced application rates. Sugar beet covered 91,200 ha in 2003.

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Table 2.6: Belgian agrochemical sales by product type, 1995-2002 (by value) 19951 19961 19971 19981 19991 20001 20002 20012 20022 % change 2001-2002 - 6.7 + 9.2 + 8.8 -12.8 + 0.3

Herbicides Fungicides Insecticides Others Total

2,254 1,480 636 204 4,574

2,366 1,375 735 141 4,617

2,389 1,603 777 144 4,913

2,498 1,859 789 188 5,334

2,618 2,083 847 351 5,899

2,810 2,280 844 344 6,278

69.7 56.5 20.9 8.5 155.6

69.8 46.9 21.6 8.6 146.9

65.1 51.2 23.5 7.5 147.3

Source: adapted from Phytofar Notes: 1figures are in BFr million; 2figures are in Euro million; sales are for Phytofar members

2.4

Cyprus
Cyprus has a total land area of some 924,000 ha, with arable land covering only 72,000 ha, permanent crops a further 41,000 ha and permanent pasture 4,000 ha (FAOSTAT 2002 figures). Grapes cover some 17,000 ha, olives 7,800 ha and almonds 3,300 ha; citrus fruit are also significant. Among arable crops, cereals are important, with an estimated 45,000 ha of barley and 6,000 ha of wheat harvested in 2003 (FAOSTAT). The average farm size was only 3.6 ha (1994 figures). The Cypriot agrochemical market was worth Euro 9.2 million in 2003, up from Euro 8.8 million in 2002 (see Table 2.7). The increase was due to higher sales of newer, more expensive products.
Table 2.7: Cypriot agrochemical sales by product type, 2002-2003 (Euro million) 2002 2003 % change 2002-2003 - 7.5 +16.7 +23.5 -14.3 + 4.5

Insecticides Fungicides Herbicides Others Total

4.0 2.4 1.7 0.7 8.8

3.7 2.8 2.1 0.6 9.2

Source: adapted from the Cyprus Crop Protection Association Notes: sales are estimates for farmer level for the whole market

Insecticides made up around 40% of sales (see Figure 2.4), closely followed by fungicides, with 30% of the market.

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Figure 2.4: Structure of the Cypriot market, 2003 (by value)

Others 7%

Herbicides 23%

Insecticides 40%

Fungicides 30%

Source: adapted from the Cyprus Crop Protection Association

There are no GM crops grown commercially in Cyprus.

2.5

Czech Republic
The Czech Republic was formed in 1993. Post-communism, the countrys privatisation programme has included land reform, the break up of cooperatives and the privatisation of state farms. After the break up, most land was returned to individuals, and there are now some 53,000 individuals who farm on average 18 ha. There are also 750 cooperatives and 2000 farming companies, with on average 886 ha and 50 employees. The country has a land area of 7.7 million ha, with around 3.1 million being arable land (FAOSTAT 2002). A further 968,000 ha was permanent pasture and 236,000 permanent crops, including orchards, vineyards and hopgardens. Wheat and barley are the main crops, with around 648,400 ha and 550,000 ha harvested in 2003 (FAOSTAT estimate). Mixed grass and legumes accounted for a further 300,000 ha. In 2004, the Czech Republic announced plans to slash its arable crop area to eliminate surplus production by 2006. Under the government's Horizontal Rural Development Plan (HRDP), farmers are encouraged to convert land to grassland and forest. Public funds of Euro 135.7 million ($162 million) and EU funding of Euro 542.8 million will to finance this. The scheme also comprises measures to: increase the organic farming area; encourage younger farmers; ensure adequate income for farms in less-favoured areas; and establish producer groups. In fact, the country has already developed national legislation for organic farming as well as programmes aimed at supporting organic farmers. The EU has accepted the production standards for vegetable production and the inspection system in the Czech Republic as equivalent to those laid down in the EU. As a result, a substantial export trade to other EU member states already exists. According to figures from ECPA, agrochemical sales were flat for the three years to 2002, but then showed significant growth of 24%. The market rose to Euro 146 million with herbicides accounting f r 54% of the total (see o

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Table 2.8). Growth at around 10% per annum can be expected over the next five years (Redbond).
Table 2.8: Czech Republic agrochemical usage, 2002 Euro millions Herbicides Fungicides Insect icides Others Total 79 44 10 13 146 Czech crown millions 2,442 1,360 309 402 4,513

Source: adapted from ECPA 2003, using figures from the Czech crop protection association Notes: converted using average 2002 exchange rate of Euro 1 = Czech crown 30.91379

By contrast, Czech State Phytosanitary Administration (CSPA Sttn Rostlinolkarsk Sprva) estimates for the whole market (see Table 2.9) show sales fell by 6.1% to Czech Kr 5,625 million (Euro 177 million). Including animal repellents, adjuvants and others, sales were worth Czech Kr 5,662 million.
Table 2.9: Czech Republic agrochemical usage, 2000-2003 (Czech crown millions) 2000 2001 2002 2003 % change 2002-2003 +3.2 -18.7 -16.3 -12.5 - 6.1

Herbicides1 Fungicides2 Insecticides2 PGRs Total3

3,165 1,316 326 95 4,902

3,310 1,709 332 119 5,470

3,371 2,076 406 136 5,989

3,478 1,688 340 119 5,625


3

Source: adapted from CSPA Notes: 1includes desiccants; 2includes seed treatments; repellents, adjuvants and others

total excludes sales of animal

Herbicides made up 62% of sales, according to CSPA figures (see Figure 2.5), with 33% of value sales applied to cereals.
Figure 2.5: Structure of the Czech market, 2003 (by value)

Fungicides 30%

PGRs 2%

Insecticides 6%

Herbicides 62%

Source: adapted from CSPA

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By volume, sales of ais amounted to 4,248 tonnes in 2003, down 8.3% on 2002 (see Table 2.10). Including animal repellents, adjuvants, rodenticides and others, total sales were 4,309 tonnes ai. Herbicides accounted for 60% of volume sales in 2003 (see Figure 2.6). Of this, 29.3% were applied to cereals, 18.5% to maize, 18.2% to oilseed rape and 9.8% to sugar beet. Fungicides accounted for 24% of 2003 usage, and were mostly used on cereals (40.0%), potatoes (15.2%), hops (11.8%) and grapevines (11.3%). Insecticides accounted for only 4% of the 2003 usage; 53.1% of all insecticides by volume were used on oilseed rape, followed by orchards (11.1%), sugar beet (6.2%), cereals (5.2%) and potatoes (4.8%).
Figure 2.6: Structure of the Czech market, 2003 (by volume)

Fungicides 24%

PGRs 12%

Insecticides 4%

Herbicides 60%

Source: adapted from CSPA

Imported products make up the majority of agrochemicals used in the Czech Republic, as domestic production is very limited. No GM crops are yet grown in the Czech Republic, although this is expected to change.
Table 2.10: Czech Republic agrochemical usage, 1995-2003 (tonnes of ai) 1995 Herbicides1 Fungicides2 PGRs Insecticides2 Total3 2,461 991 178 103 3,733 1996 2,251 1,043 224 95 3,613 1997 2,524 908 298 91 3,821 1998 2,642 887 398 119 4,046 1999 2,541 906 540 115 4,102 2000 2,599 1,007 465 158 4,229 2001 2,584 1,052 524 169 4,329 2002 2,602 1,217 626 185 4,630 2003 2,564 1,040 490 154 4,248 % change 2002-2003 - 1.5 -14.5 -21.7 -16.8 -8.3

Source: adapted from CSPA Notes: 1includes desiccants; 2includes seed treatments; 3total excludes sales of animal repellents, adjuvants and others, which came to 61 tonnes ai in 2003, and rodenticides, with negligible sales

2.6
2.6.1

Denmark
Agrochemical market Denmark is very flat and the fertile soil and temperate climate make it ideal for agriculture. Agricultural production has been concentrated on fewer,

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larger and more intensive farms. The average farm size is 45.7 ha. The land area is 4.2 million ha, with arable crops covering 2.3 million ha (FAOSTAT 2002). The main crops are barley (800,000 ha harvested in 2003, FAOSTAT) and wheat (600,000 ha). Permanent crops cover only 8,000 ha. Agrochemical sales by members of the local crop protection association (Dansk Plantevaern DP) rose by 12.6% to DKr 673.6 million (Euro 90.7 million) in 2003 (see Table 2.11). Volume sales rose by 8.8% to 2,957 tonnes ai (see Table 2.12).
Table 2.11: Danish agrochemical sales, 1998-2003 (tonnes ai) 1998 Herbicides Fungicides Insecticides PGRs Total 2,028 775 64 123 2,991 1999 1,703 687 63 135 2,588 2000 1,972 660 60 110 2,803 2001 1,925 511 66 116 2,617 1 2002 2,017 542 65 96 2,718 1 2003 2,192 629 66 70 2,957 % change 2002-2003 + 8.7 +16.1 + 1.5 -27.1 + 8.8

Source: adapted from DP Notes: figures are for members of DP; 1Environment Ministry estimate for the whole market is 3,083 tonnes ai for 2001 and 2,868 tonnes ai for 2002

Formulated product sales rose 10.6% to 7,419 tonnes (see Table 2.13). DP members account for around 82% of the Danish agrochemical market in ai volume terms, but a little more in value terms (see Table notes). Sales include a small amount of non-crop pesticides.
Table 2.12: Danish agrochemical sales, 1998-2003 (tonnes formulated product) 1998 Herbicides Fungicides Insecticides PGRs Total 5,637 1,655 335 231 7,858 1999 4,722 1,718 332 244 7,016 2000 5,076 1,650 365 195 7,286 2001 5,043 1,346 182 210 6,780 1 2002 4,886 1,451 217 152 6,706 1 2003 5,407 1,661 212 139 7,419 % change 2002-2003 +10.7 +14.5 - 2.3 - 8.6 +10.6

Source: adapted from DP Notes: figures are for members of DP; 1Environment Ministry estimate for the whole market is 12,120 tonnes formulated product in 2001 and 12,090 tonnes in 2002

Herbicides dominate the market with a 56% share of DP value sales in 2003 (see Figure 2.7).

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Figure 2.7: Structure of the Danish market, 2003 (by value)

Insecticides 4%

PGRs 2%

Fungicides 38%

Herbicides 56%

Source: adapted from DP Notes: sales are for DP members

In volume terms, herbicides took a 75% share of the market, as lower priced ais dominate (see Figure 2.8). The top-selling herbicide ai is glyphosate, with sales of 929 tonnes in 2002, according to the Environment Ministry, followed by prosulfocarb (410 tonnes) and MCPA (145 tonnes). Chlormequat-chloride accounts for almost PGR sales.
Figure 2.8: Structure of the Danish market, 2003 (by volume ai)

Fungicides 21%

Insecticides 2%

PGRs 2%

Herbicides 75%

Source: adapted from DP Notes: sales are for DP members

Fungicides took around 38% of DP member value sales in 2003. Mancozeb and azoxystrobin came top of the list of fungicides with sales of 323 tonnes and 55 tonnes, respectively, in 2002. The most popular fungicidal seed treatment was bitertanol with sales of 10 tonnes. Insecticide accounted for only 4% of value sales for DP members in 2003. While fluctuating, sales have slipped since DP members recorded a high of DKr 77.6 million in 1995. There was a considerable fall in 2001, probably due to farmers using up stocks of formulations of the pyrethroid insecticide, esfenvalerate. Danish authorities withdrew all approvals of products Informa UK Ltd, 2004 38 www.agrowreports.com

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containing esfenvalerate before the ai could be included in Annex I of the EU agrochemical registration Directive. Dimethoate is the most important insecticide, with sales of 30 tonnes in 2002, while imidacloprid was the main insecticidal seed treatments (10 tonnes). The number of pesticide ais sold on the Danish market rose to 206 in 2002 from 198 the previous year, but the number of products fell from 962 to 943. Some 250 different herbicide products were sold in 2002, three more than in 2001. The number of fungicides fell by eight to 131, crop insecticides were six fewer at 114 and the tally of PGRs remained static at 48. 2.6.2 Pesticide use reduction policy The Danish government aims to cut pesticide use. An economic analysis in 1998 concluded that the treatment frequency index for spraying arable land could be reduced from the 1995/96 figure of 2.3 to 1.4-1.7 within five to ten years without significant economic impact on agriculture. The study formed the basis of the second Danish Pesticide Action Plan, which set an interim target of cutting pesticide use to two applications per crop per year by the end of 2001. A study of over 1,000 farms revealed this had been achieved. As part of the 2004-09 stage of the second Pesticide Action Plan, the government has set a target of reducing the treatment frequency to 1.7 by the end of 2009. This would be "financially optimal", the Danish Research Institute of Food Economics said in its 2004 update of the original economic calculations. This is due to: a large fall in commodity prices, especially maize; changes in land use; and more experience in reducing pesticide use. The government plans to achieve this through greater communication and consultancy at farm level. It will also offer subsidies to encourage conversion to organic farming. Other measures include imposing restrictive conditions on p roduct approvals, such as buffer zones by watercourses, maximum application rates and pre-harvest intervals. The government aims to establish 25,000 ha of spray-free buffer zones along targeted watercourses and lakes by the end of 2009. By the end of 2002, almost 8,000 ha of these zones had been established. The latest plan is a tough target for farmers to reach. The economic report points out that such changes in general farming practice will require more of the farmers' time and attention, and will lead t greater costs and o uncertainty. These changes will require stronger incentives in the form of quotas or increased levies and taxes. However, the government has not incorporated tax rises in the 2004-09 plan. Instead, it plans to examine in more detail the option for a revenueneutral change in the pesticide tax to base it more on the environmental impact of products. In 1998, the government raised the tax on insecticides to 54% of the retail price and on fungicides, herbicides and PGRs to 33% of the retail price. The latest study showed that tax rises may not be that effective. Despite the rises in taxes, pesticide prices have risen by only 4% since 1997. The average price of insecticides, which were hit by the largest tax increase, has even fallen by 6%.

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2.6.3

GM crops In 2004, the Danish Parliament passed a law that establishes rules for coexistence between GM and other crops. This made Denmark the first EU member state to legislate on the cultivation of GM crops since the EU called for member states to establish co-existence rules. Under Denmark's rules, which only apply to GM crops approved by the EU, farmers are required to maintain a separation distance between fields in which GM crops are cultivated and neighbouring fields of non-GM crops. They are also obliged to inform neighbouring farms about GM crop cultivation. Farmers and employees have to obtain a mandatory GMO licence and anyone handling GM crops has to attain certain education requirements. The contentious issue of liability is also tackled n the legislation. Any i organic or conventional farmer who suffers a loss of income due to contamination from GM crops will be able to claim compensation. Initially, Denmarks food authorities will manage the compensation regime, but farmers will meet most of the costs. In the long term, Denmark aims to establish an insurance system. The rules also include control activities and greater efforts into research and information, for example, internet information on the location of GM crops.

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Table 2.13: Danish agrochemical sales, 1994-2003 (DKr million, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 + 8.5 +17.5 +10.3 +68.4 +12.6

Herbicides Fungicides Insecticides PGRs Total

490.0 263.0 54.0 13.0 820.0

621.1 285.1 77.6 16.7 1,000.4

450.7 186.4 33.4 9.1 679.6

502.9 229.4 31.6 12.9 776.8

421.0 242.1 43.1 13.7 719.9

385.8 304.0 39.7 11.2 740.7

355.3 230.0 35.9 11.0 632.2

328.0 196.5 25.6 15.3 565.4

343.4 219.7 27.2 7.6 598.0

372.5 258.2 30.0 12.8 673.6

Source: adapted from DP Notes: figures are for formulated product sales by members of DP; 1 DKr = Euro 0.13464 (2003 average)

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2.7

Estonia
Estonia has a land area of 4.2 million ha, with only 698,000 ha being used for agriculture (FAOSTAT estimates for 2002). Arable land takes up around 614,000 ha and permanent pasture 67,000 ha. Cereals are particularly important, with an estimated 132,200 ha of barley, 71,900 ha of wheat and 34,400 ha of oats harvested in 2003 (FAOSTAT). A further 33,000 ha of rapeseed were also harvested. Horticulture in Estonia includes arboriculture, fruit growing, vegetable production in the open and under glass, and flowers. Crops under glass (vegetables, flowers) are concentrated in the northern part of Estonia near the larger towns, and in the vicinity of Tartu, in the eastern part of Estonia. Strawberry and currants are grown mostly in southern Estonia. In general, fruit growing is practised by small producers. Top fruit, mainly apple and plum, is grown on fertile soils in the south. Arboriculture and vegetable growing is practised in all regions of the country. The agrochemical market in Estonia was worth Euro 7.5 million in 2002. The Finnish fertiliser and crop protection company, Kemira GrowHow, estimated that the crop protection market rose by over 10% to an estimated Euro 8.2 million in 2003. Herbicides account for 50-65% of pesticide sales in the Baltic Rim region. Sales and marketing are generally managed by the major agrochemical companies from their headquarters in Scandinavia. Kemira GrowHow is the main importer and distributor of agrochemicals. It acts on behalf of Dow AgroSciences, DuPont, Monsanto and Makhteshim Agan Industries and handles some products from Bayer CropScience, BASF and Nufarm. The company estimates it has more than 45% of the Estonian crop protection market.

2.8

Finland
While Finland has a land area of 30.5 million ha, the agricultural area is only some 2.2 million ha, which is almost totally down to arable crops (FAOSTAT 2002). Cereals are the main crop, with barley (529,500 ha), oats (424,500 ha) and wheat (191,300 ha) particularly significant (FAOSTAT harvested area estimates 2003). Mixed grasses and legumes covered some 565,400 ha. The most important crops for agrochemicals are cereals and sugar beet. The Finnish agrochemical market increased by 2.1% to Euro 59.2 million ($72.5 million) in 2003 (see Table 2.14), according to the Finish Plant Production Inspection Centre (Kasvintuotannon Tarkastuskeskus KTTK), under the Ministry of Agriculture and Forestry. Volume sales also increased (see Table 2.15), continuing the trend over recent years. The change from grassland to cereals helped to maintain the high market levels of 2002 into 2003. Herbicide and fungicide sales have been boosted particularly by the adoption of zero-tillage cultivation systems, which have caused an increase in weeds and plant diseases. Fungicides made up some 20% of value sales in 2003 (see Figure 2.9), but only 12% by volume (see Figure 2.10). Sales were boosted by higher use of cereal fungicides, encouraged by price reductions. In 2002, the Finnish crop protection association (KASTE) reported a rise in the use of seed

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treatments, and fungicides for the control of potato blight ( Phytophthora infestans), which is becoming a problem ever earlier in the growing season.
Figure 2.9: Structure of the Finnish market, 2003 (by value)

PGRs 2%

Others 15%

Fungicides 20%

Agricultural insecticides 5%

Agricultural herbicides 58%

Source: adapted from KTTK

Figure 2.10: Structure of the Finnish market, 2003 (by volume)

PGRs 2%

Others 12%

Fungicides 12%

Agricultural insecticides 4%

Agricultural herbicides 70%

Source: adapted from KTTK

Insecticide sales only made up some 5% of value sales. Sales had risen in 2002, due to a notable increase in the use of dimethoate to control aphids on cereals. Although sales levelled out slightly in 2003, they still remained high. Herbicides dominate pesticide sales in Finland, with 70% of volume sales, and 58% by value in 2003. This is demonstrated when looking at volume sales of Finlands top ten ais (see Table 2.16). The two most important ais,

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glyphosate and MCPA, made up 60% of the total volume of ais sold in Finland. In all, the top ten ais made up more than 80% of total sales in 2003.
Table 2.14: Top ten Finnish ai sales, 2002-2003 (tonnes) Ai Glyphosate MCPA Dichlorprop-P Mancozeb Metamitron Carboxin Mecoprop-p Chlormequat chloride Phenmedipham Dimethoate Total
Source: adapted from KTTK

Category herbicide herbicide herbicide fungicide herbicide fungicide herbicide PGR herbicide insecticide

2002 584.7 412.9 60.8 79.8 54.7 44.5 25.7 38.5 22.5 37.0 1,361.1

2003 580.5 434.8 86.3 74.0 53.9 37.2 36.6 33.4 27.9 22.3 1,386.9

% change - 0.7 + 5.3 +41.9 - 7.3 - 1.5 -16.4 +42.4 -13.2 +24.0 -39.7 +1.9

Glyphosate sales rose sharply in 2002, due to the increased use of no-till cultivation techniques, falling prices and a good post-harvest application window in the autumn, although sales remained flat in 2003. Farmers have also been turning to phenoxy herbicides, such as MCPA and dichlorprop-p, to control certain perennial weeds that are difficult to eradicate with newer, low-rate herbicides. One of the main importer and distributors of agricultural inputs in Finland is local company, Kemira GrowHow. Kemira estimates its share in the Finnish crop protection market is about 35%. It is a distributor in Finland and the Baltic countries for the majority of pesticides from Dow AgroSciences, DuPont, Monsanto and Makhteshim-Agan Industries, sugar beet herbicides from Bayer CropScience, and some products from BASF and Nufarm. The company's business also includes the subsidiary, Verdera, which develops, manufactures and markets biopesticides and growth stimulants. In terms of the percent of organically farmed land, Finland is one of Europes leading countries, after Austria and Italy. Its first Agri-Environment Programme for 1995-99 set a goal of 120,000 ha in organic farming, and this was reached in 1998. In 2001, a committee under the Ministry of Agriculture and Forestry (MAF) launched an action plan to develop organic production for 2002-06. This targeted a minimum 10% (220,000 ha) share of agricultural area in organic production by 2006. The agricultural strategy project, under the auspices of MAF, also set a strategy for 2000-10 in 2001, stating that 15% of the arable area should be under organic production by 2010. By 2002, the organically managed area had grown to 156,692 hectares on 5,071 farms (7.0% of the land on 6.8% of the farms).

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Table 2.15: Finnish agrochemical sales, 1994-2003 (by value, by product type) 19941 19951 19961 19971 19981 19991 20001 20002 20012 20022 20032 % change 2002-2003 0 + 4.3 - 8.6 -18.6 na 0 na na + 2.1

Agricultural herbicides Fungicides Agricultural insecticides3 Other insect icides4 Insect repellents PGRs Forestry pesticides Biological pesticides Total

142.6 31.8 18.9 19.6 8.6 8.4 5.5 235.4

143.5 32.1 15.6 22.7 13.1 9.3 4.0 240.3

134.8 29.6 19.1 23.2 16.2 8.9 4.8 0.1 236.7

143.0 41.4 17.8 24.0 14.3 8.1 4.4 1.6 254.6

161.7 60.0 17.1 22.7 10.1 9.0 3.5 2.6 286.7

155.6 70.2 19.9 26.0 12.7 9.9 1.9 3.7 299.9

155.2 57.7 19.0 27.8 11.8 7.8 1.8 5.4 286.5

26.1 9.7 3.2 4.7 2.0 1.3 0.3 0.9 48.2

30.1 10.9 2.4 4.5 2.1 1.6 0.2 1.4 53.2

33.6 11.6 3.5 7.0 na 1.2 na na 58.0

33.6 12.1 3.2 5.7 1.9 1.2 0.1 1.4 59.2

Source: adapted from KTTK Notes: 1sales in FMk million; 2sales in Euro million; 3including acaricides and molluscicides, 4including household, storeroom and cowshed insecticides and rodenticides

Table 2.16: Finnish agrochemical sales of formulated product, 1998-2003 (tonnes, by product type) 1998 1999 2000 2001 2002 2003 % change 2002-2003 + 4.1 + 2.3 -12.7 - 7.9 + 5.0 + 3.0

Agricultural herbicides Fungicides Agricultural insecticides1 PGRs Others2 Total

1,962 435 136 114 412 3,059

1,875 494 190 112 469 3,140

2,030 401 158 89 483 3,161

2,563 438 107 116 455 3,680

2,930 513 181 89 515 4,228

3,050 525 158 82 541 4,356

Source: adapted from KTTK Notes: 1including acaricides and molluscicides, 2 including forest pesticides, indoor insecticides, rodenticides and insect repellents

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2.9
2.9.1

France
Agrochemical market France has a land area of more than 55.0 million ha (FAOSTAT estimates for 2002). Of this, arable land accounts for around 18.4 million ha, permanent crops 1.1 million ha and permanent pasture a further 10.0 million ha. Agriculture in France tends to be intensive and yields are amongst the highest in the world. The main crops are cereals, including wheat (with some 4.9 million ha harvested in 2003 FAOSTAT), barley (1.8 million ha), maize (1.7 million ha) and rapeseed (1.1 million ha). Other crops include grapes (851,900 ha), sunflower seeds (689,000 ha), sugar beet (402,000 ha) and dry peas (367,000 ha). Cereals are the largest crop sector for agrochemicals, accounting for just less than 40% of sales. Vines account for 20%, and fruit and vegetables for most of the rest. The agrochemical market has been in decline for several years (see Table 2.17). In 2002-03, sales by members of the French agrochemical industry association (Union des Industries de la Protection des Plantes UIPP) fell by 8.5% to Euro 1,744 million for the year ended 30 September (see Table 2.18). This reflected adverse weather: parts of south-eastern France were flooded at the start of the season, farmers were then hit by prolonged freezing conditions in the first quarter of 2003, before suffering drought over the summer. The agrochemical sector was also knocked by uncertainty surrounding the EU CAP reform negotiations, input prices and the imminent accession of ten member states to the EU. Sales of ais in volume terms fell by 11% to 74,500 tonnes in the calendar year 2003. This followed a 17% fall in 2002 to 82,500 tonnes. Since 1997, ai volumes have slumped by 32%. In 2003, the UIPP adopted a seasonal year ending 30 September as its main reporting period. Sales by UIPP members represent about 96% of the agrochemical market. Herbicides are the most important sector, at 41% of value sales in 2003 (see Figure 2.11), closely followed by fungicides, at 39%.

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Figure 2.11: Structure of the French domestic market, 2003 (by value)

Insecticides 9%

Others 11% Herbicides 41%

Fungicides 39%

Source: adapted from UIPP Notes: sales are for UIPP members for year ending 30 September

In 2004, the UIPP thought that agrochemical sales would stabilise, because of favourable weather, a 7% rise in the cereal area and realistic ai prices. However, other issues, such as a rise in sustainable farming practices and the impact of increasing regulations, would continue to weigh heavily on agrochemical manufacturers, the UIPP warned. All the leading multinational R&D-based companies are present in France. Additionally generic companies account for about 15% of the French pesticide market. Sipcam-Phyteurop and Cerexagri are the largest. One factor affecting agrochemical sales has been the loss of 113 ais as a result of the ongoing EU review of existing ais under Directive 91/414. These are due to be withdrawn by 31 December 2007 at the latest. Sales were banned from 31 March 2003 for all agricultural uses, 30 June 2003 for non-agricultural uses and 31 October 2003 for amateur purposes. Usage was banned on 31 December 2003 for all agricultural, non-agricultural and garden pesticides. While nine of these ais will be maintained in France for essential uses, the disappearance of a large number of products means minor crops will no longer be protected. New ais are being developed and will eventually receive use extensions. The Ministry of Agriculture has started addressing the issue in the last two years by simplifying approvals for minor-use crops. Another important regulatory issue is that of tank mixes. These are not authorised, although the Ministrys Food Department (GGAL) has issued preliminary guidelines with a view to setting up a regulatory framework. It is to advise a procedure for tank-mix approvals based on agronomic interest and operator safety criteria. The industry, which originally supported the idea of establishing a negative list banning mixes with proven risk, now hopes the Ministry will adopt a more pragmatic approach to tank-mix inventories, assessments and approvals, on a case-by-case basis. If the new regulations are too strict, some crops could face a severe handicap. This is

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particularly true of fruit trees, for which a ban on insecticidal/fungicidal mixes would lead to the use of more treatments and higher costs. The government is also adopting new rules, such as the Environment Charter and National Health and Environment Plan, which will add pressure on farmers to use fewer pesticides. In the light of these developments, the UIPP has shifted its focus. As well as working with the government in projects related to the Health and Environment Plan and pesticide residue monitoring, it is also adopting more of a public relations role involving increased dialogue with the general public and the promotion of sustainable farming practices. France introduced a tax on pesticides (Taxe Gnrale sur les Activits Polluantes TGAP), which came into force on 1 January 2000. It applies to older, more environmentally damaging, higher dose-rate ais, and has been extended to cover an ever-increasing number of products since its implementation. Taxation is on a sliding scale based on product toxicology. France was Europes leading organic producer in the 1980s. However, by 1998, the area of organic production had fallen to between 120,000140,000 ha, with only 4,000 farmers growing organically. The government was keen to restore its importance in France, and implemented a five-year plan to increase the area farmed organically to 1 million ha or about 5% of Frances total cultivated land by 2005. This had some success. In 2001, the French government announced that organic acreages had doubled in the previous three years, to represent 1.5% of agricultural land. By 2002, this had risen to 509,000 ha, representing 1.7% of the country's agricultural land. In 2003, this rose by 6% to 550,000 ha, although France still ranked 13th in the EU in terms of the amount of land devoted to organic farming. In 2004, France's Agriculture Ministry announced plans to invest Euro 50 million ($63 million) over five years to boost organic farming. The measures included: funding to encourage farmers to convert to organic agricultural practices; a publicity campaign, which includes clarification over the use of France's organic produce logo; and the introduction of organic farming modules in agricultural teaching. 2.9.2 Agrochemical trade France is the largest agrochemical importer in the world with pesticide imports having a value of $1,287 million in 2002 (FAOSTAT see Table 2.19). This is a reflection of the size of the French market, which is seen as the strategic market for European agrochemical producers and exporters. France was also the largest exporter of pesticides in 2002, with exports totalling $1,602 million, according to figures from FAOSTAT (see Table 2.20).

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Table 2.17: French agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +10.4 +26.7 - 5.8 + 8.6 + 9.7

Herbicides Fungicides Insecticides Others Total

540.3 332.3 200.5 59.9 1,133.0

704.6 422.4 263.2 89.3 1,479.5

699.9 408.0 280.0 107.4 1,495.3

554.9 381.4 215.3 89.3 1,240.9

593.7 467.2 257.7 100.3 1,418.8

562.2 556.7 246.9 104.1 1,469.9

570.6 473.1 241.0 103.0 1,387.8

460.0 432.0 197.6 83.9 1,173.5

433.1 547.3 214.6 92.6 1,287.6

Source: FAOSTAT

Table 2.18: French agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +14.8 +19.5 + 5.7 + 0.2 + 8.7

Herbicides Fungicides Insecticides Others Total

589.5 416.9 290.4 38.4 1,335.2

674.4 445.1 350.0 46.0 1,515.5

793.3 467.0 380.4 47.9 1,688.6

827.4 422.1 378.0 47.0 1,674.5

900.3 564.1 516.2 59.5 2,040.0

720.4 504.7 444.7 54.0 1,723.8

741.9 516.7 388.3 53.9 1,700.9

666.6 416.9 332.7 57.1 1,473.2

704.6 498.1 333.5 65.5 1,601.6

Source: FAOSTAT

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The French chemical industry association, the Union des Industries Chimiques (UIC), also produces figures for agrochemical industry trade. It reported that a 3.1% decline in agrochemical exports to Euro 1,644.2 million in 2003 was more than offset by a 9.5% drop in imports to Euro 1,258.6 million. Around 60% of exports were destined for EU countries (see Figure 2.12). FAOSTAT and UIC figures are not directly comparable, due to differences in definitions of agrochemicals.
Figure 2.12: French agrochemical exports by country, 2003 (by value)

Others 36%

Germany 16%

UK 12%

Belgium 8% Switzerland 3% US 3% Poland 4% Netherlands 4% Italy 7% Spain 7%

Source: adapted from UIPP Notes: sales are for UIPP members for year ending 30 September

Some 83% of imports were sourced from within the EU (see Figure 2.13). The trade surplus bounced back up to Euro 385.6 million ($466 million) in 2003, compared with Euro 284.5 million in 2002.

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Figure 2.13: French agrochemical imports by country, 2003 (by value)

Switzerland 4% Italy 5%

Others 15% Germany 44%

Spain 5% US 7%

Belgium 9%

UK 11%

Source: adapted from UIPP Notes: sales are for UIPP members for year ending 30 September

2.9.3

GM crops Strong opposition exists to GM crops, and none has been grown commercially. However, field trials continue. In 2003, the Ministry of Agriculture introduced a new authorisation procedure. As well as local authority opinion, members of the public can now express their views in a consultation period. Despite opposition, 14 of the proposed 16 GM trials were approved in 2003. These included GM maize, sugar beet, fescue grass and tobacco submitted by GEVES, Advanta, Syngenta, Altadis, Pioneer and Biogemma (Paris). However, a number of trial sites were destroyed in 2003. Biogemma threatened to move its GM crop research operations away from France after some of its trials were destroyed.

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Table 2.19: French agrochemical sales, 1994-2003 (Euro millions, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 -11.1 - 8.5

Calendar year Year ending 30 Sept

1,540 1,569

1,744 1,734

1,855 1,851

1,943 1,865

2,090 2,049

2,161 2,000

1,830 2,005

2,025 1,863

1,869 1,905

1,662 1,744

Source: adapted from UIPP Notes: UIPP members only

Table 2.20: French agrochemical sales, 1994-2003 (Euro millions, by product type) 19941 19951 19961 19971 19981 19991 20001 20012 20022 20032 % change 2002-2003 - 7.7 - 8.3 - 5.3 -14.3 - 8.5

Herbicides Fungicides Insecticides Others Total

592 610 192 147 1,540

675 650 216 202 1,744

788 633 217 217 1,855

780 725 218 219 1,943

875 767 206 242 2,090

873 787 243 257 2,161

662 724 206 238 1,830

731 711 181 240 1,863

779 734 170 223 1,905

719 673 161 191 1,744

Source: adapted from UIPP Notes: UIPP members only; for 1994-2000, the category figures (herbicides, insecticides etc) have been recalculated from the Franc figures, and are for the calendar year For 2001 onwards, the figures are for the year ended 30 September; 1for calendar year; 2for year ending 30 September; figures may not add due to rounding

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2.10
2.10.1

Germany
Agrochemical markets Germany has a land area of 34.9 million ha, of which 11.8 million ha are down to arable crops (FAOSTAT 2002 estimates). Permanent pasture is around 5.0 million ha, and permanent crops only 206,000 ha. The average size of farms is 43 ha and almost 60% are still part-time. The larger farms tend to be in the north or east of the country. A high proportion of smaller farms are in the south and west, where many vineyards are located. In 2003, agrochemical sales in Germany fell by 5.5% to Euro 1,071 million (see Table 2.21). This followed a 9.9% rise in 2002, due to increased demand for highly priced, novel products. However, once adjusted for inflation, the German crop protection industry association (IVA) pointed out that the German market had in fact stagnated over the previous five years. IVA members account for around 95% of the German agrochemical market. Fungicide sales were particularly hit i 2003, due to the extremely cold n winter and the hot, dry summer. The drought also reduced the need for PGRs and molluscides. In volume terms, agrochemical sales in Germany rose by 7.4% to 28,601 tonnes (see Table 2.22). The IVA attributes this to increased use of cheaper herbicides and sulfur-based fungicides that have higher application rates. By category, herbicides are particularly important, with some 50% of the market in 2003 (see Figure 2.14).
Figure 2.14: Structure of the German market, 2003 (by value)

Insecticides 10%

Others 4%

Herbicides 50%

Fungicides 36%

Source: adapted from IVA Notes: sales are for IVA members

Cereals are a major crop, with wheat accounting for a harvested area of around 3.0 million ha in 2003 (FAOSTAT) and barley 2.1 million ha. Rapeseed accounted f 1.3 million ha. Maize for forage and silage, and or green oilseeds for fodder accounted for 1.2 million ha and 2.8 million ha, respectively. This is reflected in pesticide usage, with some 6.4 million ha of cereals sprayed in 2003 (see Table 2.23). Maize and oilseed rape are also important Informa UK Ltd, 2004 53 www.agrowreports.com

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users of pesticides. The area of maize sprayed was up more than 15% in 2003, according to IVA figures.
Table 2.21: German pesticide usage by crop sector, 1994-1999, 2000, 2002-2003 (000 ha) 1994 1995 1996 1997 1998 2000 2002 2003 % change 2002-2003 - 2.5 15.1 - 4.3 - 3.5 - 0.2

Cereals Maize Rapeseed Sugar beet Total

5,890 1,550 1,058 503 9,001

6,202 1,483 974 513 9,172

6,335 1,603 853 515 9,306

6,540 1,656 918 510 9,624

6,700 1,581 1,007 504 9,792

6,655 1,427 1,046 452 9,580

6,555 1,426 1,276 461 9,718

6,389 1,641 1,221 445 9,696

Source: adapted from IVA Notes: sales are for IVA members

By value, cereals accounted for sales of some Euro 488 million in 2003 (see Table 2.24). Rapeseed accounted for 1.3 million ha. Maize for forage and silage and green oilseeds for fodder accounted for 1.2 million ha and 2.8 million ha, respectively.
Table 2.22: German pesticide product sales by main crop sector, 2003 (Euro million) Herbicides Cereals Sugar beet Maize Oilseed rape 236 1 58 84 89 Fungicides 242 7 0 43 Insecticides 10 13 7 25 Total 488 78 91 157

Source: adapted from IVA Notes: 1does not include PGRs; sales are for IVA members

The German market is dominated by Syngenta, BASF and Bayer, which together account for over 70% of sales. Other significant companies include Spiess Urania (part-owned by Mitsui & Co), DuPont and Dow AgroSciences. Generic pesticide companies account for over 10% of the market, led by Sthler Agrochemie and Feinchemie Schwebda (owned by Makhteshim Agan). The agrochemical distribution system is generally two-tiered, with private and co-operative wholesalers supplying retailers. However, in eastern Germany, a one-tier system services the large farms for the most part. The co-operatives are divided up on a regional basis with some of them amalgamating in recent years. There are fewer than ten significant private wholesalers, with the leading three accounting for over 60% of sales in the private sector. Pesticide registration has changed. Prior to 2002, the federal biological institute (Biologische Bundesanstalt BBA) was the registration authority for plant protection products in Germany. However, a major change took place on 1 November 2002, when a consumer protection law came into force. The BBA now only advises on the effect of pesticides on plants and vertebrates. Registration decisions were transferred to the newly created federal office for consumer protection and food safety (Bundesamt fr Informa UK Ltd, 2004 54 www.agrowreports.com

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Verbraucherschutz und Lebensmittelsicherheit BVL). A second body created under the new law, the federal institute for risk assessment (Bundesinstitut fr Risikobewertung BfR), makes recommendations on health concerns. The existing federal environment agency (Umweltbundesamt UBA), assess the environmental risk of products submitted for approval. 2.10.2 Agrochemical exports Germany is the home of some major global chemical companies. The country is a major producer of ais (see Table 2.25) ai production by IVA members in Germany is over three times greater than domestic requirements. As a result, the country is a major exporter (see Table 2.26).
Table 2.23: Agrochemical sales and exports of IVA members, 2000-2003 (Euro million) 2000 2001 2002 2003 % change 2002-2003 - 5.5 -16.1 -12.8

Net domestic sales Exports Total

1,037 2,253 3,290

1,031 2,404 3,435

1,133 2,542 3,675

1,071 2,134 3,205

Source: adapted from IVA

Exports fell in 2003, due to the strength of the euro. German producers were therefore unable to benefit from stabilisation in the global market, the IVA reported. FAOSTAT also supplies export figures split by product type are shown in Table 2.27 and Table 2.28. FAOSTAT and IVA figures are not directly comparable, due to differences in definitions of agrochemicals. Organic agriculture is significant in Germany. It spread quickly in 1990s, encouraged by state funding through the EU extensification programme from 1989 onwards and later the EU-Regulations 2078/92 and 1957/1999. To reach the ambitious government goal of 20% organic land by 2010, a set of measures was introduced in 2001, including the improved support of organic agriculture, the implementation of the federal programme for organic agriculture as well as the introduction of a national organic seal. The number of organic enterprises had increased to 15,628 by the end of 2002 with 696,978 ha under organic management. 2.10.3 GM crops Germany has long been seen as one of the EU countries less friendly to GM technology. In 2003, Dr Harald Seulberger, a board member of the German Association of Biotechnology Industries (DIB), for example, warned that without clear leadership from the German Chancellor and other politicians the country would "definitely miss the boat on agricultural biotechnology". He also claimed that the stance taken by the Environment Minister, Renate Kunast (Greens) was causing the German biotechnology industry to feel "blocked" for purely ideological reasons". Ms Kunast was one of the supporters of a bill governing the cultivation of GM crops, passed by the German Parliament's lower chamber (Bundestag) in June 2004. It now needs only to be formally passed by the upper chamber to become law. Under the draft legislation, farmers growing GM Informa UK Ltd, 2004 55 www.agrowreports.com

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crops will have to take measures to prevent contamination of non-GM crops and will be h eld liable if conventional or organic crops on neighbouring farms are contaminated. All farmers growing GM crops will also be obliged to provide details to a public register of where and what GM crops are being cultivated. This data will be held for 15 years. The bill has been criticised by some, including German farmers' union (DBV), which said that it would not be commercially viable for farmers to grow GM crops because of the economic risk involved In addition, the public register of where GM crops were being cultivated would make vandalism easier. This is already a problem. For example, in 2004, Syngenta scrapped field trials of GM disease-resistant wheat in Germany after environmentalists destroyed trials in the Saxony-Anhalt region. The field trials, which had been deferred from 2003 due to criminal damage, had already survived an attack earlier in the year.

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Table 2.24: German domestic agrochemical sales, 1994-2003 (by value) 19941 Herbicides Fungicides Insecticides Others Total 801 437 134 38 1,410 19951 906 575 139 56 1,676 19961 980 587 140 82 1,789 19971 1,002 677 135 93 1,907 19981 1,043 783 170 100 2,096 19991 1,002 799 172 86 2,059 20001 997 776 161 95 2,029 20002 510 397 82 49 1,037 20012 478 414 88 51 1,031 20022 515 445 105 68 1,133 20032 524 390 110 47 1,071 % change 2002-2003 + 1.7 -12.4 + 4.8 -30.9 - 5.5

Source: adapted from IVA Notes: for IVA member sales; 1sales in DM million; 2 sales in Euro million

Table 2.25: German domestic agrochemical sales, 1994-2003 (tonnes ai) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 +24.9 + 0.1 +21.4 -30.0 + 7.4

Herbicides Fungicides Insecticides Others Total

12,514 6,134 946 2,045 21,639

13,751 7,638 936 3,226 25,551

15,032 8,864 872 3,394 28,162

15,369 8,438 911 3,256 27,974

16,667 9,415 1,057 3,747 30,886

13,994 9,159 991 3,341 27,485

15,404 9,266 962 2,848 28,480

13,337 8,418 868 3,601 26,224

12,135 9,713 737 4,050 26,635

15,153 9,720 895 2,833 28,601

Source: adapted from IVA Notes: for IVA member sales

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Table 2.26: German ai production, 1994-2003 (tonnes) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 2.0 - 2.6 -17.1 + 0.5 - 3.5

Fungicides Herbicides Insecticides Others Total

29,218 36,295 15,747 16,724 97,984

33,616 41,154 17,987 18,573 111,330

31,967 39,784 14,207 14,245 100,203

33,719 37,076 13,998 18,543 103,336

37,230 36,994 13,026 21,088 108,338

33,648 39,482 13,391 18,951 105,472

35,397 36,838 11,200 14,117 97,552

38,609 22,393 11,377 14,976 87,355

38,677 21,193 10,347 16,591 86,808

37,887 20,637 8,582 16,673 83,779

Source: adapted from IVA

Table 2.27: German agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +38.5 - 6.2 +50.8 +24.0 +19.5

Herbicides Fungicides Insecticides Others Total

243.4 66.7 41.5 45.2 396.8

354.4 117.1 66.0 52.7 590.2

372.9 132.7 71.6 59.4 636.6

335.3 131.9 57.3 59.3 583.8

333.3 178.2 60.3 59.1 630.9

318.6 236.6 47.7 54.1 656.9

217.4 276.2 50.6 56.3 600.5

195.1 214.3 48.2 62.9 520.5

270.2 201.1 72.7 78.0 621.9

Source: FAOSTAT

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Table 2.28: German agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +11.9 + 9.7 + 2.2 +18.5 +10.8

Fungicides Herbicides Insecticides Others Total

544.2 568.8 270.3 193.7 1,582.01

588.8 584.1 353.7 223.6 1,750.2

545.3 642.5 372.9 243.2 1,803.9

548.1 524.0 368.4 216.3 1,656.8

574.5 615.7 326.2 244.9 1,761.3

644.1 650.6 306.0 241.7 1,842.4

609.4 719.7 293.3 236.2 1,858.5

500.1 483.9 204.8 212.9 1,401.6

559.8 530.9 209.4 252.3 1,552.4

Source: FAOSTAT

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2.11

Greece
Greece has a land area of 12.9 million ha (FAOSTAT estimates for 2002). Arable land covered an area of only 2.7 million ha, permanent crops 1.1 million ha and permanent pasture 4.6 million ha. Cereals are a major crop, with 851,300 ha of wheat, 249,800 ha maize and 100,000 ha of barley harvested in 2003 (FAOSTAT estimates). Olives covered 765,000 ha in 2003, and cotton a further 350,000 ha. Greece grows some 80% of the EU cotton area, and the crop is the largest market for agrochemicals in the country, accounting for nearly 25% of the sales value. Pome fruit, stone fruit and citrus account for around 8% of the agrochemical sales value. The agrochemical market has been in decline since 1998 (Redbond). There was a further 2.5% decrease in market size in 2002, and in real terms, the market declined by around 5%. However, sales picked up in 2003, rising 10.9% to Euro 187,300 million, according to the Hellenic Crop Protection Association, whose members account for almost 90% of the Greek market (see Table 2.29).
Table 2.29: Greek agrochemical sales by product type, 2001-03 (Euro 000) 2001 2002 2003 % change 2002-2003 +19.5 + 7.5 + 2.4 +14.7 +10.9

Herbicides Insecticides Fungicides Others Total

58,755 62,985 35,985 15,425 173,150

56,337 58,666 39,295 14,602 168,900

67,312 63,053 40,232 16,750 187,300

Source: adapted from Hellenic Crop Protection Association Notes: sales for members of the Hellenic Crop Protection Association, which account for almost 90% of the Greek market

Herbicides were the largest sector in 2003, overtaking fungicides, as their sales leapt by almost 20% (see Figure 2.15).
Figure 2.15: Structure of the Greek market, 2003 (by value)
Others 9% Herbicides 36%

Insecticides 34% Fungicides 21%

Source: adapted from Hellenic Crop Protection Association

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Notes: sales for members of the Hellenic Crop Protection Association

2.12

Hungary
About 40% of Hungary's output comes from small, mainly subsistence farms, characterized by low input use and below average yields. Hungary has a mix of very small and very large farms, with few in between. Production is divided almost evenly between large corporate and cooperative farms and small, private plots. Private producers farm 47% of arable land, with 29% worked by small producers. The country has a land area of 9.2 million ha, with arable crops accounting for around 4.6 million ha in 2002 (FAOSTAT). Permanent pasture covered around 1.1 million ha, and permanent crops only 190,000 ha. The main crops are maize and wheat, which both accounted for around 1.1 million harvested ha in 2003 (FAOSTAT). Other crops include sunflowers at 507,000 ha in 2003. During the 1990s the areas of barley, rye, sugar beet, and potatoes all declined while wheat, maize and rapeseed increased. Hungary looked set to increase its wheat area by a further 100,000 ha in 2004 to 1.2 million ha, as a result of high prices and payments linked to the country's accession to the EU. Individual crop yields are between 40-80% of those in the EU-15. Potential for further increases do exist but are linked to the use of better varieties, increased use of inputs, availability of capital and farm restructuring. Agrochemical sales in Hungary increased by 23% to Euro 212 million in 2002 (inflation is running at around 5%). The major sectors are herbicides followed by fungicides (see Table 2.30). Although sales were flat prior to 2002 there have been regular increases since the 1970s and this situation is likely to continue over the next five to ten years.
Table 2.30: Hungarian agrochemical sales by product type, 2002 (Euro million) 2002 Herbicides Fungicides Insecticides Others Total 121 55 32 4 212 % share 57 26 15 2 100

Source: adapted from ECPA 2003 Notes: 2003 figures not available

Herbicides made up 57% of sales in 2002 (see Figure 2.16).

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Figure 2.16: Structure of the Hungarian market, 2002 (by value)

Insecticides 15%

Others 2%

Fungicides 26%

Herbicides 57%

Source: adapted from ECPA 2003

Local producers in Hungary account for about 5% of crop protection product sales comprising some 80 ais (Redbond). This is likely to reduce by 50% by 2007. Within ECPA, agrochemical companies are represented by the Hungarian Chemical Industry Association (HCIA). Hungary has a comparatively positive attitude towards GM crops, compared to many EU countries. There is little public opposition to the technology.

2.13

Ireland
Ireland has a land area of 6.9 million ha, with arable crops on 1.1 million ha, and permanent pasture on a further 3.3 million ha (FAOSTAT 2002). Permanent crops cover only around 2,000 ha. The principal crop is cereals. The market is highly dependant on the weather, which determines whether crops are sown in the autumn or the spring. An estimated 183,400 ha of barley and 95,400 of wheat were harvested in 2003 (FAOSTAT). Other crops include sugar beet (31,000 ha), oats (22,500 ha) and potatoes (15,000 ha). An additional 210,000 ha of mixed grass and legumes were also grown. Irish agrochemical sales fell by 7.6% to Euro 61 million ($74 million) in the year to September 30th 2003 (see Table 2.31), according to Ireland's Animal and Plant Health Association (APHA). Sales include a small amount of non-agricultural pesticides. Volumes were down by 8.5%. After the record levels of winter wheat planted in 2002, the area fell 15,000 ha in 2003 to 65,000 ha. This contributed to the fall in sales. Disease levels were also more normal compared with 2002. Fungicides have made up the largest market segment since 2000 in terms of value sales, when they overtook herbicides. This was due to the increased use of the high-value strobilurins. In 2003, fungicides took 44% of the value market (see Figure 2.17). However, their sales fell by 16% in 2003, due mainly to a 40% slump in strobilurin sales. Increased sales of triazoles and chlorothalonil failed to offset this.

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Figure 2.17: Structure of the Irish market, 2003 (by value)

Insecticides 3%

Others 14% Herbicides 39%

Fungicides 44%

Source: APHA

Herbicides took 39% of the market in 2003. However, sales slipped by 3%. Insecticide sales also fell, by 6%. In the others category, no one segment exceeded a 3% share of the country's pesticide market. Prices of pesticides in Ireland remained fairly static over the 12-month period in the context of 3.7% inflation. However, the industry's buying power diminished by 11%. The APHA predicted that the value of the Irish pesticide market in 2004 would increase slightly, mainly due to the EU reduction of set-aside to 5%, which should stimulate a minor improvement in the cultivated area. However, the final outcome for the market will depend on sowing conditions during the spring and on disease pressures during the spring and summer months. Most of the major R&D companies are present in Ireland. Distribution is mainly through generalist merchants and co-operatives. Around 15% of sales in Ireland are made through specialist agrochemical distributors. The largest Irish generic pesticide company is Barclay Chemicals. Originally established to sell sugar beet herbicides, it has grown to become an important international generic pesticide company.

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Table 2.31: Irish agrochemical sales by product type, 1992-2003 (by value) 19941 19951 19961 19971 19981 19991 20001 20011,2 20013 20023,4 20033 % change 2002-2003 -13.5 - 2.5 -10.0 - 1.2 - 7.6

Fungicides Herbicides Insecticides Others Total

na na na na 38

12.3 18.5 na 10.3 41

18.3 19.3 na 9.4 47

18.8 21.5 na na 50

20.3 21.3 2.1 8.3 52

19.5 21.0 2.5 7.0 50

20.9 19.9 2.6 7.7 51

18.7 16.9 1.7 6.1 43

23.7 21.5 2.2 7.7 55

31.0 24.4 2.0 8.6 66

26.8 23.8 1.8 8.5 61

Source: APHA Notes: 1sales in IR million; 22001 sales converted using IR1=Euro 1.2697; 3sales in Euro million; 4derived from percentages; na = figures not available

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2.14

Italy
Italy has a land area of around 29.4 million ha, with 8.3 million ha down to arable land and 2.8 million ha down to permanent crops. Permanent pasture accounts for 4.4 million ha (FAOSTAT figures for 2002). Wheat and maize are the main crops, with a harvested area estimate of 2.3 million ha and 1.2 million ha, respectively, in 2003 (FAOSTAT). Olives accounted for 1.1 million ha, while grapevines covered 868,300 ha. Vines and top fruit are the most important sectors for agrochemicals, accounting for over 30% of usage. Maize, small grain cereals and sugar beet are each around 8-9%. Italy's downward trend in agrochemical usage stabilised in 2003, with sales rising by 0.9% to Euro 681 million (see Table 2.32). Sales are now 25% lower than ten years ago, according to Italian industry association Agrofarma. Agrofarmas sales account for 97% of the market. The volume of ais sold decreased slightly in 2003, as farmers continued to use low-rate products and adopted ICM techniques (see Table 2.33). The volume of formulated product also decreased slightly (see Table 2.34). Fungicides accounted for 35% of sales by value in 2003 (see Figure 2.18). Fungicide sales dropped by 5.1% (-3.7% in volume), as the lack of rain in the region limited product applications. By volume of ai, sulfur accounted for 26.9% of sales in 2003, and copper-based products a further 17.8%.
Figure 2.18: Structure of the Italian market, 2003 (by value)

Fumigants 2% Insecticides 26%

Others 3% Herbicides 34%

Fungicides 35%

Source: Agrofarma Notes: sales for members of Agrofarma

Herbicide sales were up by 3% in value, but down by 7% in volume, due to a switch to low-rate, high-value products. Aphid infestations on fruit plantations and a resurgence of mites ( Acarus spp), following the dry weather, gave the insecticide sector a boost of 3% in value in 2003. Volume sales decreased by 4.1%, because of changes in product usage. Mineral oil accounted for 71.1% of ai sales by volume in 2003, according to Agrofarma figures.

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Manufacturers sell through private retailers or co-ops. There are some 5,000 pesticide distributors and a new distribution tier is being created under the influence of manufacturer. Selected dealers are now acting as wholesalers as well as retaining their traditional retail function. The Italian market has always been difficult to service, as it is highly fragmented and diverse, with a large number of small sales outlets. The co-operative sector is well organised, but the central organisations have all been through a difficult financial period, with considerable restructuring. Generics companies control over 20% of the pesticide market. The most important is Sipcam. It sells some speciality products under licence from multinationals as well as a range of its own generics. The other important generic company was Caffaro but it was acquired by Isagro, which is now one of the leaders in the Italian market with around 10%. Additionally, Isagro is involved in international activities and market directly in Spain as well as Italy. The Italian government is committed to reducing agrochemical consumption and has funded research programmes to develop non-chemical approaches to crop protection. These include encouraging curative rather than preventive measures to pest control. Crop protection that relies on biological control, particularly the use of insect predators and microbial products, has grown in importance over the last decade, but is still a relatively modest part of the market.

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Table 2.32: Italian agrochemical sales of formulated product, 1994-2003 (Euro million, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 5.1 + 2.9 +3.4 +18.4 +32.2 + 0.9

Fungicides Herbicides Insecticides Fumigants Others Total

227.6 259.6 157.5 10.3 15.7 670.7

249.6 274.4 162.6 11.1 16.2 714.0

256.7 276.0 159.2 11.6 17.7 721.2

234.8 306.7 163.8 12.0 17.4 734.7

248.8 293.4 169.2 13.4 16.1 740.8

264.9 248.9 175.6 11.9 15.5 716.8

264.4 235.0 176.6 10.3 14.5 700.8

254.4 232.8 181.9 10.1 13.1 692.4

253.4 226.1 170.1 10.7 14.6 674.9

240.5 232.7 175.9 12.7 19.3 681.0

Source: adapted from Agrofarma, using their Euro conversion rates for 1994 to 2000 Notes: sales are for Agrofarma members, and account for around 97% of the market; figures may not add due to rounding

Table 2.33: Italian sales of ais, 1994-2003 (tonnes, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 1997-1998 - 7.6 - 5.8 + 9.4 +25.7 - 0.4

Fungicides Herbicides Insecticides Others Total

24,535 9,338 9,456 3,745 47,074

25,546 9,248 9,651 3,745 48,190

25,074 9,888 8,992 4,096 48,050

23,745 9,740 8,687 4,064 46,236

24,761 9,555 8,390 4,092 46,798

27,882 8,189 10,090 4,689 50,849

25,200 7,620 9,700 3,560 46,080

23,288 8,191 9,747 3,741 44,967

21,458 7,832 8,548 4,275 42,113

19,818 7,381 9,352 5,375 41,927

Source: adapted from Agrofarma Notes: sales are for Agrofarma members, and account for around 97% of the market; figures may not add due to rounding

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Table 2.34: Italian agrochemical sales of formulated product, 1994-2003 (tonnes, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 -3.7 -7.1 -3.8 +20.7 +3.2 -3.0

Fungicides Herbicides Insecticides Fumigants Others Total

46,745 25,859 33,284 4,162 4,240 114,290

49,372 25,950 33,353 4,713 4,310 117,698

48,786 25,036 31,330 4,899 4,514 114,564

45,785 25,028 30,445 5,182 4,482 110,922

47,617 23,147 28,930 6,026 3,954 109,674

49,578 20,719 27,826 5,616 3,581 107,320

49,020 20,820 26,960 4,840 3,610 105,250

44,680 21,778 25,747 4,288 3,552 100,045

41,369 21,185 23,634 4,682 3,489 94,359

39,821 19,688 22,733 5,651 3,599 91,492

Source: adapted from Agrofarma Notes: sales are for Agrofarma members, and account for around 97% of the market; figures may not add due to rounding

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2.15

Latvia
Latvia has a land area of 6.2 million ha (FAOSTAT 2002), of which around 44.4% is covered by forests. Of this, 1.8 million ha is down to arable crops. A further 29,000 ha is down to permanent crops, and 613,000 to permanent pasture. Wheat accounted for a harvested area of 150,000 ha in 2003, and barley 137,000 ha (FAOSTAT estimates). Mixed grasses and legumes covered around 315,000 ha. Information available on farm structures in Latvia is limited, but the total number of farms has declined while the average acreage has increased from 7 ha in 1994 to 14 ha in 1998. In 1998, family farms accounted for nearly one third of the total number of holdings, and had an average size of 24 ha. There are relatively few companies farming in Latvia, but where they do, the average size is slightly less than 500 ha. The agrochemical market in Latvia was worth Euro 14 million in 2002. In 2003, sales in local terms rose by almost 10% in 2003 according to Finnish fertiliser and crop protection company, Kemira GrowHow. However, in euro terms, the market slipped from Euro 14 million in 2002 to Euro 13.8 million in 2003. Kemira GrowHow is a major importer and distributor of agricultural inputs. It estimates it had over 45% of the Latvian crop protection market in 2003. The company acts on behalf of Dow AgroSciences, DuPont, Monsanto and Makhteshim Agan Industries and handles some products from Bayer CropScience, BASF and Nufarm. Sales and marketing are generally managed by the major agrochemical companies from their headquarters in Scandinavia.

2.16

Lithuania
Lithuania has a land area of 6.3 million ha, with round 2.9 million ha of arable crops, and a negligible area of permanent crops (FAOSTAT 2002). Permanent pasture covers 498,000 ha. Cereals are the main crops, with wheat accounted for a harvested area of around 336,700 ha in 2003 and barley 308,600 ha (FAOSTAT). Mixed grass and legumes account for a further 895,000 ha. The agrochemical market in Lithuania was worth Euro 30 million in 2002. This increased by Euro 1 million to Euro 31 million in 2003, the Finnish fertiliser and crop protection company, Kemira GrowHow, estimates. Herbicides account for 50-65% of pesticide sales in the Baltic Rim region. Kemira GrowHow is the main importer and distributor of agrochemicals. It estimates it had around 30% of the Lithuanian crop protection market in 2003. Kemira acts on behalf of Dow AgroSciences, DuPont, Monsanto and Makhteshim Agan Industries and handles some products from Bayer CropScience, BASF and Nufarm. Sales and marketing are generally managed by the major agrochemical companies from their headquarters in Scandinavia.

2.17

Netherlands
The Netherlands has a land area of 3.4 million ha, with arable crops covering 916,000 ha and permanent crops 33,000 ha (FAOSTAT estimates

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for 2002). Permanent pasture covers a further 1.0 million ha. Cereals are an important crop, with 134,700 ha of wheat, 56,200 ha of barley and 24,500 ha of maize harvested in 2003 (FAOSTAT estimates). Some 157,130 ha of potatoes and 110,000 ha of sugar beet were also harvested. The main sectors of the Dutch crop protection market are potatoes, horticultural crops, glasshouse crops and cereals. The multinational companies have a strong position in the market, and there are also some important local companies, including Luxan. Agrochemical sales rose by 10.4% in 2002 to Euro 263.5 million, according to figures from ECPA (see Table 2.35). The market peaked in 1998 at around Euro 270 million, followed by a steady decline until 2002 (Redbond). Market value is largely dependent on high-value horticultural crops rather than arable crops. The Dutch government increased value added tax (VAT) on agrochemicals from 6% to 17.5% on 1 January 2000.
Table 2.35: Dutch agrochemical sales by product type (Euro million) 2001 2002 % share 47 30 17 6 % change 2001-2002 +20.7 + 3.5 - 6.1 +32.5 +10.4

Fungicides Herbicides Insecticides Others Total

102.6 76.4 47.7 11.9 238.6

123.8 79.0 44.8 15.8 263.5

Source: adapted from ECPA

Fungicides were the largest sector, with 47% of sales (see Figure 2.19). This is due to the importance of horticultural crops.
Figure 2.19: Structure of the Dutch market, 2002 (by value)

Insecticides 17%

Others 6%

Herbicides 30%

Fungicides 47%

Source: adapted from ECPA

By volume, sales grew by 3% in 2002 to 8,072 tonnes (see Table 2.36), according to the Dutch agrochemical industry association, Nefyto. However, sales fell back by 2.5% in 2003, to 2001 levels. Volume sales of herbicides were down slightly at 2,210 tonnes, while the country's largest pesticide segment, fungicides, recorded a 9.8% decline to 3,230 tonnes. Informa UK Ltd, 2004 70 www.agrowreports.com

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In 2003, the number of formulated agricultural pesticides registered in the Netherlands rose by 4% in 2003 to 685, according to the Dutch pesticide registration board, the CTB. This was the first increase for a number of years. In 2002, the number of formulated agricultural pesticides registered in the Netherlands had shrunk by 5% to 656, the eighth consecutive all in the range of products available to the countrys farmers. The overall number of formulated pesticides was up by 6% to 1,386. The Netherlands had been widely perceived as having the highest agrochemical application rate per ha in Europe. The Dutch government began a programme to reduce pesticide usage with the Meerjarenplan Gewasbescherming (MJP-G), which ran from 1991 to 2000. This resulted in a reduction of almost 50% in the volume of agrochemical ais used between 1984/1988 (the base year) and 2000. This was mainly achieved by the reduction in soil sterilants from 10,247 tonnes (four-year average 1984-88) to 1,385 tonnes in 1999. The governments second ten-year pesticide plan, Zicht op gezonde teelt ("view to healthy farming"), was unveiled in July 2001. The overall aim is to reduce the environmental damage caused by pesticide use by 95% from its 1998 level by 2010. The interim target for 2005 is 75%. The plan proposed a voluntary "integrated farming" certification scheme for farmers who could show that they only used chemical pesticides when there were no alternatives. The Agriculture Ministry hoped that the plan's certification scheme would result in 90% of farmers being certified as meeting the standards of integrated farming by 1 January 2005.

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Table 2.36: Dutch ai usage, 1994-2003 (tonnes, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 9.8 - 0.2 +16.1 + 5.8 - 2.5

Fungicides Herbicides Insecticides/acaricides Others Total

3,883 2,678 439 4,169 11,169

3,990 3,070 497 3,365 10,922

3,624 3,016 513 1,930 9,083

4,356 2,984 410 2,647 10,397

5,127 2,921 396 2,277 10,721

4,564 2,842 338 2,488 10,232

4,458 2,601 259 2,382 9,700

3,628 2,172 227 1,840 7,866

3,582 2,215 186 2,090 8,072

3,230 2,210 216 2,212 7,868

Source: Nefyto

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2.18

Norway
Norway has a total land area of 30.6 million ha, of which only 3.4% is agricultural land (FAOSTAT estimates for 2002). Arable land covers 871,000 ha and permanent pasture 162,000 ha. Cereals are an important crop, with some 163,000 ha of barley, 85,200 ha of oats, 75,800 ha of wheat harvested in 2003 (FAOSTAT estimates). There were a further 485,000 ha of mixed grasses and legumes. Potatoes were also significant, at 14,500 ha. The Norwegian government instituted a pesticide use and risk reduction plan for 1998-2002. Tax levels for agrochemicals were altered from a fixed percentage of sales to criteria based on the potential risk to human health and the environment. Products with the highest potential risk were subject to the highest tax levels. The tax changes were instituted in 1999. As a result, large amounts of pesticide stocks were bought at the end of 1998 to avoid paying higher taxes. These stocks finally ran out after the 2001 growing season. Sales therefore increased slightly in 2001 and dramatically in 2002, as wholesalers, dealers and farmers replenished stocks. Ai sales were up some 58% on the previous year to 819 tonnes in 2002 (see Table 2.37), while sales of formulated products jumped 55% to 2,403 tonnes (see Table 2.38), according to the Norwegian Agricultural Inspection Service (NAIS). Sales fell back again in 2003. In 2002, the greatest increase was recorded in the market's largest segment, herbicides, with ai sales two-thirds higher than 2001. Sales had been boosted in particular by increased imports and sales of glyphosate. In 2003, herbicide sales fell back again to 463 tonnes ai, slightly higher than 1999 levels. Herbicides made up 67% of ai volume sales (see Figure 2.20).
Figure 2.20: Structure of the Norwegian market, 2003 (by volume)

Insecticides 2%

Others 7%

Fungicides 24%

Herbicides 67%
Source: adapted from Norwegian Ministry of Agriculture

By value, the market was worth Euro 19.14 million, according to estimates from the Norwegian agrochemical association, Norsk Plantevern Forening (NPF). In all, pesticide taxes cost farmers and industry more than NKr 50 million in 2002. A new pesticide use and risk reduction plan is expected for 20042008. Informa UK Ltd, 2004 73 www.agrowreports.com

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Table 2.37: Norwegian agrochemical sales, 1994-2003 (tonnes ai, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 -26.7 +12.1 +27.3 +66.7 -15.9

Herbicides Fungicides Insecticides Others Total

626 157 21 58 861

689 167 19 55 931

503 140 15 49 706

504 175 20 56 754

544 263 23 124 955

449 219 25 104 796

283 53 11 33 380

337 119 10 13 519

632 149 11 27 819

463 167 14 45 689

Source: adapted from Norwegian Ministry of Agriculture and NPF Notes: figures may not add due to rounding

Table 2.38: Norwegian agrochemical sales, 1999-2003 (tonnes formulated product, by product type) 1999 2000 2001 2002 2003 % change 2002-2003 -32.1 -10.4 +19.0 +83.8 -18.7

Herbicides Fungicides Insecticides Others Total

1,220 443 192 162 2,017

814 174 96 40 1,123

1,119 309 104 22 1,554

1,875 386 105 37 2,403

1,274 346 125 68 1,954

Source: adapted from Norwegian Ministry of Agriculture and NPF Notes: figures may not add due to rounding

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2.19

Poland
Poland has a large agricultural sector made up of private farms. There are around two million holdings, averaging 7.2 ha, compared with 19 ha in the EU-15. Some 57% are under 5 ha and only 8.5% are over 15 ha. Production is labour-intensive with comparatively low use of inputs, and high levels of subsistence and semi-subsistence farming. The country has a land area of some 30.6 million ha (FAOSTAT 2002). Arable land accounted for 13.9 million ha in 2002, and permanent pasture 4.1 million ha. Permanent crops covered only 304,000 ha. Cereals are particularly significant, with 2.3 million ha of wheat, 1.5 million ha of rye, 1.0 million ha of barley and 1.5 million ha of mixed grain harvested in 2003 (FAOSTAT estimates). Other crops include potatoes (765,771 ha), rapeseed (426,270 ha) and sugar beet (286,300 ha). Polish pesticide sales fell by 36% to Euro 309.3 million ($454.8 million) in 2002, according to a survey by the Polish Crop Protection A ssociation (PSOR). All product categories declined, with the greatest drop recorded for herbicides, which saw sales plunge 45% to Euro 157.4 million (see Table 2.39). However, three Polish companies that are not members of the PSOR did not contribute to the survey as in previous years, the Association noted. The resultant lack of data was a major factor in the reported fall in sales.
Table 2.39: Polish pesticide sales, 2001-2002 (Euro million, by product type) 2001 2002 2003 % change 2002-2003 + 7.3 -19.5 -16.8 +40.4 - 2.6

Herbicides Fungicides Insecticides Others Total

286.2 128.3 45.7 22.0 482.1

157.4 104.8 31.5 15.6 309.3

168.9 84.4 26.2 21.9 301.4

Source: adapted from the PSOR Notes: for agricultural and horticultural uses; figures may not add due to rounding; 2003 exchange rate used is Zloty 1 = Euro 0.22807

Sales in 2003 fell slightly again, to Euro 301.4 million. Sales may have been slightly inflated by inter-company sales being double counted. However, the figures represented about 90% of the Polish market in 2003. Herbicides remained the largest segment of Poland's pesticide sector in 2002, with 56% of sales, up from 51% (see Figure 2.21). Fungicides accounted for 28% of sales.

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Figure 2.21: Structure of the Polish market, 2003 (by value)

Insecticides 9%

Others 7%

Fungicides 28%

Herbicides 56%

Source: adapted from PSOR

Poland has had a GMO regulation system since 1999. This was updated in 2001, when the Parliament approved new laws to regulate the import and planting of GM food and crops. Prior to joining the EU, the Polish government had a ban on the cultivation of GM crops and the sale of GM food.

2.20

Portugal
Portugal has a total land area of 9.2 million ha (FAOSTAT 2002). The area sown to arable crops is around 2.0 million ha with a further 715,000 ha down to permanent crops, and 1.4 million ha to permanent pasture. Main crops include olives at 430,000 ha (FAOSTAT estimates for area harvested 2003), grapevines at 220,000 ha, wheat at 180,000 ha and maize at 126,000 ha. Prior to joining the EU, farms in Portugal were particularly small due to the inheritance system under which land is shared out equally to offspring. Typical farm sizes were 1 ha or less. Average farm size had increased to 9.3 ha in 2000. In 2003, sales of pesticides in Portugal slipped by 3% to Euro 115.1 million ($142.2 million), compared with restated 2002 figures (see Table 2.40). Volume sales also slid by 3% (see Table 2.41), according to the national agrochemical industry association, Associao Nacional da Indstria para a Proteco das Plantas (ANIPLA). ANIPLAs members represent 95% of the Portuguese agrochemical market, and comprise Agroquisa Agroqumicos, Bayer, BASF, Dow AgroSciences, DuPont, Fitoqumica, Monsanto, Nufarm, SAPEC, Selectis and Syngenta. Herbicide sales rose in 2003, due to heavy rains in the autumn and winter. Maize herbicide sales increased by 3%, rice herbicides were 15% higher, sugar beet herbicides were up by 12% and sales for the non-selective and non-residual herbicide sector grew by 8%.

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Fungicide and insecticide sales fell in 2003 due to the summer drought that affected much of Europe. In the fungicide sector, Portugal's largest market (see Figure 2.22), sales of sulfur-based products dropped by 12%. Fungicides for the control of Botrytis spp were down by 22%, downy mildew products fell by 8%, powdery mildew pesticides were 2% lower and scab treatments tumbled by 38%. This followed a low disease year in 2002.
Figure 2.22: Structure of the Portuguese market, 2003 (by value)

Insecticides 18%

Others 5%

Herbicides 37%

Fungicides 40%

Source: adapted from ANIPLA

The number of registered ais is decreasing as companies fail to develop ais specifically for fruit, grapevines and minor crops, which feature heavily in Portuguese agriculture. There were 257 ais in 756 products registered in Portugal at the end of 2003. This compares with 277 ais in 837 products at the end of 2002. Most ais are now developed for agronomic use. Most large companies operating in the Portuguese market do so through their Spanish subsidiaries. The Portuguese generics specialist, H erbex is the only pesticide ai producer in Portugal.

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Table 2.40: Portuguese agrochemical sales, 1994-2003 (by product type by value) 19941 19951 19961 19971 19972 19982 19992 20002 20012 20022,3 20032 % change 2002-2003 - 6.6 + 3.8 - 7.1 + 0.6 - 2.7

Fungicides Herbicides Insecticides/ acaricides Others Total

8,146 6,028 3,125 1,101 18,400

8,735 6,346 3,936 1,236 20,253

8,920 6,480 3,954 1,218 20,571

9,476 6,801 4,508 1,296 22,081

47,266 33,923 22,486 6,464 110,140

53,152 37,939 21,822 6,509 119,422

56,989 37,843 23,167 6,305 124,304

53,294 35,324 21,884 5,951 116,453

51,978 39,068 19,591 5,898 116,535

49,365 41,102 22,016 5,813 118,296

46,126 42,670 20,446 5,849 115,093

Source: adapted from ANIPLA Notes: 1figures in Esc million; 2figures in Euro 000; 3data for 2002 restated after a new member joined the ANIPLA halfway through 2003 and provided data for both 2002 and 2003 (previous total = Euro 113.9 million); sales are for ANIPLA members; figures may not add due to rounding

Table 2.41: Portuguese agrochemical sales, 1999-2003 (tonnes, by product type) 1999 2000 2001 20021 2003 % change 2002-2003 - 3.6 + 2.5 - 1.6 -14.0 - 2.9

Fungicides Herbicides Insecticides/acaricides Others Total

14,853 5,921 3,491 2,200 26,465

13,966 5,479 3,273 2,151 24,869

13,915 6,399 2,616 1,926 24,856

16,918 6,137 3,032 2,125 28,212

16,306 6,288 2,985 1,827 27,406

Source: adapted from ANIPLA Notes: 1data for 2002 were restated after a new member joined the ANIPLA halfway through 2003 and provided data for both 2002 and 2003 (previous total was 25,753 tonnes); sales are for ANIPLA members; figures may not add due to rounding

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2.21

Russia
The Russian Federation has a land area of 1,688.9 million ha (FAOSTAT estimates for 2002), of which only around 216.7 million ha is under agricultural use. Arable land covered 123.5 million ha, and permanent crops 1.8 million ha. Permanent pasture covered 91.4 million ha. Cereals are particularly important wheat accounted for a harvested area of 20.0 million ha in 2003, barley 9.2 million ha, rye 2.2 million ha and oats 3.1 million ha, with a further 3.3 million ha of maize for forage and silage (FAOSTAT 2003 estimates). Sunflower seeds, potatoes and sugar beet took 4.9 million ha, 3.2 million ha and 850,000 ha respectively. Mixed grasses and legumes accounted for 23.2 million ha. The move towards a market driven agricultural economy and the decrease in importance of state-run farms led to a severe fall in pesticide usage. Russian pesticide applications fell from 94,200 tonnes in 1990 t 36,200 o tonnes in 1997, a drop of 62%. The collapse of the economy led to huge rises in agrochemical prices. Prices were estimated to have been 5,000 times more in 1995 than in 1990. The collapse of the state-run industry led to an enormous fall in the quantity of pesticides produced by domestic manufacturers. Domestic production of pesticides averaged 215,566 tonnes annually between 1986 and 1990, but between 1991 and 1997 domestic production of pesticides fell to an annual average of 17,000 tonnes. In 1997, the seven Russian domestic pesticide manufacturers produced 17,400 tonnes of pesticides. Herbicides were most used (52%), followed by insecticides (36%) and fungicides (12%). Accurate market data for Russian agrochemical sales and usage are extremely difficult to calculate, due to a lack of local monitoring systems. In 2003, seven local agrochemical companies founded the Russian Union of Crop Protection Chemicals Manufacturers August, Altaychimprom, Vurnary Mixing Preparations Plant, Research Institute of Pesticides and Growth Regulators, Chimprom (Volgograd), Chimprom (Novotcheboksarsk) and Shchelkovo Agrochim. August general director Alexander Uskov is the organisation's president. In 2000, Russia introduced regulations on the labelling of GM food. The regulations also required importers, producers and suppliers of GM raw materials and other food ingredients to provide documentation with the products. In 2001, the government adopted new legislation to regulate the planting, industrial use and import of GM organisms, under the auspices of the Russian Ministry of Industry and Science. Notifying companies or organisations had to renew their registrations every five years. Russia introduced mandatory registration for all GM food in October 2002. The Russian Agriculture Ministry is responsible for maintaining a register of such GM food products. In 2004, it tightened the thresholds for the presence of GM material in food to correspond with EU levels. The old regulation permitted foods containing 5% or less GM material to be unmarked. Now, all foods containing 0.9% or more GM material must be clearly marked. Food derived from GMOs that does not contain GM protein or DNA must also be labelled.

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The Russian authorities and the International Service for the Acquisition of Agri-biotech Applications established the Russian Biotechnology Information Centre (RUBIC www.rubic.ru) in 2004. It aims to increase the public's awareness and acceptance of agricultural biotechnology.

2.22

Slovakia
Slovakia has a land area o 4.8 million ha, with arable land covering 1.4 f million ha in 2002 (FAOSTAT estimates). Permanent crops covered a further 126,000 ha, and permanent pasture 874,000 ha. Cereals are the main crop, with some 306,900 ha wheat, 269,300 ha barley, and 146,000 ha maize harvested in 2003 (FAOSTAT estimates). Some 131,000 ha of sunflower seeds were also harvested. In 2001, there were 6,724 farms with an average size of 306 ha. Of these, 79% were individual farms averaging 36 ha, and 21% corporate farms averaging 1,322 ha. There were 270,000 small subsistence farmers with an average size of 1.5 ha farming the remaining 16.1% or 392,000 ha of agricultural land. A substantial number of farms operating on low profitability and using hired labour will almost certainly cease operating, especially in areas where farming conditions are unfavourable. The agrochemical market in the Slovak Republic was Euro 61 million in 2002 (see Table 2.42), similar in size to that of Ireland and Finland. It represents around 1% of the EU-25 market.
Table 2.42: Slovakian crop protection market, 2002 (Euro million, by product type) 2002 Herbicides Fungicides Insecticides Others Total 34 17 5 5 61 % 55 28 8 9 100

Source: adapted from ECPA 2003

In 2002, the Slovakian government introduced laws on the mandatory labelling of food containing GMOs to bring the country in line with EU regulations. However, the issue has had a lower profile in Slovakia than in some EU countries.

2.23

Slovenia
Slovenia has a land area of 2.0 million ha, 70% of which is mountainous or hilly. As a result, only 168,000 ha were down to arable land in 2002 (FAOSTAT). Permanent crops (mainly fruit, hops and grapes) accounted for a further 30,000 ha and permanent pasture 307,000 ha. Cereals are the major crop, with some 43,000 ha of maize, 34,400 ha of wheat, and 13,700 ha of barley harvested in 2003 (FAOSTAT estimates). Other crops include grapes (15,300 ha), potatoes (6,200 ha), sugar beet (5,400 ha) and apples (3,300 ha).

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The main crops for pesticide usage are vines, maize, wheat, apples, potatoes and hops. Between 2001 and 2003, agrochemical sales in Slovenia remained stable at around Euro 22 million at wholesaler level (see Table 2.43). Agrochemical usage has grown in recent years from Euro 18 million in 1999 but dipped in 2000 due to a drop in crop areas. The market is stable or slightly decreasing, according to the local crop protection association.
Table 2.43: Slovenian crop protection market, 2002-2003 (Euro million, by product type) 2002 2003 % change 2002-2003 na na na 0

Fungicides Herbicides Insecticides Total

10 9 4 22

na na na 22

Source: adapted from ECPA 2003 and Slovenian Crop Protection Association Notes: for market at wholesale level; na = not available

Fungicides are the main product category, with some 44% of sales in 2002 (see Figure 2.23).
Figure 2.23: Structure of the Slovenian market, 2002 (by value)

Fungicides 44%

Herbicides 39%

Insecticides 17%

Source: adapted from ECPA and the Slovenian Crop Protection Association

Pinus is Slovenias leading agrochemical company. Pinus sells over 80 products into the domestic market, including many on behalf of multinational crop protection companies. The company synthesises glyphosate and triazine herbicides and exports these to Europe. The company has a subsidiary in Luxembourg to support these activities. Legislation to set up an agrochemical registration system in Slovenia based on that of the EU (Directive 91/414) came into force in 2001. In 2002, the government adopted secondary legislation to fully implement the law. This secondary legislation transposed Slovenia's equivalents of Annexes I, III and VI of the EU agrochemical registration Directive into Slovenian law. The Informa UK Ltd, 2004 81 www.agrowreports.com

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legislation covers the rules for: agrochemical registration; dossier submission requirements; and the uniform principles. The adoption of the legislation completes Slovenia's requirements for accession to the EU in this area. No GM crops are yet commercially grown in Slovenia, and there is considerable opposition to them.

2.24
2.24.1

Spain
Agrochemical markets Spain has a land area of 49.9 million ha, with arable land comprising 13.7 million ha (FAOSTAT). Permanent pasture accounted for 11.5 million ha and permanent crops 5.0 million ha. Cereals are important, with barley having a harvested area of 3.1 million ha and wheat 2.2 million ha in 2003 (FAOSTAT estimates). Olives accounted for 2.4 million ha and grapes 1.2 million ha. Cereals, olives and grapes total around 25% of pesticide sales. High-value horticultural crops, such as citrus, fruit and vegetables, are also important, and pesticide consumption on these is high, accounting for around 55% of pesticide sales. Other crops include sugar beet, potatoes, maize, rice, cotton and sunflower. Spanish agrochemical sales rose by 2.1% in 2003 to Euro 649.4 million (see Table 2.44), according to the Spanish agrochemical industry association, Asociacin Empresarial para la Proteccin de las Plantas (AEPLA). However, growth remained below inflation, as in previous years, reflecting the maturity of the market. AEPLA had 23 members in 2003, with members sales accounting for over 80% of the value market. Bayer is the market leader with about 30% of the crop protection market, just ahead of Syngenta. Another trade association, Asociacin Espaola de Fitosanitarios y Sanidad Ambiental (AEFISA), represents the smaller Catalan companies and some of the smaller national companies. Generic companies account for at least 20% of the market. The best placed are Aragonesas (a subsidiary of MA Industries), Agrodan (a subsidiary of Cheminova), Inagra (part of Sipcam-Oxon) and Nufarm (originally ETISA). Herbicides accounted for around 33% of sales (see Figure 2.24). Sales were flat, despite demand from the small-grain cereals and maize sector. Fungicide sales rose by 7.4% in 2003, driven mainly by the vegetable and fruit tree sectors. Sales were already high in 2002, due to high rainfall and humidity. Insecticide sales were also flat, with lower demand from the citrus and fruit tree sector nudging sales down by 0.2%.

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Figure 2.24: Structure of the Spanish market, 2003 (by value)

Others 12% Herbicides 33% Fungicides 24%

Insecticides 31%

Source: adapted from AEPLA

Almost 70% of the nation's agrochemical sales were made in the regions bordering the Mediterranean. Andalucia is Spain's largest regional market for agrochemicals, with sales accounting for 33.9% of the total in 2003. Valencia and Murcia took 15.6% and 10.6% market shares, respectively, while Catalonia accounted for 8.2% of the market. Private dealers dominate pesticide distribution in Spain and cooperatives account for around 15% of the agrochemicals sold. Due to stricter legislation and a higher level of technical advice, the larger dealers are getting larger and the smaller ones are going out of business. In 2002, Spain introduced the Ley de Sanidad Vegetal (phytosanitary law) to harmonise Spanish regulations on such issues as agrochemical registration procedures at EU and national levels, risk assessment, data protection and confidentiality, and maximum residue levels. This updated Spains old agrochemical laws passed in 1908 and 1952, which still regulated national and regional issues in the Spanish crop protection sector. In 2003, the ECPA called for Spain to review this legislation, claiming it reduced the level of protection given to agrochemical data during the product registration process. In a complaint submitted to the European Commission, the ECPA pointed out that the law established a system of forced data sharing that infringed regulations laid down under the EU pesticide registration Directive (91/414). The Association wanted the Commission to take action forcing the Spanish authorities to comply with its obligations under EU law. 2.24.2 GM crops The Spanish government has a favourable stance towards GM crops, which has drawn criticism from environmentalist groups. In 2003, Greenpeace and Friends of the Earth produced a report claiming that Spain had become "a Informa UK Ltd, 2004 83 www.agrowreports.com

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big experimental field for GM crops". The groups expressed concern that no official data was available on the exact area or location of GM crops, and no independent analysis of agronomic impacts of GM crops had been carried out. Furthermore, the Spanish administration had not addressed issues relating to contamination of non-GM crops with GMOs. However, industry associations are more positive. The General Association of Spanish Maize Producers (La Asociacin General de Productores de Maz de Espaa AGPME), slammed Greenpeace over its anti-biotechnology stance. It criticised the environmentalist group's tactics of intimidating farmers cultivating GM maize in the Aragon region. Spain approved its first GM crop in 1998, when Syngenta's Compa CB line of Bt maize was first approved for commercial cultivation. Nine GM insectresistant maize varieties were approved in early 2004 bringing the total of GM maize lines approved to 16. This led to US Department of Agriculture (USDA) forecasts that Spanish GM maize plantings would increase next season to 50,000 ha compared with 32,000 ha the previous year. In February 2004, the national commission for GMO monitoring (La Comisin Nacional de Biovigilancia) convened for the first time, when it discussed draft co-existence rules. The commission is also be responsible for updating the government on the development and application of GM crop varieties and for the analysis of GMO presence in seed, food and fodder. Members include biochemistry and genetics experts, representatives of agricultural organisations and government officials. It was set up by the Ministry of Agriculture to advise the government on GMOs in Spanish agriculture.

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Table 2.44: Spanish agrochemical sales, 1994-2003 (by product type) 19941 19951 19961 19971 19981 19991 20001 20002 20012 20022 20032 % change 2002-2003 + 0.8 - 0.2 + 7.4 + 1.4 + 2.1

Herbicides Insecticides3 Fungicides Others4 Total

21.9 25.4 14.1 8.0 69.3

20.3 29.0 14.3 8.6 72.1

26.8 29.8 17.4 10.0 84.0

28.6 31.6 19.7 10.6 90.5

31.3 34.7 22.5 11.3 99.7

30.0 34.1 20.7 11.5 96.3

30.6 34.0 21.8 11.0 97.4

183.9 204.1 130.9 66.2 585.1

207.1 202.0 138.5 72.6 620.1

215.7 198.7 148.0 73.7 636.1

217.5 198.4 158.9 74.7 649.4

Source: adapted from AEPLA Notes: 1figures in Ptas 000 million; 2figures in Euro million; 3insecticides include acaricides and nematicides; 4others includes PGRs and molluscicides; figures may not add due to rounding

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2.25

Sweden
Sweden has a total land area of 45.0 million ha, roughly half of which is covered by forest. Only 2.7 million ha were down to arable land (FAOSTAT 2002) and 3,000 ha to permanent crops. A further 447,000 ha was down to permanent p asture. Mixed grass and legumes accounted for 950,000 ha (FAOSTAT harvested ha estimates for 2003), wheat 411,740 ha, barley 367,580 ha and oats 279,530 ha. By value, the agrochemical market peaked in Sweden in 1999, but has decreased ever since. The value in 2002 was Euro 50.8 million (see Table 2.45), down 23% compared to 2000 and back to the 1997 level, according to the national agrochemical industry association, Industrin fr Vxt-och Trskyddsmedel (IVT), and ECPA. Sales rose slightly in 2003, to Euro 51.3 million, although the rise was even smaller in the Swedish Krona. By volume, sales rose by 18.6% in 2003 (see Table 2.46).
Table 2.45: Swedish agrochemical sales, 2002-2003 (by volume, by product sector) 20022 2003 % change 2002-2003 +21.1 +17.3 -29.0 -42.4 +18.6

Herbicides Fungicides Insecticides Others Total

1,410 173 31 33 1,646

1,708 203 22 19 1,952

Source: adapted from IVT

Herbicides are the main product sector, taking over 63% of the market in 2002 (see Figure 2.25). Insecticides accounted for only 7% of sales.
Figure 2.25: Structure of the Swedish market, 2003 (by value)

Fungicides 34%

Others 1%

Insecticides 6%

Herbicides 59%

Source: adapted from IVT

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In 1986, Sweden adopted a programme to reduce the health and environmental risks from pesticides used in agriculture. A major part of this initiative was to reduce the amount of pesticides used by 50% within five years. This initial target was achieved and by 1990 the Parliament adopted a new bill requiring an additional 50% reduction. The programme also required the regulatory authority, National Chemicals Inspectorate (KEMI) to extract more stringent toxicity and environmental fate data from those marketing pesticides. Since 1986, KEMI has suspended the use of many ais due to health or environmental reasons. The development of IPM has played an increasingly important role in Sweden in all pest and disease control, resulting in a decrease in chemical inputs. Over the last decade, the impact of pesticides on agriculture has remained an important issue at the top of the Swedish political agenda.

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Table 2.46: Swedish agrochemical sales, 1994-2003 (by value, by product sector) 19941 19951 19961 19971 19981 19991 20001 20012 20022 20032 % change 2001-2002 - 6.0 +55.9 -18.9 -12.5 + 1.0

Herbicides Fungicides Insecticides Others Total

348 102 58 5 513

276 112 19 9 416

300 139 27 10 476

293 145 25 5 468

317 167 31 6 521

335 197 67 5 604

288 175 38 8 509

29.8 18.3 3.5 0.8 52.3

31.9 14.4 3.7 0.8 50.8

30.0 17.7 3.0 0.7 51.3

Source: adapted from IVT and ECPA Notes: 1sales in SwKr million; 2sales in Euro million for 2003, these were converted using the average exchange rate of SwKr1 = Euro 0.10964

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2.26

Switzerland
Switzerland has a land area of almost 4 million ha (FAOSTAT 2002). Arable crops cover only 409,000 ha, and permanent crops 24,000 ha, while permanent pasture is over 1 million ha. Cereals are the major crop, with some 84,600 ha of wheat and 39,400 ha of barley harvested (FAOSTAT 2003 estimates). Grapevines were grown on a further 15,000 ha. Mixed grasses and legumes accounted for 90,600 ha. Agrochemical sales by members of the Swiss Society of Chemical Industries (SGCI Agrar) slipped by 4% to Euro 80.6 million in 2003 (see Table 2.47). Volume sales declined by 3.2% to 1,477 tonnes (see Table 2.48). Sales of herbicides and fungicides fell due to the hot dry summer, while insecticide sales were little changed. SGCI agrochemical member companies represent around 95% of the Swiss market in value terms and 90% in volume terms. Sales also include those generated in the principality of Liechtenstein. Herbicides are the most important sales category, with 44% of sales in 2003 (see Figure 2.26). Some 11.5% of herbicide ais sold were urea-based, making these the top-selling category of herbicides. Inorganic fungicide sales were also high, representing 70.7% of ai sales in the sector. In the insecticides sector, ais without a mineral oil base were the most popular choice, representing 67.2% of insecticide ai sales. Biological control products were also popular, representing 31.9% of insecticide ai sales.
Figure 2.26: Structure of the Swiss market, 2002 (by value)

Insecticides 10%

Others 6% Herbicides 44%

Fungicides 40%

Source: adapted from SGCI Agrar

The main market for agrochemicals are cereals and grapevines (see Figure 2.27), reflecting crop areas.

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Figure 2.27: Swiss agrochemical market by crop, 2002 (by value)

Others 3%

Cereals 30%

Maize 8%

Horticulture, soft fruit and ornamentals 4%

Potatoes 7%

Vegetables 5%

Sugar/fodder beet 7%

Oilseed rape 5% Orchards 11% Grapevines 18%

Other arable crops 2%

Source: adapted from SGCI Agrar

Switzerland is not a member of the EU, but has an ongoing process of harmonising its crop protection rules with EU law in terms of human health and environmental protection as well as the dismantling of technical trade barriers with its most important trade partners. In 2000, the Swiss Parliament passed a completely revised Chemical Law. This legislation and the Agriculture and Environment Laws formed the basis for the broad integration of EU crop protection rules into Swiss law. The Crop Protection Act, which provides regulations for the approval, labelling, packaging and use of pesticides, is being reviewed as part of the harmonisation process. It is hoped that this will prevent the unnecessary duplication of work when handling registration applications for crop protection products. The revised Act seeks the foundation of a central office for pesticide approvals. This will put a stop to the need for parallel applications at various different government offices. The revised Act is scheduled to come into force on 1 January 2005. In 2003, the Swiss Federal Council (Bundesrat) voted against introducing a "steering tax" on pesticides and fertilisers. The Council pointed out that the country already had adequate instruments in place to protect the environment, such as banned usage in sensitive areas and advisory services. It urged, however, that these be implemented more consistently and be subject to better evaluation. In particular, systematic monitoring of pesticide use and its effects on the environment should be undertaken. The Environment and Agriculture Ministry (Bundesamt fr Umwelt, Wald und Landshaft BUWAL) and the Informa UK Ltd, 2004 90 www.agrowreports.com

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Federal Office for Agriculture (Bundesamts fr Landwirtschaft BLW) should lend their support by formulating indicators to help estimate agrochemical usage and evaluate the effectiveness of environmental measures. A levy on agrochemical sales should pay for the costs of additional monitoring. This would have no adverse effect on volumes, the Council stresses.

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Table 2.47: Swiss agrochemical sales, 1994-2003 (by value, by product type) 19941 19951 19961 19971 19981 19991 20001 20011,2 20021,3 20023,4 20034 % change 2002-2003 - 2.4 - 6.9 1.2 - 9.6 - 4.3

Herbicides Fungicides5 Insecticides6 Others7 Total

59.5 50.7 16.8 6.8 133.8

59.2 47.7 16.4 7.9 131.2

57.2 47.7 15.3 8.2 128.4

54.2 46.0 14.0 6.9 121.1

54.7 43.5 13.6 7.8 119.6

55.4 48.4 12.2 6.9 122.9

57.8 46.9 13.5 7.1 125.2

61.1 48.5 13.5 7.5 130.6

54.9 49.4 12.6 7.7 124.6

37.1 33.4 8.5 5.2 84.2

36.2 31.1 8.6 4.7 80.6

Source: adapted from SGCI Agrar Notes: 1sales in SwFr million; 2sales increased by 4.2%, because of a change in the way the member companies calculated their sales; 3SGCI corrected figures downward by 5% to counter the anomaly in 2001 results; 4sales in Euro million; 5includes bactericides and seed treatments; 6includes mineral oils; 7principally PGRs; sales are for SGCI members; figures may not add due to rounding

Table 2.48: Swiss agrochemical sales, 1994-2003 (tonnes ai, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 3.1 - 5.5 +10.8 - 8.7 - 3.2

Herbicides Fungicides1 Insecticides2 Others3 Total

668 973 246 33 1,921

657 949 186 34 1,827

625 891 209 22 1,748

598 840 186 20 1,644

599 764 182 18 1,563

612 708 188 18 1,527

653 720 184 19 1,577

656 706 179 21 1,562

651 732 120 23 1,526

631 692 133 21 1,477

Source: adapted from SGCI Agrar Notes: 1includes bactericides and seed treatments; 2includes mineral oils; 3principally PGRs, although in 2002, rodenticide sales were 2.9 tonnes ai, compared with less than 1 tonne ai in previous years; sales are for SGCI members; figures may not add due to rounding

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2.27
2.27.1

UK
Agrochemical market The UK has a land area of 24.1 million ha, of which 5.8 million ha is arable and 11.1 million ha permanent pasture (FAOSTAT estimates for 2002). Permanent crops accounted for 50,000 ha. The main crops are cereals, with 1.8 million ha of wheat and 1.1 million ha of barley harvested in 2003 (FAOSTAT estimates). Other crops include rapeseed (542,000 ha), sugar beet (162,000 ha), potatoes (145,000 ha) and pulses (148,000 ha). Agrochemicals for use on cereals represent 70% of the t otal usage with cereal fungicides and herbicides being the most important markets. Factors affecting cereals, in particular the price of wheat, can have a significant impact on the market value of agrochemicals in the UK. The agrochemical market has been mature for many years, with only marginal growth in the 1990s. In 2003, sales of agrochemicals by members of the UK Crop Protection Association (CPA) rose by 2.4% to 426.3 million (see Table 2.49). Most of this (360.6 million) was accounted for by sales to the agricultural and horticultural markets. Some 17 million came from industrial and amenity sales, and 48.7 million from garden and household sales. The rise in sales was mainly because of acquisitions by member companies including Makhteshim-Agan Industries' purchase of Feinchemie Schwebda and the purchase of Griffin LLC's isoproturon herbicide business by the CGNS joint venture. The acquisitions increased the CPA's representation of the UK agrochemical market to over 95%. Successful submissions for reapprovals under the EU agrochemical registration Directive (91/414) contributed to the sales increase. Sales also benefited from a buoyant spring after a poor autumn. Furthermore, winter wheat plantings increased by 12.2% in 2003. In volume terms, sales of ais fell by 3.5% to 28,408 tonnes (see Table 2.50). This was split into 22,967 tonnes for the agricultural and horticultural markets, 4,631 for garden and household uses, and only 811 tonnes for forestry and amenity uses.
Table 2.49: UK agrochemical sales by product type, 2000-2003 (volume sales) 2000 Herbicides Fungicides PGRs Insecticides Seed t reatments Others1 Total 11,254 4,430 2,245 951 337 4,434 23,650 2001 13,737 3,722 2,399 1,061 341 5,090 26,350 2002 13,539 4,724 2,136 669 324 8,058 29,450 2003 19,556 4,160 2,386 889 395 1,022 28,408 % change 2002-2003 +44.4 -11.9 +11.7 +32.9 +21.9 -87.3 - 3.5

Source: adapted from CPA Notes: figures include sales in agriculture, horticulture, industrial, forestry, garden and household sectors for members of the CPA; 1 includes products from the agricultural sector (repellents, rodenticides, soil sterilants and molluscicides), industrial and forestry sector (herbicides in fertiliser mixes, ferrous sulfate based products and PGRs) and garden and household products (fungicides, combination fungicides/insecticides and molluscicides)

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Fungicides continue to be the most dynamic sector of the market and now account for 31% of the total value. Herbicides are the main sector sales (see Figure 2.28).
Figure 2.28: UK sales in agriculture/horticulture by product type, 2003 (by value)

Seed Treatments 5%

PGRs 2% Herbicides 50%

Others 4%

Insecticides 8% Fungicides 31%

Source: adapted from CPA

Bayer, since the acquisition of Aventis CropScience, is the leading agrochemical company, followed by Syngenta and BASF. The market can be relatively easy for generic companies to manage in terms of distribution as about six distributors control about 80% of the end-user market. Generic pesticide companies account for about 15% of the UK market. In 2001, exports by members of the CPA plummeted from 1,131 million to just 314 million (see Table 2.51). This was due to the radical restructuring of the agrochemical industry in Europe. The merger of Zeneca Agrochemicals and Novartis's agrochemical business to form Syngenta means that there is no longer a UK-based agrochemical multinational. Exports continued to fall in 2002 and 2003. By contrast, dollar figures from FAOSTAT show a much smaller fall (see Table 2.52). CPA figures show that imports have fallen from 307 million in 2002 to 249 million in 2003 (see Table 2.53). FAOSTAT figures are shown in Table 2.54. FAOSTAT and CPA figures are not directly comparable, due to differences in definitions of agrochemicals. Between 1993 and 2004, the area of UK farmland under organic production grew by 96% to 696,000 ha, or around 4% of total UK farmland. It is projected to grow by 9% per year until 2007. The UK government has an action plan to develop organic farming and food. It hopes the plan will reinforce its sustainable farming and food strategy, and increase the amount of organic food purchased and the area devoted to organic crops. The UK Voluntary Initiative (VI) is a package of voluntary measures aimed at reducing environmental damage caused by pesticide use in agriculture. It was launched in 2001 as an alternative to a pesticides tax. The UK government has welcomed it as a positive alternative to a pesticides tax, Informa UK Ltd, 2004 94 www.agrowreports.com

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and has warned that it is still reviewing the options for a tax, should the VI fail to deliver the required environmental benefits within a reasonable time. In 2004, the CPA that the VI was making good progress towards its targets. The land covered by crop protection management plans was already 464,000 ha and well in excess of its goal to cover 200,000 ha by March 2004. The number of spray operators registered with the National Register of Spray Operators was 11,059 (target 15,000) and the number of tests carried out under the National Sprayer Testing Scheme was 2,977 (target 5,000). 2.27.2 GM crops Like many EU countries, GM crops have proved controversial in the UK. In 1999, the government sponsored a farm-scale study to look at the effect of growing GM sugar beet, oilseed rape and maize on wildlife. The 5.9 million project covered 67 spring oilseed rape crops, 66 beet crops and 68 maize crops. The trials were conducted by an independent consortium of research institutes and overseen by an independent Scientific Steering Committee (SSC). This research, together with the findings of the public debate, a science review and a costs and benefits study, are being considered by the government in deciding its overall policy on GM crops. Although no GM crops have yet been grown commercially, in March 2004, the government agreed in principle to the commercial cultivation of Bayers GM T25 Chardon LL glufosinate-tolerant maize in the UK for animal feed. It pointed out that very little organic maize was grown in the UK, maize had no wild relatives there, and it was unlikely that stray plants or seeds would survive the winter. It added that it did not plan to allow the commercialisation of the GM sugar beet or oilseed rape that were tested in the farm-scale evaluations (FSEs) and would oppose their cultivation in the EU. The move was regarded as a positive step in the development of plant biotechnology in the UK, and could have seen the first commercial GM crop grown in the UK from spring 2005. The approval was based on a number of conditions. These included: restrictions on the existing EU approval for the maize to ensure it was grown under the same conditions as in the FSEs; demands that Bayer carry out further scientific analysis to monitor changes in herbicide use on conventional maize due to the phase out of the herbicide, atrazine; the addition of Chardon maize to the UK National Seeds List; and approval for the associated herbicide, Liberty (glufosinate-ammonium), for use on the GM crop. Bayer said that this would delay commercialisation until 2006/07, by which time, the variety would be outdated and economically unviable. The company has no plans to introduce any other glufosinate-tolerant maize varieties in the UK, but is concentrating on the viability of GM oilseed rape traits. The first GM crops are now not expected to be grown in the UK until 2008.

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Table 2.50: UK agrochemical sales by product type, 1994-2003 ( million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 +13.8 - 4.6 - 0.6 - 6.0 -31.8 -22.4 +2.4

Herbicides Fungicides Insecticides Seed treatments PGRs Others1 Total

222.5 119.2 47.8 21.9 9.1 24.9 445.4

236.8 137.9 51.3 22.2 12.5 22.9 483.6

252.0 152.2 47.1 27.3 16.2 22.1 516.9

232.6 147.0 44.5 26.1 13.9 24.5 488.6

217.3 155.8 42.5 25.7 17.6 33.1 492.0

215.4 146.2 38.0 24.8 13.9 34.9 473.2

176.5 143.3 36.7 23.9 13.5 32.3 426.2

205.5 115.0 39.2 21.6 8.4 27.2 416.9

190.7 137.6 32.8 21.5 11.0 22.8 416.4

217.1 131.3 32.6 20.2 7.5 17.7 426.3

Source: adapted from CPA Notes: figures include sales in agriculture, horticulture, industrial, forestry, garden and household sectors for members of the CPA; 1includes products from the agricultural sector (repellents, rodenticides, soil sterilants and molluscicides), industrial and forestry sector (herbicides in fertiliser mixes, ferrous sulfate based products and PGRs) and garden and household products (fungicides, combination fungicides/insecticides and molluscicides)

Table 2.51: UK agrochemical exports, 1994-2003 ( million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 1.4 -14.5 -24.6 - 8.0 - 8.6

Herbicides Insecticides Fungicides Others Total

505.8 250.4 86.8 29.8 872.8

550.8 265.1 113.1 33.8 962.8

739.0 295.0 149.0 53.3 1,236.3

602.4 230.3 168.9 42.6 1,044.2

547.6 225.9 280.3 31.7 1,085.5

534.9 218.2 339.0 29.1 1,121.2

577.7 188.7 332.8 31.5 1,130.7

174.8 65.1 59.2 14.9 314.0

162.7 66.1 49.2 5.0 283.0

160.4 56.5 37.1 4.6 258.7

Source: adapted from CPA Notes: CPA members exports only

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Table 2.52: UK agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +20.1 - 6.3 + 1.6 - 3.7 +5.9

Fungicides Herbicides Insecticides Others Total

118.6 365.8 261.5 238.4 984.3

142.0 384.9 313.2 234.5 1,074.6

189.6 450.7 361.7 234.2 1,235.5

271.9 414.9 280.5 212.4 1,179.7

397.5 374.4 264.7 232.8 1,269.4

466.1 317.0 223.6 208.0 1,214.7

524.3 272.1 182.0 210.2 1,188.6

382.7 240.8 166.7 189.0 979.1

459.5 225.6 169.3 182.0 1,036.4

Source: FAOSTAT

Table 2.53: UK agrochemical imports, 1994-2002 ( million) 2001 2002 2003 % change 2001-2002 +12.6 -24.4 -36.9 + 8.7 - 6.0

Herbicides Fungicides Insecticides Other Total

140.8 101.6 29.0 35.8 307.1

116.2 99.1 23.5 26.4 265.4

130.9 74.9 14.8 28.7 249.3

Source: adapted from CPA Notes: CPA members imports only

Table 2.54: UK agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +18.4 + 1.3 - 2.6 + 8.5 + 8.5

Herbicides Fungicides Insecticides Other Total

188.2 100.7 56.7 27.4 373.0

220.3 134.5 84.3 28.9 468.0

261.2 128.4 86.4 26.5 502.5

221.6 151.2 72.1 25.0 469.8

234.7 172.6 80.6 37.0 524.9

175.7 187.1 90.5 48.3 501.6

165.9 142.6 90.6 41.8 440.9

166.0 157.9 90.7 42.4 457.0

196.6 160.0 88.3 50.9 495.7

Source: FAOSTAT

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Chapter 3: North America

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CHAPTER 3: NORTH AMERICA


3.1 Introduction
North American agriculture is dominated by moderate intensity, high-area, prairie farming. The colder Canadian climate supports large areas of wheat, rapeseed and barley, while soybeans, maize and wheat account for the largest planted areas in the US. Both Canada and the US are self-sufficient in basic food requirements and are major exporters of food grains, soybeans and maize. California and Florida in the US, and the Pacific region in Canada, also support highly intensive vegetable and fruit production. The combined US and Canadian agrochemical markets accounted for agrochemical sales of $8,067 million in 2003. Herbicides dominate the North American agrochemical market, accounting for 61% of sales value in the US and 77% of sales value in Canada (see Table 3.1).
Table 3.1: North American agrochemical sales by product type, 2003 (US$ million) Country Herbicide Fungicide Insecticide Others Total % change on 2002 in national currency 0.0 + 3.1

US Canada Total

4,364 720 5,084

700 84 784

1,725 75 1,800

343 56 399

7,132 935 8,067

Source: agrochemical industry associations Notes: Canadian figures converted to US$ using average annual exchange rate of US$1 = Can$1.40097; sources are detailed in the following chapter, and do not always cover 100% of the market; figures may not add up due to rounding

North American agriculture has embraced GM technology to a greater extent than any other region in the world. Herbicide-tolerant and insectresistant soybean and maize varieties were the first to be commercialised. The US GM crop area rose by 10% in 2003, to 42.8 million ha, representing 63% of the global total, according to data from the ISAAA. This compares with 28.7 million ha in 1999. The rise in 2003 was due to significant increases in Bt maize and herbicide-tolerant maize plantings and continued growth of herbicide-tolerant soybeans. In 2004, June planting estimates from the USDA suggested that area has risen again in 2004. The US and Canada continue to pursue a policy of trade liberalisation with each other. This will include agricultural products, foodstuffs and crop protection products. Both countries are signatories to the North American Free Trade Agreement (NAFTA), along with Mexico, and pursue harmonisation policies improving trade opportunities within the region.

3.2
3.2.1

Canada
Agrochemical market Canada has a land area of over 922.1 million ha. Of this, arable land accounted for some 45.7 million ha in 2002, and pasture some 29.0 million ha, according to FAOSTAT estimates. Permanent crops took up only 135,000 ha. Cereals are particularly important, with some 10.5 million ha of

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wheat being harvested in 2003 (FAOSTAT estimates). Other cereals include barley (4.4 million ha), oats (1.6 million ha) and maize (1.2 million ha). Other crops include canola (4.7 million ha), dry peas (1.3 million ha) and soybeans (1.0 million ha). The Canadian agrochemical market fell slowly from Can$1,423.5 million in 1998 to Can$1,270 million in 2001 (see Table 3.2). Sales remained flat in 2002, reflecting the ongoing drought in the Prairie Provinces. Rises in eastern maize herbicide sales were offset by falls in the soybean market. Fruit and vegetables sparked a slight recovery of 2% in horticultural herbicide sales, while reduced usage in forestry and amenity resulted in an 11.6% fall in non-agricultural herbicide sales. Sales in 2003 rose by 3.1%, with sales of insecticides rising by 65%. The extremely long and cold winters experienced throughout most of Canada depress pest and disease populations. The agrochemical market is therefore dominated by herbicide. These accounted for 77% of agrochemical sales in 2003 (see Figure 3.1), compared with 80% in the previous year. Most herbicides sold are for use on cereals and oilseeds.
Figure 3.1: Structure of the Canadian market, 2003(by value)

Fungicides 9% Insecticides 8%

Speciality products 6%

Herbicides 77%

Source: Adapted from CropLife Canada

While the value of herbicide sales fell slightly in 2003, volumes rose by 9% due to a shift towards lower-cost products. Herbicide sales fell by 18% in value in maize, soybean and legume markets. However, canola herbicide sales rose by 8% and "chemfallow" herbicide applications increased by 65%. Herbicides for non-agricultural sectors, such as forestry and vegetation management, rose by 16%. Fungicide sales were up by 16% on 2002 due to increases in the arable and horticulture sectors, particularly in the fruit and vegetable fungicide market. Seed treatment sales recorded a 3% increase, but specialty product sales were down by 2%. Fungicides account for over half of agrochemical sales for use on high value horticultural crops, with over half of those sales being for use on potatoes.

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Strong pest pressure on cereals and canola caused sales of insecticides in the arable sector to more than double in 2003. Demand was high for insecticides to treat grasshopper infestations in western Canada. Insecticide sales for horticultural crops rose by 14%, largely due to a 32% increase in potato insecticide sales. Non-agricultural insecticide sales rose by 34%. Agrochemical sales in western Canada accounted for 77% of total revenues in 2003, with Ontario, Quebec and the Atlantic region making up the remainder. Prior to 1998, the agrochemical industry association, the Canadian Crop Protection Institute (CPI), included non-members sales to represent areas where CPI membership was weak. In 1998, the Canadian agrochemical association changed its reporting method to include just its members sales. In 2001, the Canadian Crop Protection Institute was renamed CropLife Canada. The move reflects the broadened remit of the industry association to cover agrochemicals and biotechnology and followed the renaming of the global agrochemical industry federation as CropLife International. In December 2002, Canada passed the Pest Control Products Act (PCPA) 2002, which partly mirrors the US Food Quality Protection Act (FQPA). It marked the first major overhaul of Canadian pesticide legislation in 33 years. The Act mandates additional protection for children, makes the registration system more transparent, requires companies to report adverse effects and sales data, makes re-evaluations necessary every 15 years and provides increased powers of inspection and higher penalties when pesticides are not marketed or used legally. The Canadian Pest Management Regulatory Agency (PMRA) is re-evaluating the 405 ais registered before 1994. It aims to do this by 2006. However, by March 2003, only 1.5% had been fully re-evaluated and a further 6% were subject to regulatory action or proposals. Eleven percent of the 405 ais had been discontinued or were scheduled to be withdrawn. There has been criticism over the slow progress in re-evaluation, in Canadas reliance on US reassessments for its re-evaluation programme, and in the heavy and repeated use of temporary and emergency registrations. To combat this, the agency has raised funding and increased staff numbers. 3.2.2 GM crops GM crops were approved in Canada in 1995, when canola became the first GM crop to be registered there. GM maize and soybeans have since been registered. By 2003, GM crops were grown on an estimated 4.4 million ha, up 26% on 2002. This accounts for 6% of the worlds GM crops, estimates the ISAAA. The province of Ontario is a major crop growing area, accounting for 74% of the Canadian soybean acreage and 57% of the maize acreage in 2003. Half of the soybean and maize crops were GM in 2003. By 2004, this had risen to 50-55%, according to the farming group, AGCare. Some 45% of Ontario's maize crop in 2004 expressed Bt toxins and 12% was tolerant to glyphosate. Over 90% of the Ontario canola crop consisted of GM varieties

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Monsanto planned to introduce Roundup Ready wheat in Canada in 200305, and submitted regulatory packages to the authorities in late 2002. However, that schedule began to slip as the company addressed grain handling and segregation options with the industry, and consumer acceptance issues. In May 2004, Monsanto announced it would end breeding and fieldwork on the GM wheat and postpone commercialisation for up to eight years. It blamed a shrinking market for the technology, and resistance from some sectors of the wheat industry. As only a small proportion of wheat growers would benefit from the technology, this has made acceptance problematic.

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Table 3.2: Canadian agrochemical sales, 1994-2003 (Can$ million, by product type) 1994 1995 1996 1997 19981 19991 20001 20011 20021 20031 % change 2002-2003 - 0.7 +16.0 +65.0 -11.6 +3.1

Herbicides Fungicides Insecticides Speciality2 Total

825.1 70.7 94.9 65.5 1,056.3

906.0 73.4 114.2 67.8 1,161.4

950.9 81.4 104.2 60.6 1,197.2

1,155.1 96.3 103.3 75.1 1,429.8

1,207.0 97.9 58.3 60.3 1,423.5

1,128.8 92.8 66.4 63.9 1,351.9

1,061.1 117.9 65.5 65.5 1,310.0

1,016.0 114.3 63.5 76.2 1,270.0

1,016.0 101.6 63.5 88.9 1,270.0

1,009.0 117.9 104.8 78.6 1,310.0

Source: CropLife Canada (formerly CPI) Notes: figures include urban use products, are derived from percentages and are at the ex-manufacturer level. 1from 1998, data collected from CPI members only; 2 includes seed treatments, PGRs, nematicides, soil fumigants, rodenticides and livestock products

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3.3
3.3.1

US
Agrochemical market The US has a land area of 915.9 million ha. Some 176.0 million ha is arable land and 233.8 million ha permanent pasture. Only 2.1 million ha was permanent crops in 2002, according to FAOSTAT estimates. The main crops are soybeans, maize and wheat, with 29.3 million ha, 28.8 million ha and 21.4 million ha, respectively, harvested in 2003 (FAOSTAT estimates). Other crops include cotton (4.9 million ha), sorghum (3.2 million ha), barley (1.9 million ha) and paddy rice (1.2 million ha). The country is divided into ten farming regions, not all of which contribute significantly to arable production. The Delta States produce soybeans and cotton, the Corn Belt produces maize and soybeans while the Plains produce wheat in the north and cotton in the south. Fruit and vegetables are grown throughout Florida in the southeast region, the Mountain States and the Pacific region. California, part of the Pacific region, grows vegetables, fruit and cotton. The agrochemical market grew consistently from its 1990 level of $5,312 million to $8,848 million in 1997, according to sales figures for members of the American Crop Protection Association (ACPA), now CropLife America. The market has since fallen back to $7,123 million in 2003 (see Table 3.3). Overall sales of pesticides for agricultural use fell by 1% to $5,490.8 million, representing 77% of the total. By contrast, non-crop pesticide sales rose by 3.6% to $1,641.5 million. In 2003, responses were received from 30 companies, of which six reported sales of more than $500 million, three had sales of $100-500 million and the rest were below $100 million. Herbicides make up the largest sector of agrochemicals in the US market. Their sales fell by 4.2% to $4,364.1 million, representing 61% of the US pesticide market in 2003 (see Figure 3.2). Agricultural herbicide sales fell by 5.4% to $3,531.1 million, while non-crop herbicide sales rose by 1.5% to $833 million.
Figure 3.2: Structure of the US market, 2003 (by value)

Insecticides 24%

Others 5%

Fungicides 10%

Herbicides 61%

Source: adapted from CropLife America Notes: includes total pesticides used, non-agricultural and agricultural

Maize and soybeans remained the largest crop protection markets, representing 43.9% of total sales. Both are particularly heavy users of herbicides. Soybean herbicide sales dropped by 18.7% to $749.4 million, Informa UK Ltd, 2004 104 www.agrowreports.com

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while maize herbicide sales slipped by 1.3% to $1,382.1 million (see Table 3.4). Maize insecticide sales were up by 6.5% to $280.2 million. Cotton continued as the third-largest US crop protection market, although sales were down by 9.5% to $547.3 million. Cotton herbicide sales plunged by 20% and insecticide sales were 10.4% lower than in 2002. The only other major decline was seen in tobacco pesticide sales, which fell by 19%.
Table 3.3: US agrochemical sales, 2003 ($ million, by crop sector) Crop Maize Soybeans Cotton Small grains Vegetables Non-citrus fruit Rice Citrus fruit Vines Peanuts Tobacco Sugar beet Seed treatments Alfalfa Post-harvest protectants Other crops Total not quoted above Total crop Non-crop Total Herbicides 1,382.1 749.4 186.7 300.7 71.1 40.4 133.7 80.7 38.2 27.4 3.8 74.3 0 35.9 0 148.6 70.8 3,531.1 833.0 4,364.1 Insecticides 280.2 nd 213.0 12.0 170.8 132.4 nd 52.1 26.7 nd 13.5 nd 48.2 32.9 0 75.5 36.0 1,145.8 579.3 1,725.1 Fungicides 0 nd nd 39.7 93.5 73.5 nd 15.5 36.2 55.0 nd nd nd 0 nd 32.8 112.0 513.7 186.6 700.2 Total1 1,662.2 752.7 547.3 352.4 358.5 271.3 165.2 149.1 118.5 94.5 44.2 106.2 105.2 68.8 17.5 279.5 71.0 5,490.8 1,641.5 7,132.4

Source: adapted from CropLife America Notes: 1includes PGRs, nematicides and others; nd = not quoted to avoid disclosure of individual company data

The crop sectors showing the largest increases in pesticide use in 2003 were: alfalfa (+46.4%); peanuts (+25.6%); pasture/rangeland (+23.2%); sugar beet (+20.2%); small grains other than rice (+15.9%); sorghum (+14.6%); vegetables (+12.7%) and grapevines (+12.3%). Sales of seed treatments were up by 34.8%. Exports are an important factor in US company sales. In 2002, exports of 14 member companies fell by 7% to $2,332.6 million, while total sales were down 5.4% to $9,497.4 million. This was the first time that US industry sales had dropped below $10,000 million since 1994.
Table 3.4: US agrochemical exports, 1997-2002 ($ million) 1997 1998 1999 2000 2001 2002 % change 2002-2003 na na na na +6.9

Herbicides Insecticides Fungicides Others Total

2,069 622 149 13 2,861

1,986 645 167 25 2,823

1,825 585 149 56 2,614

1,983 559 152 45 2,739

1,848 448 163 48 2,507

na na na na 2,333

Source: adapted from CropLife America Notes: na = not available

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FAOSTAT figures for exports are lower (see Table 3.6). US agrochemical imports have been gradually increasing, according to FAOSTAT figures (see Table 3.7). However, imports fell back in 2002. The Office of Pesticide Programmes (OPP), part of the US Environmental Protection Agency (EPA), is responsible for pesticide registration in the US. Pesticides are registered at the federal level under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Following receipt of a full federal label, pesticides are approved for use at the state level. States can approve commercialisation of a product before it has a full federal label if an emergency need can be proved. The FQPA, passed in 1996, significantly changed the criteria for judging food safety, increasing the safety factors imposed 10-fold in normal circumstances, and up to 1,000-fold where reproductive concerns are raised during toxicity studies. The FQPA assesses total safety to humans, combining the risk posed by food and water residues with risk from other means of exposure. The full registration of a product without reduced risk status can take up to eight years. There is a long-running issue of alleged pesticide price disparities between the US and Canada, with some claiming the higher price of pesticides in the US than Canada puts US farmers at a competitive disadvantage. There have been efforts to amend the US Federal Insecticide, Fungicide and Rodenticide Act to allow the EPA Administrator to register a Canadian pesticide for use in the US provided that it was "identical or substantially similar" to one already approved in the US. 3.3.2 GM crops GM crops have been commercialised to a greater extent in the US than in any other country. The US GM crop area rose by 10% in 2003, to 42.8 million ha, representing 63% of the global total, according to data from the ISAAA. This compares with 28.7 million ha in 1999. The rise in 2003 was due to significant increases in Bt maize and herbicide-tolerant maize plantings and continued growth of herbicide-tolerant soybeans. June planting estimates from the USDA suggest the area has risen again in 2004. For soybeans, figures indicated that 85% of the crop was planted with GM varieties (compared with 81% in 2003), with the area up by 7%. For maize, 45% (40% in 2003) of the crop was planted with GM lines, with the area up 16% on 2003. For the total maize crop, plantings were: 27% (25% in 2003) with insect-resistant Bt lines, up 11% by area on 2003 13% (11% in 2003) with herbicide-tolerant lines, up 21% by area on 2003 5% (4% in 2003) with twin-trait insect-resistant and herbicide-tolerant lines, up 29% by area on 2003.

For cotton, 76% of the upland area was planted with GM varieties, an increase in area of 7% over 2003. Some 30% (32% in 2003) of the upland cotton crop was planted with herbicide-tolerant lines, a decline in area of 5%. The area planted with Bt cotton expanded by 16%, representing 16% Informa UK Ltd, 2004 106 www.agrowreports.com

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(14% in 2003) of the upland cotton crop. The proportion of twin-trait cotton was 30% (27% in 2003), a 14% expansion in area. The introduction of GM crops has caused a drop in agrochemical sales in the US and a re-structuring of the market. These trends are expected to continue. In 2003, a study by US consultants Kline & Company (Little Falls, New Jersey) estimated that the widespread adoption of GM crops would result in a $1,000 million fall in agrochemical sales for maize, cotton and soybeans over the following five years. This trend was already been seen in the soybean sector and was likely to be repeated in maize and cotton. The rapid adoption of Roundup Ready soybeans, coupled with falling glyphosate prices due to generic competition, saw the value of the soybean herbicide market drop by 35% between 1996 and 2002. This is equivalent to more than $600 million at the grower level, Kline & Co points out. The reduced value of the soybean herbicide market has resulted in a shift in the research focus of agrochemical companies away from the development of new ais for this sector. New products continue to be developed, but they tend to be based on combinations of existing ais in order to achieve a broader spectrum of weed control. The introduction of several new insect resistance genes in maize over the next few years will greatly reduce the need for conventional insecticides to control corn rootworms, cutworms and armyworms. Kline predicts that sales of maize insecticides will plummet from $300 million in 2002 to just $70 million in 2012. After maize and cotton, the remaining crop input traits present regulatory challenges and smaller returns. However, there are opportunities to develop new businesses based on value-added traits for food, industrial and pharmaceutical uses.

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Table 3.5: US agrochemical sales, 1994-2003 ($ million, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 % change - 4.2 + 4.5 +15.9 + 6.2 0

Herbicides Insecticides Fungicides Others Total

4,706 1,714 524 355 7,300

5,034 1,865 605 405 7,909

5,554 1,846 611 322 8,332

6,027 1,819 646 356 8,848

5,510 1,711 732 374 8,326

4,923 1,677 629 389 7,618

4,979 1,840 662 355 7,837

5,000 1,607 612 311 7,529

4,554 1,651 604 323 7,133

4,364 1,725 700 343 7,132

Source: adapted from ACPA Notes: table uses restated figures, where appropriate; figures may not add up to totals, due to rounding and include imports and non-crop sales; 1the annual survey method was altered in 2003 to ease the burden on participating companies and to increase the accuracy of the data, CLA points out. Reported figures represent the first sales by CLA members in the distribution channel, irrespective of the country of original manufacture; ai sales have not been included in the figures

Table 3.6: US agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change - 5.5 + 9.4 +21.2 -14.1 0.0

Herbicides Insecticides Fungicides Others Total

597.0 302.3 150.3 113.2 1,162.8

693.9 351.5 160.4 114.5 1,320.3

713.7 370.4 173.8 116.5 1,374.4

842.8 411.3 192.6 123.7 1,570.4

934.4 455.9 220.7 135.2 1,746.1

812.8 442.1 193.0 130.0 1,577.9

779.9 423.2 155.7 133.6 1,492.4

837.0 407.3 142.3 160.9 1,547.5

790.9 445.6 172.5 138.2 1,547.2

Source: FAOSTAT

Table 3.7: US agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change -18.9 -55.0 + 1.5 +20.8 -23.1

Herbicides Insecticides Fungicides Others Total

124.0 38.3 69.0 43.6 274.9

174.1 62.0 77.3 37.0 350.4

208.1 91.1 92.6 41.4 433.2

221.2 124.1 100.3 35.9 481.5

169.9 157.5 135.3 30.4 493.1

164.6 118.4 180.2 30.7 493.9

213.5 82.7 146.3 28.6 471.2

291.2 189.0 143.3 28.8 652.4

236.1 85.1 145.5 34.8 501.6

Source: FAOSTAT

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CHAPTER 4: LATIN AMERICA


4.1
4.1.1

Introduction
Agrochemical market During the 1990s, the Latin American agrochemical market grew dynamically, and all the large international agrochemical companies took a share of this market. Many local companies, including producers, distributors and especially seed companies, were bought up by foreign concerns. The growth in the market was largely due to the very rapid acceptance of intensive agricultural practices for the production of export crops. Soybeans and maize dominate the agriculture of Latin America, with 21 million and 24 million ha, respectively being harvested in 2003 (FAOSTAT estimates), and sugar cane, coffee and fruit are also significant. For the crop protection market, soybean, bananas and maize are the main outlets, while newer sectors include vegetables and flowers. Other important crops for agrochemical inputs include citrus, rice, potatoes, cotton and wheat (mainly in Argentina). The growth of these crops aimed at the export market has driven the huge increases seen in the agrochemical markets, but has also made these countries highly dependant on world commodity prices. Weak commodity prices due to oversupply can put huge pressure on the sector. Agrochemical prices have also been hit by heavy competition from generic producers and cheap local production. Other factors affecting the market include poor organisation, low productivity, and a lack of support and investment in local agriculture. The region has suffered more than its fair share of disasters. The El Nio weather phenomenon can have a crucial influence on climate in 1998/99, for example, many areas suffered unprecedented droughts. Volcanoes, earthquakes and hurricanes have also caused extreme hardship and directly affected agricultural productivity. However, after a poor 2002, agrochemical sales recovered in 2003, with growth across the region. Brazil is the main market in Latin America, followed by Argentina (see Table 4.1).

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Table 4.1: Latin American agrochemical sales by product type, 2003 ($ million) Country Brazil Argentina Mexico1 Colombia Ecuador Chile Venezuela1 Paraguay2 Total Herbicide 1,524 454 165 88 45 36 39 45 2,396 Fungicide 714 58 118 114 59 33 16 8 1,120 Insecticide 725 96 191 63 28 27 16 44 1,190 Others 174 46 32 25 21 13 2 3 316 Total 3,136 654 507 289 153 110 82 67 4,998 % change on 2002 +60.7 +9.0 na +16.5 +6.0 na na na

Source: see individual country profiles for sources Notes: sources are detailed in the following chapter, and do not always include 100% of the market; figures may not add up due to rounding; 1figures for 2001 sales; 2figures are for 2000 sales

Economic instability in the region has taken its toll. Agrochemical sales in Brazil peaked in 1998, at $2,558 million. However, sales subsequently fell, due to the collapse of the Brazilian currency (the Real) in 1998, the continued drop in world commodity prices and catastrophic weather phenomena, before peaking again in 2003. In Argentina, the market peaked in 1997 at $654 million, and subsequently fell, as the economy collapsed. In 2002, the peso, previously pegged to the dollar, was floated; the exchange rate plunged and inflation picked up rapidly, while agrochemical sales fell to a low of $600 million, before recovering in 2003. The main association representing the R&D-based agrochemical industry is CropLife Latin America, formerly the Latin American Crop Protection Association. It represents 18 national member associations, and is the regional representative member of the global association, CropLife International. 4.1.2 GM crops The enormous agricultural areas and cash crop driven agricultural practices has made Latin America a prime market for the introduction of GM technologies. Argentina is now the second-largest market for GM crops, after the US, with an estimated 21% of world plantings. This is mainly due to its emphatic take-up of GM glyphosate-tolerant Roundup Ready soybeans, which now account for nearly all the soybean crop. As a result, the markets for soybean herbicides and grass herbicides have fallen steeply, while sales of glyphosate have escalated. GM cotton has also affected the cotton insecticide market. GM technology has proved controversial in Brazil, and, until recent legislation allowing limited plantings, it was illegal for farmers to plant GM crops there at all. However, GM soybean smuggling from Argentina meant that soybean farmers were embracing the technology anyway. As it finally becomes legal to plant GM crops in Brazil, it will cause an appreciable contraction of the soybean herbicide market, the leading agrochemical sector. If GM cotton also eventually becomes established, Brazils secondlargest market sector, cotton insecticides, will also be affected.

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4.2
4.2.1

Argentina
Agrochemical market Argentina has a land area of 273.7 million ha, with 142.0 million ha of permanent pasture (FAOSTAT 2002). Arable land covers 33.7 million ha, and permanent crops 1.3 million ha. Soybeans are the main crop, with 12.4 million ha harvested in 2003 (FAOSTAT estimates). Wheat (at 7.0 million ha), maize (2.3 million ha) and sunflowers (2.3 million ha) are also important. The acceptance of GM technology has led to large areas of GM maize, cotton and soybeans in recent years. Soybeans have been particularly successful, with a record 14.2 million ha planted in the 2003/04 season, at the expense of crops like maize and sunflowers. The crop protection market grew rapidly in the 1990s due to improved seed, fertilisers and crop protection, together with a fast take-up of direct drilling, especially of soybeans. In 1990, it was worth $252.7 million, but by 1997 the market had leapt to $924.7 million (see Table 4.2) a growth of 366% over a seven-year period. However, in 1998, the market suffered a 16.0% fall, with herbicides down by 15.6%. This was partly caused by the introduction of Roundup Ready crops, which boosted sales of glyphosate. Glyphosate prices in Argentina were among the lowest in the world, at $3/litre in 2001 (Goulston). By 2000, the whole economy was again in difficulties. In February 2002, the peso, previously pegged to the dollar, was floated; the exchange rate plunged and inflation picked up rapidly. Agrochemical sales reached a low of $600.1 million in 2002 In 2003, sales recovered, up by 9% to $653.8 million. Expansion of soybean areas and a more stable political and economic climate assisted the industry's growth, the industry association, Cmara de Sanidad Agropecuaria y Fertilizantes (CASAFE), said. Reduced infrastructure costs, the country's devalued currency, liquidated debts and increasing global commodity prices, particularly for soybeans, led to a huge improvement on the sector's profitability. Sales of CASAFE member companies represent over 80% of the total. Herbicides are the most used pesticides, with 69% of value sales in 2003 (see Figure 4.1). Glyphosate sales are particularly important, due to the GM soybean crop, and high usage of herbicides on fallow land. The different formulations and mixtures of the herbicide constituted more than 44% of the total market, with sales of over $276 million in 2003. Atrazine had the next largest market share with 11% of total sales in 2003.

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Figure 4.1: Structure of the Argentine market, 2003 (by value)

Seed treatment 5% Fungicides 9%

Others 1%

Acaricides 1%

Insecticides 15% Herbicides 69%

Source: adapted from CASAFE Notes: sales are for total market

Argentina's most used fungicide was an epoxiconazole 12.5% plus carbendazim 12.5% mixture with sales increasing 1.5% to $7 million. The seed treatment, carbendazim 10% plus thiram 10%, had the highest sales in its sector with up 11% on 2002 to $5.4 million. In 2004, the national animal and plant health inspection service (Servicio Nacional de Sanidad y Calidad Agroalimentaria SENASA) declared the country's soybean Asian rust (Phakopsora pachyrhizi) outbreaks a national agricultural disaster. It is obligatory for suspected outbreaks to be reported to the SENASA as soon as symptoms arise. By crop, soybeans represented 29.3% of the agrochemical market in 2003, down from 32% in 2002 (see Table 4.3). Sales were flat, at $191.6 million. The application of herbicide to fallow ground accounted for 20.5% of the market.

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Table 4.2: Argentinean agrochemical sales, 2003, ($ 000 by product type by crop) Herbicides % share 32.5 29.5 13.0 4.6 7.4 4.3 0.0 0.6 0.3 1.6 0.3 0.2 0.2 0.0 0.5 0.7 0.0 0.6 3.6 Insecticides % share 29.9 0.0 13.6 2.2 7.0 2.0 11.6 9.5 2.2 0.1 6.0 2.0 4.4 4.6 1.5 0.0 0.7 0.0 2.7 Fungicides % share 7.4 0.0 0.0 44.7 0.1 0.0 4.3 6.3 12.5 7.8 0.0 10.5 0.0 0.0 0.4 0.0 4.9 0.0 0.8 Total % share 29.3 20.5 11.8 8.6 7.1 3.4 2.8 2.6 2.1 2.0 1.5 1.4 1.1 0.7 0.7 0.5 0.5 0.4 3.1

Soybeans Fallow Maize Wheat Sunflowers Pasture Fruit Vegetables Citrus Peanuts Cotton Potatoes Tobacco Stored grain Kidney beans Rice Grapevines Sugar cane Others Total

147,764 134,074 58,865 21,081 33,709 19,614 48 2,803 1,188 7,129 1,420 1,105 801 0 2,492 3,014 14 2,622 16,372 454,117

28,598 0 12,989 2,118 6,679 1,881 11,098 9,053 2,076 131 5,692 1,929 4,219 4,359 1,400 9 657 19 2,597 95,549

4,294 0 0 25,869 81 0 2,478 3,644 7,250 4,525 0 6,083 16 0 210 0 2,839 0 462 57,851

191,606 134,074 77,140 55,958 46,630 22,234 18,573 16,682 13,438 13,009 10,025 9,425 6,908 4,359 4,349 3,107 3,559 2,641 20,062 653,777

Source: adapted from CASAFE Notes: at distributor level, excluding VAT; total includes acaricides, seed treatments and other chemicals; figures may not add due to rounding

FAOSTAT figures show that agrochemical imports rose to a peak in 1997, coinciding with the rise in the agrochemical market. Sales then fell sharply, to just $91.9 million in 2002 (see Table 4.4).
Table 4.3: Argentine agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2002-2003 -62.6 -19.6 -39.6 -25.0 -43.8

Herbicides Fungicides Insecticides Others Total

97.0 29.5 20.7 7.0 154.2

137.7 28.0 29.7 11.8 207.2

154.3 32.8 39.5 12.9 239.5

194.9 41.9 62.3 15.4 314.5

170.2 49.9 52.7 14.1 286.9

113.0 44.3 37.2 11.4 205.8

86.7 46.2 30.7 11.0 174.7

75.9 45.4 31.8 10.4 163.5

28.4 36.5 19.2 7.8 91.9

Source: FAOSTAT

Exports have tripled since 1994, although they fell back slightly in 2002 (see Table 4.5).

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Table 4.4: Argentine agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2002-2003 + 2.7 -23.6 -14.6 -22.7 - 6.1

Herbicides Fungicides Insecticides Others Total

28.4 0.8 9.3 3.6 42.1

42.6 1.7 11.3 4.3 59.9

32.1 2.3 12.7 3.5 50.6

44.4 3.4 33.9 5.9 87.6

53.6 3.8 39.5 5.5 102.4

74.6 4.3 37.5 5.4 121.9

61.3 4.4 37.6 6.0 109.3

71.0 5.5 47.3 7.5 131.3

72.9 4.2 40.4 5.8 123.3

Source: FAOSTAT

4.2.2

GM crops GM crops have been adopted rapidly in Argentina. In 2001, the country represented 22% of the global market for GM seeds, second only to the US with 68%. GM plantings reached some 11.8 million hectares. By 2003, Argentina remained the second-largest market, with 13.9 million ha or 21% of world plantings, according to ISAAA figures. Despite GM soybeans accounting for nearly 100% of the crop in Argentina, GM crop plantings still expanded there by 3% due to strong growth in Bt maize. Growth in the GM crop market has been due to several factors, including: a well-established seed industry; a long-standing tradition of plant breeding; a large arable area; and biosafety policy decisions. Soybeans are the main GM crop. Monsantos Roundup Ready glyphosateresistant soybeans were introduced in the 1997/98 season, comprising 2% of the soybean crop. By 2000/01, this reached 95%. Estimates suggested that 99% of the 13 million ha of soybeans planted in Argentina for the 2002/3 season were GM varieties, all of which were Monsanto's Roundup Ready soybeans. However, Monsanto suspended Roundup Ready soybean sales in Argentina in December 2003 due to losses caused from the black market in the seed. Rising glyphosate prices in 2004 were causing farmers to consider reducing soybean areas in the 2004/5 season in favour of maize. Prices of formulated glyphosate herbicides in Argentina jumped from around $4.15/litre in February to $9.08/litre in May. Herbicide price rises, coupled with exchange rate effects, reduced soybean profit margins. Chinese glyphosate exporter Zhejiang Xinan Chemical group says the rises are a result of the threat of Argentine anti-dumping tariffs on glyphosate imports and higher energy costs in China. Besides soybeans, GM maize and cotton are also grown. Syngenta has approval for Bt Maize and Aventis (now part of Bayer) for Liberty Link glufosinate-tolerant maize. Monsanto commercialised Bt cotton in 1999, and reports have shown that farmers use 50% less insecticide than those growing conventional cotton. Monsantos Roundup Ready Cotton was approved in April 2001. Following the approval of Monsantos RR cotton in 2001, there were no more approvals until 2004, when Monsanto's GM glyphosate-tolerant Roundup Ready maize was approved for commercial planting. This marked a dramatic turnaround in Argentine GMO policy. Argentina previously only authorised GM crops for commercialisation after they had been approved in the EU to avoid any export restrictions.

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The cultivation of Roundup Ready maize was approved first on a limited scale, starting with 10,000 ha. The first plantings will take place in autumn 2004, with expansion in 2005 and 2006. Monsanto estimates that the area planted with Roundup Ready maize in Argentina could reach 2 million ha if stacked traits are also approved. The company submitted an application for its twin-trait insect-resistant and herbicide-tolerant maize in 2002, and is awaiting approval. However, the size of the market will be affected by the need to receive import approvals for Roundup Ready maize in other parts of the world, notably Europe. Farmers wishing to grow Roundup Ready maize will have to pay a technology fee of $18 per bag, which is in line with the pricing range elsewhere. The approval of GM crops in Argentina is a three-step process. First, the variety is assessed for environmental safety by the National Commission on Biotechnology (CONABIA) and then for human and animal health safety by SENASA. Finally, the Agrifood Markets Unit, with the Secretariat of Agriculture, Livestock, Fishery and Food, carries out an economic assessment of the potential impact of the approval on Argentine exports of the product. In 2004, the Agriculture Ministry set up a national biotechnology office to advise on agricultural biotechnology applications, specifically relating to the release and commercialisation of GM crops. The biotechnology office operates as a division of the CONABIA. The Minister is also preparing a strategic development plan for biotechnology in agriculture for 2005-15, and proposed the creation of an ad hoc group to advise on biotechnology regulatory matters for the Mercosur region.

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Table 4.5: Argentinean agrochemical sales, 1994-2003, ($ million by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change, 2002-2003 +11.0 + 1.7 + 1.8 +27.1 - 3.0 - 6.2 + 9.0

Herbicides Insecticides Fungicides Seed treatments Acaricides Others Total

375.0 87.6 30.6 7.4 8.7 12.8 521.5

448.1 105.9 31.4 13.2 9.6 17.9 626.1

545.5 141.3 43.3 21.4 12.7 27.4 791.6

634.7 166.6 53.0 30.3 12.4 27.7 924.7

535.5 133.5 49.6 31.3 9.9 16.8 776.6

448.1 86.2 42.7 25.0 7.2 14.1 623.3

451.4 84.7 52.5 27.0 7.0 12.1 634.2

400.1 94.4 63.7 28.2 5.2 11.4 603.0

409.2 93.9 56.8 25.5 6.6 8.1 600.1

454.1 95.5 57.8 32.4 6.4 7.6 653.8

Source: adapted from CASAFE Notes: at distributor level, excluding VAT; includes sales for CASAFE and non-CASAFE members; CASAFE members took 84% of the market in 1998, 87% (1999), 82% (2000) and 81% in 2001; figures may not add due to rounding

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4.3
4.3.1

Brazil
Agrochemical market Brazil has a land area of 845.9 million ha, with permanent pasture covering 197.0 million ha (FAOSTAT 2002). Arable land accounts for 59.0 million ha and permanent crops 7.6 million ha. Major crops include soybeans (18.5 million ha harvested in 2003 FAOSTAT), maize (12.9 million ha), sugar cane (5.3 million ha), dry beans (4.1 million ha), paddy rice (3.1 million ha), wheat (2.5 million h a), green coffee (2.4 million ha) and cassava (1.7 million ha). The area of soybeans has been rising to the detriment of maize, bean, rice and cotton crops. This is due to high commodity prices and favourable planting conditions. Soybeans took some 38.9% of agrochemical sales by value in 2002, according to Sindicato Nacional da Indstria de Produtos para a Defesa Agrcola (SINDAG). This was followed by sugar cane (11.5%), cotton (9.3%), maize (8.6%) and citrus (5.9%). Until 1993, the agrochemical market was relatively stagnant and then it grew phenomenally until 1998, when again it retracted slightly (see Table 4.6). The fall in market value in 1999 reflected the economic difficulties, with the floating of the real on currency markets and its subsequent devaluation. It recovered in 2000, but fell back again in 2001 and 2002. In 2003, agrochemical sales reached their highest level ever, up 61% to $3,136 million, according SINDAG. Larger soybean and cotton crop areas and incidences of Asian soybean rust (Phakopsora pachyrhizi) were key to the sector's growth. Fungicides had the greatest sales increase for the period, driven by products to treat Asian soybean rust. The market is set to improve further in 2004. Sales in the first quarter of 2004 were 80% higher than the same period in 2003, reported SINDAG. Herbicides represent the largest sector of the market with sales increasing by 54% to $1,523.7 million in 2003 (see Figure 4.2). Glyphosate is the main product, with Roundup a strong brand. Demand for glyphosate is rising rapidly due to: a greater take-up of direct drilling systems in soybeans, maize, cotton and other major crops; the expansion of crop areas, particularly for soybeans, maize and other summer crops; and new technology for perennial crop cultivation. Brazil produces 130-150 million litres of glyphosate per year. In 2004, companies, including Monsanto, were investing $72 million in local glyphosate production.

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Figure 4.2: Structure of the Brazilian market, 2003 (by value)

Acaricides Fungicides 3% 23%

Others 3% Herbicides 48%

Insecticides 23%

Source: adapted from SINDAG

Insecticides made up some 23% of sales in 2003. The rejuvenated cotton market has allowed development of fibre exports. As a result, cotton insecticide sales more than doubled between 1997 and 1999 to $131 million, displacing maize as the top crop for insecticides. Acaricides made up only 3% of sales. Some 85% of acaricides are used on citrus crops. Soybeans accounted for 45% of agrochemical sales in 2003 (see Figure 4.3), with high crop prices leading to increased plantings. This was followed by cotton, with 10% of the market.
Figure 4.3: Structure of the Brazilian market by crop, 2003 (by value)

Coffee 3% Wheat 3%

Others 19% Soybeans 45%

Citrus 4%

Sugar cane 8%

Maize 8%

Cotton 10%

Source: adapted from SINDAG

Just three regions accounted for 53% of agrochemical sales in 2003 So Paulo (with sales of $584.5 million), Mato Grosso ($574.2 million) and Paran ($527.8 million). Other states with significant sales were Rio Grande do Sul ($315.5 million), Gois ($305.3 million), Minas Gerais ($211.0 million), Mato Grosso do Sul ($189.6 million), Bahia ($147 million) and Santa Catarina ($81.5 million).

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The crop protection industry has the following bodies representing it: ANDEF Associao Nacional de Defensa Vegetal, comprising mainly R&D companies and which represents 85% of the crop protection market AENDA Associao das Empresas Nacionais de Defensivos Agrcolas, representing most of the generic producers SINDAG Sindicato Nacional de Indstria de Produtos para Defensa Agrcola, which unifies the two preceding organisations

Brazil has a thriving organic sector. The organic agriculture area in Brazil reached 841,000 ha in 2004, making it the fifth largest in the world, according to German non-governmental organisation Sol Ecology and Agriculture. The market for organic crops is growing due to increased domestic demand and the direct and forward purchase schemes. Under these schemes, farmers can sell produce directly to the government for social programmes, such as the Zero Hunger (Zero Fome) scheme, and also sell crops before the planting season at market prices set by the national supply company, the Conab. In 2004, the government established a new law governing the certification and marketing of organic produce. The legislation defines organic agriculture and aims to eliminate any confusion relating to the labelling of organic produce. There is an active agrochemical production and export industry in Brazil. Exports go primarily to other Mercosur markets. Exports rose by 30% in 2002, according to FAOSTAT figures (see Table 4.7). However, this was still below the high of 1998, when exports reached $197 million.
Table 4.6: Brazilian agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2002-2003 - 1.4 +69.3 -23.6 -20.6 + 0.2

Herbicides Fungicides Insecticides Others Total

51.7 4.7 23.6 6.7 86.7

53.0 6.1 33.4 12.6 105.1

108.0

107.1 15.7 72.7 16.4 211.9

153.5 32.1 78.9 20.5 285.0

153.1 42.5 83.5 17.1 296.1

115.6 42.2 90.4 17.5 265.8

129.8 46.4 108.2 20.2 304.6

127.9 78.6 82.6 16.1 305.2

Source: FAOSTAT

Imports were up marginally at $305 million (see Table 4.8).


Table 4.7: Brazilian agrochemical exports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2002-2003 +17.6 +54.4 +30.6 +20.2 +30.2

Herbicides Fungicides Insecticides Others Total

57.7 22.0 18.1 4.4 102.2

66.9 29.0 26.0 5.6 127.5

71.2 31.2 34.9 8.8 146.1

100.9 33.7 47.0 9.6 191.2

99.5 36.9 50.3 10.7 197.4

65.6 39.4 40.0 8.6 153.6

50.1 45.1 40.0 11.2 146.3

62.2 32.9 37.2 11.6 143.9

73.2 51.7 48.6 13.9 187.4

Source: FAOSTAT

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4.3.2

GM crops GM crops have long been controversial in Brazil. The first GM crops approved were Monsantos Roundup Ready glyphosate-tolerant soybeans in 1998, when the Comisso Tcnica Nacional de Biossegurana (CTNBio) ruled that these were safe for the environment and human and animal consumption. However, the CTNBio had not waited for the usual five-year environmental impact assessment from the Environment Ministry (IBAMA). Greenpeace, a consumer group (Idec) and the IBAMA challenged the decision and won an injunction against commercial planting of the soybeans. Monsanto and the federal government launched an appeal to overturn the decision and to defend the CTNBio's authority on GMOs. In July 2004, the Federal Court (Tribunal Regional Federal TRF) ruled that CTNBio could regulate GM crops in Brazil. However, the ruling on Roundup Ready soybeans remained unchanged, as they were still governed by the 1998 injunction preventing the sale of Roundup Ready soybeans in Brazil. In September 2004, Monsanto launched an appeal against the TRF ruling on Roundup Ready soybeans. The Idec is also appealing against the TRF ruling on the CTNBio's authority to regulate GM crops. In the meantime, Brazilian farmers have been planting GM soybean seed since 1997, smuggled over the border from Argentina. The GM soybeans have lower pesticide input costs and higher yields. Larger areas of GM crops are being grown. In 2003, the Ministry of Agriculture gave a conservative estimate that 12% of the 49 million tonnes of soybeans produced were transgenic. As the growers were obtaining Roundup Ready seed illegally, they had not been paying royalties. The American Soybean Association estimated that this gave them a competitive advantage over US growers of $23-38/ha. Brazil is developing a biosafety bill (9/2004) to provide clear rules on the importation, planting and commercialisation of GM crops to avoid legal loopholes and to comply with the Cartagena Protocol on Biosafety. To clarify the situation in the meantime, the government passed Provisional Decree 131/03 in September 2003. This allowed the temporary planting of GM soybeans in the 2003/04 season as long as crops were registered by 9 October 2003. The decree was ratified in December 2003, when the government passed Law 10.814. The decree restricted the cultivation of GM soybeans to the Rio Grande do Sul region and only allowed the GM seed to be planted until 31 December 2003, effectively limiting the approval for one growing season. Farmers had to sign contracts specifying the use of the GM seeds, which made them liable for any environmental damage caused by the GM soybeans or for any cross-contamination incidents. In 2004, Monsanto agreed a deal in Rio Grande do Sul on the payment of royalties for use of Roundup Ready soybeans. After eight months of negotiations, the main farmers' groups in the state, including Farsul and Fecoagro, agreed that their members would pay Real 10-20 ($3.50-6.90) per tonne of harvested Roundup Ready soybeans in the 2004 and 2005 seasons.

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The authorities estimated that GM soybeans accounted for 13.2% (2.8 million ha) of the total soybean area in Brazil in 2004. Rio Grande do Sul had the largest area of GM soybean plantings in Brazil at 2.6 million ha. However, the authorities detected the presence of illegally grown GM soybeans in 117 out of 7,300 test batches. In the tests, 296 incidences of GM material were found, only 88 of which were from producers who had signed a letter of intention to plant GM crops. The culprits will have to pay a fine or their crops may be confiscated. In February 2004, the biosafety bill (9/2004) was passed by the lower house of Congress. It originally stated that the national technical commission for biosafety (CTNBio) should only be able to regulate research on GMOs, while the government would be the final authority on their commercialisation. In July 2004, as mentioned above, the Federal Court confirmed the CTNBio's authority to regulate the commercialisation of GM crops by ruling in favour of the CTNBio's 1998 decision to permit the planting of Monsanto's Roundup Ready maize in Brazil. In August 2004, the bill was amended by the Senate's Education Commission to give the CTNBio the power to regulate the commercialisation of GM crops. The bill must now pass through a further three commissions (social affairs, economic affairs, and constitution and justice) before being voted on by the Senate and finally returning to the lower house of Congress once more for approval. Industry pressure to approve the law before the beginning of the 2004/05 Brazilian soybean planting season. Brazil will extend its temporary Law 10.814 on the planting of GM soybeans if the country's new biosafety bill is not passed by 1 October. Some legislation must be passed in time for the 2004/05 season due to begin in October. More than 40 varieties of GM soybeans have been approved by the Ministry of Agriculture and are ready for commercialisation as soon as the new biosafety law is passed. Other GM crops are in the pipeline for Brazil. Meanwhile, the government is taking a harder line with illegal GM cotton crops than with illegal GM soybean crops. It claims this is due to the increased risk of cross-pollination. Also, using unauthorised seed could introduce exotic diseases into the country. The Ministry is carrying out tests for GM material on all cotton crops and illegal GM cotton crops will be destroyed

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Table 4.8: Brazilian agrochemical sales, 1994-2003, ($ million by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 +54.3 +55.0 +98.0 +11.0 +46.8 +60.7

Herbicides Insecticides Fungicides Acaricides Others Total

777 300 211 91 26 1,404

835 339 227 100 35 1,536

1,005 376 276 92 43 1,793

1,214 465 358 87 68 2,181

1,389 582 436 106 86 2,558

1,176 698 422 76 66 2,329

1,300 690 380 65 63 2,500

1,143 631 363 66 85 2,288

988 468 360 72 64 1,952

1,524 725 714 80 94 3,136

Source: adapted from SINDAG Notes: figures may not add up due to rounding

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4.4
4.4.1

Chile
Agrochemical market Chile has a land area of 74.9 million ha, with permanent pasture covering 12.9 million ha in 2002 (FAOSTAT estimates). Arable land covered 2.0 million ha and permanent crops 325,000 ha. The main arable crop is wheat, with a harvested area of 416,000 ha in 2003 (FAOSTAT estimates). Other major crops included oats (104,620 ha) and grapes (168,000 ha). Some 270,000 ha of mixed grasses and legumes were harvested. Agrochemical sales in Chile amounted to $110 million in 2003, according to data provided by the national agrochemical industry association of Chile, Asociacin Nacional de Fabricantes e Importadores de Productos Fitosanitarios Agrcolas (AFIPA). Figures for 1999 to 2001 and 2003 in Table 4.9 are not directly comparable see table notes.
Table 4.9: Agrochemical sales by AIFPA members, 1999-2001, 2003 ($ 000, by product type) 19991 20001 20011 2003 % share of market 33.0 30.4 24.8 11.9

Herbicides Fungicides Insecticides Others Total

36,217 18,931 21,493 6,213 82,854

35,729 23,550 21,606 7,457 88,342

33,050 21,803 23,441 6,585 84,879

36,250 33,454 27,251 13,044 109,999

Source: 1999 to 2001figures adapted from Magan Chile, 2003 adapted from AIFPA Notes: 1figures are at the first distributor level; the average mark-up is 40% to first distributor price (including 7% import duty on products from the US, EU and Israel and average 25% distributor margin), which gives a market value of $120 million at the distributor level in 2002 (Goulston)

Herbicides were the main product sector in 2003 (see Figure 4.4). Figures from 2001 show that glyphosate was by far the biggest selling product by value (Goulston). Half goes into forestry while most of the rest goes to fruit and nut orchards and vineyards. The broad-spectrum insecticide, chlorpyrifos, was ranked second. Captan and iprodione for apples and vines, respectively, were the most important fungicides.

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Figure 4.4: Structure of the Chilean market, 2003 (by value)

Others 12%

Herbicides 33%

Fungicides 25%

Insecticides 30%

Source: adapted from AIFPA

Approximately 60% of agrochemicals are used on fruit, with table grapes accounting for 40% of this. The PGRs, gibberellic acid (mainly for increasing fruit size of seedless grapes) and hydrogen cyanamide (for breaking of dormancy of grapes and fruit trees), are among the best selling products. Around 12% of total usage is dedicated to the main field crops, especially wheat, maize and sugar beet and most of the rest goes into the considerable forestry sector. There are 1.7 million hectares of commercial forests, mainly pines, eucalyptus and native species. Up to 160,000 ha of new forests are established annually. The main agrochemical inputs are herbicides, including 50% of glyphosate usage. Also the triazines, especially atrazine and simazine, in mixture with paraquat, are used to establish planting areas. 4.4.2 GM crops Under current legislation, Chile allows only field trials of GM crops and the export of GM seed. In 2004, Chile's National Commission for the Development of Biotechnology proposed changes to allow the commercial cultivation of GM crops. The changes would be set within a framework of risk evaluation and include measures to guarantee safety, the government pointed out. Chile would monitor consumer attitudes towards GMOs in importing countries and ensure that co-existence measures were implemented. This was to ensure that Chile had an advantage against competitors that had been hastier in embracing GM crops. The commercial planting of GM crops should be incorporated gradually into Chile's agricultural sector. This would enable the development of mixed agriculture, incorporating organic, conventional and GM crops. GM crop coexistence with organic and conventional crops posed a challenge that required increased investment and human resources. Chile must establish traceability mechanisms and make case-by-case, science based approval decisions for GM crops.

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4.5
4.5.1

Colombia
Agrochemical market Colombia has a land area of 103.9 million ha, with 42.1 million ha down to permanent pasture (FAOSTAT 2002). Arable land covers 2.3 million ha and permanent crops 1.6 million ha. Major crops by area include green coffee (with a harvested area estimated at 805,000 ha in 2003 FAOSTAT), maize (565,000), paddy rice (498,000 ha), sugar cane (435,000 ha), plantains (380,000 ha), cassava (180,000 ha), potatoes (165,000 ha) and oil palm fruit (153,000 ha). Recently, there has been an increase in the cultivation of industrial crops, such as yucca, palms, cotton and maize. Colombian sales by members of the local agrochemical industry association Cmara de la Industria para la Proteccin de Cultivos (ANDI) fell from $360 million in 1998, to just $248 million in 2003. However, the market rallied in 2003, rising 16.5% to $289 million (see Table 4.10). Sales by ANDI members account for around 80% of the local market.
Table 4.10: Agrochemical sales in Colombia, 1998-2003 ($ million, by product type) 1998 1999 2000 2001 2002 2003 % change 2002-2003 +31.0 + 3.5 +10.5 +38.9 +16.5

Fungicides Herbicides Insecticides Others Total

110 144 88 18 360

115 148 64 24 351

110 119 68 28 325

90 104 73 36 303

87 85 57 18 248

114 88 63 25 289

Source: adapted from ANDI Notes: sales are for members of ANDI

Fungicides are the main product sector, with 39% of value sales in 2003 (see Figure 4.5), up from 35% of sales in 2002. Sales of insecticides were also up sharply, to account for 22% of sales in 2003.
Figure 4.5: Structure of the Colombian market, 2003 (by value)
Others 9%

Herbicides 30%

Fungicides 39%

Insecticides 22%

Source: adapted from ANDI

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It estimated that Colombian agrochemical companies produced pesticides worth $650 million each year, of which $350 million was exported. There have been moves to reduce agrochemical prices. Prior to 2002, 16% VAT was charged on imported raw materials. However, finished products manufactured outside Colombia were not subject to the tax. At the end of 2001, ANDI and the Finance Ministry signed a joint agreement for the lifting of this VAT. Its elimination meant that the cost of finished products accounted for by raw materials fell from 8.25% to 1.75% on average, the ANDI said. In 2004, the Agriculture Ministry and agrochemical industry representatives signed an agreement to stabilise agricultural input prices. The pact included a work plan to improve transparency in pesticide pricing and aims to improve competitiveness in the agricultural sector by allowing farmers greater access to cheaper pesticides. It is also expected to strengthen Colombian negotiations for a free trade agreement with the US. Data protection has proved controversial in Colombia. The country is a member of the Andean Community. In 2000, the government passed Decree 459, which established procedures to approve generic products without any reference to the data exclusivity provisions due to come into force under the Andean Community. In 2001, Resolution 1550 also eased generic approvals by removing the requirement that the generic product had to be equivalent to the original. The Andean Community drew up the Andean Resolution 630 (Technical Manual for the Registration and Control of Chemical Pesticides for Agricultural Use) to harmonise agrochemical registration in Bolivia, Colombia, Ecuador, Peru and Venezuela. It established the harmonised regime laid down in Andean Decision 436 of 1998 and came into force in member countries in June 2002. Both Decree 459 and Resolution 1550 became inapplicable once the Andean regime came into force. The Andean agrochemical rules contain provisions for protecting undisclosed registration data against "unfair commercial use", but do not specify an exact exclusivity period. They stipulate that, "when applicable", companies wishing to register a generic product must submit documents from the original ai manufacturer that authorise its data to be used in support of the generic application. In March 2003, the Colombian g overnment issued Decree 502 and the accompanying Resolution 0770 to implement Andean Resolution 630. Decree 502 gives generic companies greater freedom to use data on registered ais to produce generic products. The government believed that the new Decree would simplify registration procedures and shorten approval times. Under the new rules, the Colombian Agricultural Institute (Instituto Colombiano Agropecuario ICA) handles registration applications and decides how long data will be protected. Different registration procedures and data requirements apply, depending on whether a product contains new ais or ais already registered in the country. The decree provides protection for data on new ais that have yet to be registered or launched in the country, but contains measures to discourage Informa UK Ltd, 2004 126 www.agrowreports.com

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delays between registration and the launch of products. Data protection for products that have not yet been launched will be removed if one year has elapsed since registration, or if it might be necessary to protect the public interest. Data for registered ais that are launched within a year of approval will be protected for three to five years. This means that Colombia has imposed the lowest possible protection period allowed under Andean law. This flexibility arises because member states were unable to agree on the length of exclusivity periods when drawing up the Andean Community Intellectual Property Regime (Andean Decision 486). While Decision 486 stipulates a minimum period of five years, each country was given the freedom to determine how to protect data. The Colombian R&D-based industry wants a period similar to that offered in the US and elsewhere. There, the standard provision is for ten years of exclusivity and 15 years of data compensation running concurrently. It also wants to see a five-year protection period for additional data requested by the authorities. However, despite these concerns, the new law does provide a greater degree of data protection than that available under previous laws. Elsewhere, the decree includes provisions for field-testing agrochemicals, emergency use, and a review of registered products. It stipulates that agrochemical companies must initiate quality control procedures and that high-risk pesticides can only be sold by trained staff. The ICA will have the right to carry out inspections and take product samples, and will be able to seize products that do not meet quality standards. It will also be able to suspend or withdraw approvals for health, environmental and agronomic reasons. As part of further work related to the implementation of the Andean guidelines, the Ministry of Agriculture is bringing in regulations for the registration of manufacturers, formulators, importers, exporters, packaging companies and distributors. Towards the end of 2003, the government passed a Law 822 governing the registration, control and sale of generics. Under the law, the ICA takes responsibility for registering and controlling agrochemicals and co-ordinates registration requests. If pesticides contain previously unregistered ais, it will transfer the requests to the Ministry of Environment for risk assessment. 4.5.2 GM crops The first GM crop that received commercial approval was the blue carnation. In April 2003, the Colombian government approved the commercial planting of Monsantos GM Bollgard cotton. The seed was planted in September 2003 on around 6,500 ha in the Cordova region with a further 1,000 ha to be planted in Aguachica in the northeastern department of Caesar. Trials in Colombia revealed that Bt cotton farmers treated their crop six times less than growers of conventional cotton, which requires around 10-14 applications. The Bt cotton was also better quality because of reduced insect damage. Take-up of the new technology is likely to be hampered by the high initial cost of the licensing fee, the USDA Foreign Agricultural Service (FAS) forecasts. Only a small area of cotton is grown in Colombia.

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4.6

Ecuador
Ecuador has a land area of 27.7 million ha, with 5.1 million ha of permanent pasture (FAOSTAT 2002). Arable land covers 1.6 million ha and permanent crops 1.4 million ha. Major crops by area include maize (with a harvested area estimated at 484,200 ha in 2003 FAOSTAT), cocoa beans (378,500 ha), paddy rice (334,000 ha), green coffee (292,700 ha), oil palm fruit (125,000 ha) and bananas (218,700 ha). Bananas are one of the main agrochemical markets, accounting for a third of agrochemical sales in 2001. The main target is black Sigatoka disease (Mycosphaerella fijiensis var difformis), which may require at least 15 treatments a year. In addition, plantations may receive up to 13 treatments with contact herbicides, two with nematicides and two with insecticides, giving 32 treatments in all. Rice took around 15% of sales. Horticultural crops (mainly flowers) only occupy around 2,500 ha but accounted for 14% of pesticide sales. In 2001, agrochemical sales rose by less than 1% (see Table 4.11), according to figures from the Ecuadorian importers and distributors association, the Gama Group. Some 90% of agrochemical companies in business in Ecuador contribute their individual figures to the Gama Group statistics. Sales were affected by adverse weather, with a prolonged drought in the Ecuadorian Sierra, and multinationals selling their major ais as non-branded products. Crop prices were weak, with rice and potatoes the most severely impacted. Maize and palm prices remained depressed.
Table 4.11: Ecuadorian agrochemical sales, 1994-1995, 1997-98, 20002003, ($ million by product type) 1994 1995 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 na na na na na + 6.0

Fungicides Herbicides Insecticides Nematicides Others Total

33.0 35.0 13.1 11.1 1.1 93.3

33.5 37.8 15.2 15.0 1.4 103.0

44.4 45.6 20.0 8.4 3.9 122.2

48.2 36.8 20.3 6.3 3.3 114.8

na na na na na 123.0

60.0 40.1 22.0 6.1 4.1 132.3

57.0 43.0 23.9 5.2 4.4 133.5

na na na na na 144.3

59.1 44.5 28.0 4.4 17.0 153.0

Source: adapted from AIFA/Ecuaqumica (1994-95) and Agripac/Gama (1997-2003) Notes: sales at distributor level; figures may not add due to rounding; the others category in 2003 includes fertilisers, machinery, seed and disinfectant; sales are for Gama members only, approximately 90% of the market

In 2002, sales rose by 8.1% to $144.3 million, according to Gama, although the market was impacted by adverse weather, low commodity prices, smuggling from Columbia and the generally weak agricultural economy. Gama warned that local industry estimates might be slightly inflated due to companies "padding" their figures. The association estimated the actual market value at around $125 million. In 2003, a general recovery in the Latin American crop protection sector was reflected in agrochemical sales. They reached $153 million, up 6.2% on 2002. Fungicides are the main product group, with 39% of s ales in 2003 (see Figure 4.6). They have overtaken herbicides in importance. Herbicides made up 29% of sales in 2003.

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Figure 4.6: Structure of the Ecuadorian market, 2003 (by value)

Others 9% Acaricides 2% Nematicides 3%

Herbicides 29%

Insecticides 18%

Fungicides 39%

Source: adapted from Gama Group Notes: others includes fertilisers, machinery, seed and disinfectants

Generic pesticides account for some 30% of the Ecuadorian agrochemical market. One market characteristic is the large number of importers and distributors. Agripac is the main one, with sales of $31.6 million in 2003, followed by Ecuaqumica, with sales of $25.7 million. The main distributors in Ecuador, unlike in many other Latin American countries, tend to be independents that represent various multinationals, mostly non-exclusively. Bayer CropScience was the leading multinational, and increased its market share to 10.9%, with sales of over $16 million in 2003. The agrochemical industry association, CropLife Ecuador, formerly the APCSA (Asociacin de la Industria de Proteccin de Cultivos y Salud Animal), is part of CropLife Latin America.

4.7
4.7.1

Mexico
Agrochemical market Mexico has a land area of 190.9 million ha, with permanent pasture covering 80.0 million ha (FAOSTAT 2002). Arable land covers 24.8 million ha and permanent crops 2.5 million ha. Major crops by area include maize (with a harvested area estimated at 7.8 million ha in 2003 FAOSTAT), dry beans and sorghum (both 1.9 million ha). Agrochemicals accounted for sales of $506.7 million in 2001, according to figures from the local agrochemical industry association (Asociacin Mexicana de la Industria Fitosanitaria AMIFAC) and quoted by Goulston (see Table 4.12).

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Table 4.12: Mexican agrochemical sales, 1994-2001, ($ million by product type) 1997 1998 1999 2000 2001 % change

Insect icides Herbicides Fungicides Others Total

113.3 169.9 174.4 26.7 484.6

189.3 160.4 107.0 30.4 487.1

170.2 150.6 107.1 36.1 464.0

166.3 163.1 117.3 30.8 477.5

191.4 165.3 117.9 32.0 506.7

+15.1 + 1.3 + 0.5 + 3.9 + 6.1

Source: adapted from AMIFAC/Goulston Notes: sales are for members of AMIFAC at distributor level

Insecticides are the most important product sector, with 38% of sales in 2001 (see Figure 4.7).
Figure 4.7: Structure of the Mexican market, 2001 (by value)

Others 6%

Herbicides 33%

Insecticides 38%

Fungicides 23%

Source: adapted from AMIFAC/Goulston Notes: sales are for members of AMIFAC at distributor level

Vegetables, including potatoes, accounted for around 38% of agrochemical sales in 2001 (Goulston). Maize accounted for a further 20%. The maize agrochemical market is dominated by herbicides, especially in the high-input sector of the industry. Vegetables are, by far, the most important crop for agrochemicals, accounting for nearly 40% of input and for nearly threequarters of the fungicides sold. Bananas account for 80% of fungicides in the country.

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Table 4.13: Mexico: agrochemical sales by crop and product sector, 2001 ($ million ex-distributor) Insecticides Vegetables (incl potato) Maize Wheat Cotton Banana Dry beans Coffee Rice Sugarcane Pasture Citrus Other fruit Others Total 83.7 30.8 1.4 19.6 0.8 1.8 0.3 0.2 4.3 0.3 3.1 10.0 35.1 191.4 Herbicides 12.3 63.0 12.6 1.8 1.9 3.0 2.6 2.0 17.1 8.3 6.9 2.5 31.4 165.3 Fungicides 85.0 3.7 0.6 10.5 0.2 0.0 2.4 8.8 6.6 117.9 Others 10.4 3.7 0.2 1.8 0.9 0.1 0.0 0.1 1.2 0.0 6.9 6.8 32.0 Total 191.3 101.2 14.8 23.2 14.1 5.0 3.0 2.3 22.6 8.5 12.5 28.2 80.0 506.7

Source: adapted from AMIFAC/Goulston Notes: sales are for members of AMIFAC at distributor level

4.7.2

GM crops Field trials have been carried out in Mexico for nearly 15 years on a series of GM crops, including maize, soybeans, cotton, potatoes, tobacco, tomatoes, pineapples, papayas and squash. However, the Congress has failed to pass any of the successive legislative bills that it has considered in the last few years. While local researchers are encouraging the introduction of GM crops and providing assurances on their health and environmental safety, farmer and environmentalist groups are strongly opposed to their commercial approval. Planting transgenic seed creates dependence on the multinationals that produce them, as the seed is meant to be used with specific pesticides from the same firms. This would undermine local agriculture, they argue.

4.8

Paraguay
Paraguay has a land area of 39.7 million ha, with permanent pasture covering 21.7 million ha (FAOSTAT 2002). Arable land covers only 3.0 million ha and permanent crops 95,000 ha. The main arable crop is soybeans, with 1.6 million ha harvested in 2003 (FAOSTAT estimates). Soybean herbicides dominate the local agrochemical market and pesticide use has risen in recent years due to the expansion of the soybean crop. Since the 1990s, the main soybean herbicides have been the imidazolinones of Cyanamid, now owned by BASF. Nearly all the fungicides, apart from Thiram seed dressing, are used in wheat.

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Table 4.14: Paraguay agrochemical sales, 1994-2000, by product type) 1997 1998 1999 2000 % change 1999-2000 + 2.3 + 4.8 +31.1 +66.7 + 7.1

Herbicides Insecticides Fungicides Others Total

43.2 12.3 6.5 1.0 63.0

43.0 10.0 6.8 1.2 61.0

44.0 10.5 6.1 1.5 62.1

45.0 11.0 8.0 2.5 66.5

Source: Agrow Reports.

Main suppliers of pesticides in Paraguay include MAI, Monsanto and BASF. In 2004, Monsanto applied for approval for the commercial cultivation of four varieties of glyphosate-tolerant Roundup Ready soybeans. These would be the first approvals for the commercialisation of a GM crop in Paraguay. If they are officially approved, the selective herbicide market will contract markedly. The authorities have expressed their commitment to approve these lines once all the legal steps are appropriately accomplished, according to Monsanto. This is likely to include a two-year trial. Once approved, Monsanto will probably implement a commercialisation plan similar to the one it operates in Argentina.

4.9

Venezuela
Venezuela has a land area of 88.2 million ha, with 18.2 million ha down to permanent pasture (FAOSTAT 2002). Arable land is 2.4 million ha and permanent crops 810,000 ha. The main arable crops are m aize (with an estimated 449,000 ha harvested in 2003 FAOSTAT), sorghum (272,000 ha), green coffee (235,000 ha), paddy rice (134,700 ha) and sugar cane (133,900 ha). The major sectors for agrochemical usage are maize and rice herbicides, maize insecticides, banana fungicides and banana and pasture herbicides. Cotton has virtually disappeared and the use of herbicides in pasture has fallen. Over the past 15 years, the sector has suffered from a lack of technological advances, leading to high operational costs and, with the exception of rice, little improvement in yields. High inflation and interest rates have exacerbated farmers' problems. The agrochemical market was worth $82 million at distributor level in 2001, according to figures from the local crop protection association, Asociacin de Fabricantes de Productos Qumicos Agropecuarios (AFAQUIMA see Table 4.15). Preliminary figures suggest this rose to $100 million in 2003. Foreign exchange controls applied by the Venezuelan government in January 2003 have made it "difficult if not impossible" to import pesticides, according to the USDA Foreign Agriculture Service.

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Table 4.15: Venezuelan agrochemical sales, 1997, 2001, 2003 ($ million by product type) 1997 Herbicides Insecticides Fungicides Others Total 35.4 23.9 13.9 3.8 77.0 2001 39.4 25.4 15.6 1.6 82.0 20031 48 40 10 2 100

Source: adapted from AFAQUIMA Notes: 12003 figures are preliminary figures, and the categories are derived from percentages.

The agrochemical market structure has been fairly static in recent years, while the number of players has fallen due to mergers and acquisitions. Most international companies are run from Andean sub-region offices in Colombia as a result of cost cutting. The over-valuation of the Bolivar had converted Venezuela into a high-cost country with a relatively small market. In April 2004, Venezuelan President Hugo Chavez Frias decided to ban the cultivation of GM crops, as they were contrary to the interests and needs of the nation's farmers and farm workers, he reportedly said at a meeting of the international peasant's organisation, Via Campesina.

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CHAPTER 5: AUSTRALASIA
5.1
5.1.1

Introduction
Agrochemical market The countries of the Asia-Pacific region are politically, economically and agriculturally extremely diverse. The mature markets of Japan and Australia have powerful economies and they employ intensive farming practices. By contrast, the markets of Pakistan, China and India are developing, and here food security remains the primary aim of agriculture. Many of the regions countries are highly populated, and limited land availability means intensification of production is essential to increase food production. This suggests future growth in agrochemical markets, and many multinationals entered the market anticipating this. The market was knocked back by the economic crisis that hit the region in the late 1990s. However, many economies have since recovered. The largest market in the region is Japan (see Table 5.1), also the worlds third-largest agrochemical market. Japanese agriculture is highly intensive and crop yields are among the highest in the world. It is dominated by rice, with an estimated 1.7 million ha harvested in 2003. The government has an ongoing programme to restrict rice production. Some 1.1 million ha has been taken out of production since the mid-1990s. Rice accounted for some 37% of agrochemical sales by value in 2003, so this has had a major effect on the market, which has been in decline for a number of years.
Table 5.1: Australasian agrochemical sales by product type, 2003 ($ million) Country Herbicide Fungicide Insecticide Others Total % change on 20021 - 3.5 + 3.2 na - 0.3 +25.9 + 1.4 + 1.6

Japan China Australia2 South Korea Pakistan New Zealand Malaysia Total

876 480 694 196 28 61 56 2,391

700 348 101 277 5 26 6 1,463

843 578 209 272 163 21 16 2,102

370 29 350 29 5 8 4 795

2,789 1,436 1,354 774 201 116 82 6,752

Source: see individual profiles for details Notes: 1in local currency, except for China and South Korea, which are in $; 2sales are for 2002; includes fungicides/insecticide combinations; sales converted from national currencies, where appropriate, using the following exchange rates US$1 = Yen 115.97995; RM 3.80117; NZ$ 1.72294; RS 59.89482. Figures for India and Thailand are not available.

China and Australia are also significant markets. Estimates vary on the size of the Chinese market. It is characterised by the dominance of small and medium-sized local manufacturers with outdated formulation technology and a lack of funds to develop new products. Excess capacity has kept prices down and meant that there is insufficient money for investment. There is also a problem with counterfeiting. However, many multinationals

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have entered the market in recent years, as the m arket is expected to expand considerably. The South Korean market was badly hit by the economic crisis in 1997, but has since recovered to $774 milli0n in 2003. This is only 4.5% higher than 1995 levels, however. The market is expected to stabilise at around $680 million in the long term CropLife Asia, formerly the Asia Pacific Crop Protection Association, represents the regions crop protection industry at the global level as one of the six regional nodes of CropLife International. It comprises 14 national crop protection association members and six leading R&D-based multinationals. 5.1.1 GM crops The anti-GM feeling seen throughout Europe and starting to appear in the US has continued into Asia-Pacific, with many countries imposing strict regulations on l belling and commercialisation. However, GM crops have a been commercially introduced, notably in China, and also in Australia and India. The Chinese government is a keen supporter of biotechnology, with many varieties having been developed by publicly funded institutes. The country began developing GM rice and cotton in 1990, and by 2003, some 130 GM crop lines were in R&D. Key areas of research include insect-resistant cotton and GM rice. GM insect-resistant Bt cotton has been particularly successful, accounting for 95% of the GM crop area in 2001. The area grown increased from just 2,000 ha in 1997, to 1.3 million ha in 2001, 2.1 million ha in 2002 and 2.8 million ha in 2003, representing 58% of the total cotton area. In India, the government is keen to promote GM technology in agriculture, despite opposition. By February 2004, some 60 GM crop lines were undergoing field trials, led by rice, tomatoes, mustard/oilseed rape, cotton and tobacco. Monsanto's Bollgard insect-resistant Bt cotton was launched in 2002. By August 2004, four GM cotton lines had been approved for commercial planting, all of which carried the Bollgard trait. In Australia, Ingard GM cotton was launched in 1996. Applications of insecticides where the crop was grown fell by about 50%. Bollgard II was introduced in Australia in 2003 and is to replace the Ingard cotton during 2005. While pest-resistant GM cotton is widely grown in Australia, there has been opposition to the commercialisation of GM crops, particularly those for food. By August 2004, six states and territories had placed moratoria on commercialisation. No GM crops are yet approved for commercial planting in Japan. However, a wide range of insect-resistant and herbicide-tolerant crops is undergoing field trials. Some local authorities have also drawn up restrictions on the cultivation of GM crops. However, it seems that in the longer term, GM crops will be introduced.

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5.2
5.2.1

Australia
Agrochemical market Australia has a land area of 768.2 million ha, of which 447.0 million ha is used for agriculture (FAOSTAT 2002). However, only 48.3 million ha is arable crops, and 300,000 ha permanent crops. Cereals are particularly important. Some 12.5 million ha of wheat and 3.8 million ha of barley were harvested in 2003 (FAOSTAT). Other crops included lupins (1.2 million ha) and rapeseed (1.0 million ha). Some 24.0 million ha of mixed grasses and legumes were also harvested. Agrochemical sales grew to 2000, but have since fallen back (see Table 5.2). In 2002, sales fell by 18.5% to Aus$1,354.3 million, according to figures from the Australian Pesticides and Veterinary Medicines Authority (APVMA). The APVMA was formerly the National Registration Authority (NRA). It was renamed in 2003 to more clearly identify its role and area of focus. Sales of herbicides fell by 14.6% to Aus$694.2 million, accounting for 52% of the total (see Figure 5.1).
Figure 5.1: Structure of the Australian market, 2002 (by sales)

Others 23%

Seed Treatments 3% Fungicides 7% Insecticides/ acaricides 23% Herbicides 52%

Source: adapted from NRA

Some 4,831 registered pesticide products were on the market in 2002 compared with 4,626 in 2001 and 3,906 in 1999. These included 1,251 herbicides (1,189 in 2001), 959 insecticides (938), 442 fungicides (420) and 63 acaricides (64). The Agricultural and Veterinary Chemicals Legislation Amendment Act, passed in March 2003, aimed to facilitate the registration of low-risk products. In 2003, the APVMA proposed a revised registration fee and levy system with a view to raising Aus$23.3 million compared with Aus$19.5 million in 2002/03. The proposals were based on a cost recovery level of 40% for registration applications combined with a sales levy covering 60% of assessment costs. However, following consultation, the government decided it needed more time to analyse the views of stakeholders, so delayed its introduction until 2005/06. Informa UK Ltd, 2004 137 www.agrowreports.com

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Meanwhile, the government proposed raising pesticide registration renewal fees by 25% for 2004/05 as an interim measure to prevent a funding shortfall at the APVMA. The APVMA needed additional funds to meet higher insurance premiums and to carry out extra functions. However, its income from the sales levy on agvet chemicals fell from Aus$10.7 million in 2002/03 to Aus$9.7 million in 2003/04. This was because in 2000 it was decided to lower the levy rate from 0.75% to 0.65%, and agrochemical sales fell due to the 2002 drought. A 12% rise in sales in 2003 due to improved weather conditions was expected to boost levy revenue to Aus$10.4 million in 2004/05. Temporary funding arrangements have been introduced. A total of 8 companies renewed registrations for 7,629 agvet chemicals 01 for 2003/04. Of these, 748 had annual sales of less than Aus$5 million. Around 50% of the registration renewal fee increase will be borne by small companies, with 30% from large companies and 20% from medium-sized firms. Some 74% of the projected fee increase will come from products with the highest sales. 5.2.2 GM crops GM crops are grown commercially in Australia. Ingard GM cotton was launched there in 1996. Applications of insecticides where the crop was grown fell by about 50%. Bollgard II was introduced in Australia in 2003 and is to replace the Ingard cotton during 2005. The average application rate of insecticides on cotton has fallen from 4.5 kg/ha on conventional varieties to 0.5 kg/ha on Bollgard II cotton. In July 2004, estimates suggested that plantings of GM pest-resistant and herbicide-tolerant cotton could account for around 80% of the 300,000 ha crop in the 2004/05 season. Monsanto's twin-trait Roundup Ready/Bollgard II cotton would account for 40% of the total crop area, with Bollgard II and Roundup Ready cotton each taking up a further 20% of the area, according to the CSIRO. While pest-resistant GM cotton is widely grown in Australia, there has been opposition to the commercialisation of GM crops, particularly those for food. By August 2004, six states and territories had placed moratoria on commercialisation (see Table 5.3). While the states are bound by regulatory decisions on GM crops by the federal Office of the Gene Technology Regulator (OGTR), they can impose additional restrictions for marketing purposes only.
Table 5.2: Australian states imposing a moratorium on certain GM plants State New South Wales Australian Capital Territory South Australia Victoria Tasmania Western Australia Crop GM food crops GM food crops GM food crops Specific order preventing GM canola cultivation GM crops GM crops Expiry date 2006 2006 2007 2008 2008 2008

Source: Agrow World Crop Protection News

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commercialisation of GM crops. It said that state moratoria on commercial planting had created a fragmented and inconsistent two-tiered regulatory system that threatened to damage Australian agriculture. This inconsistency acts as a disincentive for further investment in R&D and could put Australia at a competitive disadvantage to other countries where GM crops are widely grown.

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Table 5.3: Australian agrochemical sales, 1996-2002 (Aus$ million, by product type) 1996 1997 1998 1999 2000 2001 2002 % change 2002-2003 -14.6 -44.6 -12.0 - 0.8 - 2.3 -18.5

Herbicides Insecticides/acaricides Fungicides Seed treatments Others Total

626.6 280.0 87.8 238.5 1,233.0

713.6 291.3 96.7 254.0 1,355.7

834.0 366.2 87.7 21.8 273.9 1,583.6

895.9 409.9 108.5 33.5 293.3 1,740.9

883.7 370.6 120.7 38.2 294.6 1,707.8

812.5 377.5 114.2 37.6 320.4 1,662.2

694.2 209.2 100.5 37.3 313.1 1,354.3

Source: adapted from NRA/APVMA Notes: figures may not add due to rounding; others category includes PGRs, molluscicides, nematicides, wood preservatives, household pesticides, biocides, adjuvants and others household insecticides had sales of Aus$ 81.7 million in 2002

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5.3
5.3.1

China
Agrochemical market China has a land area of 932.7 million ha (FAOSTAT 2002). Agricultural land accounted for some 554.0 million ha in 2002, including 142.6 million ha of arable land, and 11.3 million ha of permanent crops. Permanent pasture accounted for a further 400.0 million ha. Main crops include paddy rice (with an estimated 27.4 million ha harvested in 2003 FAOSTAT), maize (23.5 million ha), wheat (22.0 million ha), soybeans (9.5 million ha), vegetables (7.9 million ha), rapeseed (7.2 million ha), sweet potatoes (5.3 million ha), groundnuts (5.1 million ha), potatoes and cotton (both 4.5 million ha) and apples (2.1 million ha). Vegetables are a particularly important market for agrochemicals, with an estimated 25% of pesticide sales in 2003, according to the marketing and consulting company, ARN (www.agrosquare.com/arn). Rice took some 19% of sales, orchards 15%, cereals 14% and cotton just 7%. Soybeans and oilseeds took 5% each. The area of cash crops is forecast to rise, while Chinese cereal production is expected to decline due to increasing competition in the international cereal market. Estimates vary on the size of the agrochemical market. ARN estimated that sales fell by 4.1% in 2002 to $1,386 million at provincial distributor level. Sales recovered in 2003, up 3.2% to $1,436 million (see Table 5.4), helped by greater use of higher priced, foreign branded products, the replacement of older insecticides, and more treatments on cash crops and cereals. ARN believes this trend will continue, supported by the rise in domestic prices and further expansion in foreign brands. The company compiled trade data from 460 pesticides distributed in 28 provinces and used on 35 crops.
Table 5.4: Chinese agrochemical sales, 2001-2003 ($ million, by product type) 2001 2002 2003 % change 2002-2003 + 2.6 + 3.1 + 3.9 + 9.8 + 3.2

Insecticides Herbicides Fungicides Others Total

634 463 344 na 1,441

564 462 336 25 1,386

578 480 348 29 1,436

Source: adapted from ARN Notes: f igures may not add due to rounding; at provincial distributor level; na = not available

Insecticides took 41% of sales in 2003 (see Figure 5.2). They are used mainly on vegetables (against common cabbage moths, diamondback moths and aphids), rice (stem borers, brown plant hoppers and leaf rollers), cotton (bollworms and aphids), wheat (aphids and armyworms) and fruit trees (leaf miners, scale insects, borers and aphids).

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Figure 5.2: Structure of the Chinese market, 2003 (by value)

Others 2%

Herbicides 33%

Insecticides 41%

Fungicides 24%

Source: adapted from ARN

Sales of vegetable insecticides rose by 5-6% in 2003, while rice insecticides also rose, reflecting high infestations of leaf folders. Orchard insecticide sales were stable, while cereal insecticide sales fell by 9%, reflecting the fall in spring wheat plantings in northern China. The introduction of GM Bt cotton in the northern cotton belt reduced insecticide use by 5.2%. However, in the northeast province of Xingjiang where non-Bt cotton is cultivated, insecticide/acaricide use rose by 31% to control aphids and mites. Herbicides are the fastest growing segment in China, and are mainly used in rice, in orchards for non-selective application, in upland crops for broadleaf and grass weed control, and in wheat, soybeans and oilseed rape. Rice herbicide sales fell by 2.4%, while sales of cereal and cotton herbicides both rose by 5%. Price competition resulted in a 3.9% fall in the use of foreign herbicide brands, while cheaper, domestically produced generics increased by 7.7%. Fungicides are used mostly on vegetables for mildew and grey mould control, on rice to control blast, sheath blight and Bakanae disease, on orchards against Gloeosporium rot, powdery mildew, perennial canker, leaf spot and blue mould, and on wheat against loose smut, head blight, mildew and stem rust. In 2003, sales rose by 3.9%. Sales of foreign branded fungicides posted record growth of 10.2%, ARN reported. Vegetable fungicides rose by 5 -6%, with foreign branded products up by 12.1%. Cotton fungicide sales rose by 11% Sales of foreign pesticide brands were worth $382 million at the distributor level in 2003, equivalent to $326 million at the ex-manufacturer level. The top ten overseas manufacturers accounted for 86.9% of the total sales for foreign brands. Syngenta was the leading supplier with a 23.4% share. Overseas companies account for 26.6% of the market value, but only 9.6% of the treated area. Overseas manufacturers have targeted the lucrative cash crop markets. These companies have also recently introduced products in the cereal sector and entered the seed treatment market for wheat, cotton and maize. Their image of high quality and the strength and efficiency of their sales and Informa UK Ltd, 2004 142 www.agrowreports.com

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marketing networks gives them a key competitive advantage over domestic producers, ARN says. Only a small number of domestic pesticide companies are changing their business model from a product focus to a market focus, it adds. 5.3.2 Pesticide trade Total pesticide exports from China reached 274,000 tonnes in 2003 (see Table 5.5). The value of these exports rose by 23.2% to $730 million. Herbicides have replaced insecticides as the leading export category. Herbicide exports rose by 39.7% to 124,900 tonnes in 2003, overtaking insecticide exports of 97,000 tonnes. The increase reflects the efforts by Chinese companies to improve production processes and to bring product quality in line with that of overseas manufacturers, according to China Chemical Reporter.
Table 5.5: Chinese pesticide exports, 2003 (by product type) Tonnes % change vs 2002 +39.7 + 7.6 +24.3 +23.1 $ 000 % change vs 2002 +42.5 +11.2 +19.5 +23.2

Herbicides Insecticides Fungicides Total

124,900 97,000 41,000 274,000

302,732 263,534 134,902 729,666

Source: Chinese customs general administration/China Chemical Reporter Notes: total includes other pesticides

China imported just 28,000 tonnes of pesticides in 2003, worth $134 million (see Table 5.6).
Table 5.6: Chinese pesticide imports, 2003 (by product type) Tonnes % change vs 2002 -18.5 +30.2 + 1.0 + 4.0 $ 000 % change vs 2002 -18.6 +17.3 - 8.0 - 1.6

Herbicides Fungicides Insecticides Total

12,000 9,000 6,000 28,000

49,192 48,735 29,244 133,982

Source: Chinese customs general administration/China Chemical Reporter Notes: total includes other pesticides

5.3.3

Pesticide production The Chinese agrochemical market is characterised by the dominance of small and medium-sized local manufacturers with outdated formulation technology and a lack of funds to develop new products. Excess capacity has kept prices down and meant that there is insufficient money for investment. The government set an output target of 450,000 to 500,000 tonnes of pesticides for 2005 in its tenth five-year plan, which runs from 2001 to 2005. However, production leapt by 18.3% to 853,000 tonnes in 2002, followed by a smaller increase of 1.2% to 863,000 tonnes in 2003 (see

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Table 5.7). High levels of production are helping to keep down the value of the agrochemical market. The plan also set a target of raising the herbicide share from 20% to 25% by 2005, to reduce the dominance of insecticides in Chinese pesticide production. Herbicides now account for 24.4% of total pesticide production, which is close to the government's target.
Table 5.7: Chinese agrochemical production, 1999-2003 (000 tonnes, by product type) 1999 2000 2001 2002 2003 % change 2002-2003 - 1.2 + 6.5 + 3.9 - 0.1 +1.2

Insecticides Herbicides Fungicides Others Total

412.1 109.2 74.2 71.5 667.0

392.9 109.4 66.3 70.1 638.7

430.1 151.9 69.0 69.8 720.8

483.5 197.8 76.5 95.2 853.0

477.7 210.7 79.5 95.1 863.0

Source: National Bureau of Statistics/China Chemical Reporter Notes: figures may not add due to rounding

The total output from the Chinese pesticide sector was worth Yuan 34,698 million in 2003, up by 16.4% on 2002, according to the Statistics Bureau of China. Of this, bulk pesticides were worth Yuan 32,377 million, up 16.2%, while formulated products were Yuan 2,321 million, up 19.4%. The sector's pre-tax profit rose by 22.5% to Yuan 2,070 million. 5.3.4 Ai review China relies on old ais and formulations, particularly emulsifiable concentrates and wettable powders. Some 35% of the pesticide volume produced there comprises older, more hazardous ais, and the government aims to reduce this to 20% in 2007. The Ministry of Agriculture began a programme to reduce the use of these pesticides in 1997, with five organophosphate insecticides. In 2002, the Ministry announced plans to stop accepting registration applications for a further 11 pesticides, including phorate and omethoate. For the organophosphates, methamidophos, monocrotophos, parathionethyl, parathion-methyl and phosphamidon, the sale or use of combination products containing one or more of these ais was prohibited with effect from 30 June 2004. On 1 January 2005, product registrations held by companies that are not manufacturers of these ais will be withdrawn. With effect from 1 January 2005, use of these ais will be restricted to just four crops: cotton, rice, maize and wheat. By 1 January 2007, all these remaining product registrations will be withdrawn and all domestic agricultural use of these five ais will be banned. However, some production capacity will be retained for export purposes. The Ministry of Agriculture is also reviewing all products containing ais that received a provisional registration before 23 July 1999. The Ministry's Institute for the Control of Agrochemicals (ICAMA) is to work with manufacturers to generate the required registration data. The aim is to improve the range of pesticides available and to satisfy the needs of agriculture and sustainable development. Informa UK Ltd, 2004 144 www.agrowreports.com

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The authorities intend to enforce the requirement that no provisional registration will last longer than four years. However, existing provisional registrations will be extended while the ais are going through the review process. Depending on the outcome of the review, provisional approvals will be converted into formal registrations or withdrawn. The ICAMA will organise the field trials and other studies carried out by manufacturers to satisfy the data requirements of the State Pesticide Registration Review Committee. The ICAMA is encouraging manufacturers to participate in these registration trials on a voluntary basis and to share the trial costs among themselves. The 379 ais under review have been divided into four groups. Registration trials and review work are under way for the first group, which comprises nine ais: the insecticides, cypermethrin, imidacloprid, monosultap, phorate, pyridaben and triazophos; the fungicides, carbendazim and triadimefon; and the herbicide, isoproturon. The review of these ais should be completed by the end of 2004. A total of 95 ais are in the second group. Applications from participating companies have already been submitted for these products. Registration trials and review assessments are due to be completed by the end of 2006. Applications for the 210 ais in the third group must be submitted by 31 August 2004 and their review is due to be completed by the end of 2007. The deadline for applications for the four th group of 65 ais is 31 March 2005 and their review is to be completed by the end of 2008. China has a strong programme to promote IPM. The country's commitment to IPM was first mentioned in the Sixth Five-Year Plan 20 years ago. The national IPM programmes are organised by the National Agro-technical Extension and Service Centre under the Ministry of Agriculture. However, educating farmers is a large task in such a vast country. 5.3.5 Counterfeiting Cheaper, counterfeit products flourish in China, with some estimates suggesting that 30% or more of pesticide products on the market are fake. They often carry the same labels but contain lower ai concentrations or substandard ingredients. The Crop Protection Association of China (CPAC) has been collaborating with the government to combat counterfeits. It has run training programmes on identifying fake pesticides to encourage government officials to start contacting CPAC member companies for confirmation of counterfeit products. In 2000, raids carried out by CPAC and government officials on 27 counterfeiting sites and 145 dealers or warehouses led to the seizure of fake products with a market value of around $1.3 million. Of the 145 dealers/warehouses, 67 were found to be selling counterfeit products alongside genuine pesticides. Products from 14 CPAC members had been copied. In 2001 and 2002, the CPAC's intellectual property rights (IPR) team conducted training sessions for 913 enforcement officials from 548 counties or cities in eight provinces. Over 3,000 copies of the CPAC's Main Product Manual were distributed to help officials identify fake products. In 2004, the Chinese General Administration of Quality Supervision, Inspection and Informa UK Ltd, 2004 145 www.agrowreports.com

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Quarantine stepped up its campaign against counterfeit, sub-standard and banned pesticides. The agency is working with local governments to strictly enforce agrochemical regulations, particularly in view of the government's ongoing programme to phase out older, more toxic organophosphate insecticides. Multinationals have been increasing their presence, despite these problems. They often find it hard to compete on price, and instead compete on quality. Bayer CropScience, Dow AgroSciences, DuPont, FMC and Syngenta all have local production facilities to synthesise, formulate or repack pesticides. Overseas companies rely on a strong local sales and marketing network to assist their agents in product promotion campaigns. These are mainly conducted by country-level dealers, which are the key decisionmakers for ordering products. In 2002, some of the leading suppliers started to promote their products at the retailer and farmer level. With the support of local retailers, they organised meetings with large-scale farmers in the southern coastal provinces and the northern soybean growing areas. The aim is to be more competitive with Chinese suppliers. Around 2,000 county-level dealers supply pesticides to over 150,000 retail shops. The distribution system has developed through the gradual privatisation of the government's co-operative system, the Agricultural Means of Production Company in China (AMPC). Now, up to 80% of the county-level ex-AMPC co-operatives are private dealers concentrating mainly on pesticides. Foreign suppliers have to rely on a strong network of agents to build healthy business relations. However, while Chinese agents are strong on logistics and financial issues, they do not participate in any promotional campaigns, according to ARN. Future growth opportunities for multinationals are expected following China's entry into the WTO in 2001. Before entry, pesticide imports were controlled by quotas imposed by the Chinese foreign central economical committee. Distributors, traders and formulators for pesticides and raw materials received annual import quotas averaging $220-250 million, and the added value from production and formulation processes boosted the value of these products by around $100 million. Under the terms of entry, China is phasing out its import quota system. This is likely to cause a surge in pesticide imports, according to ARN. In 2004, the Chinese State Development and Reform Commission confirmed that the period of administrative protection awarded to agrochemicals cannot be extended beyond the current period of 7.5 years. The Commission's clarification followed some controversy over whether the protection period could be extended. Administrative protection prevents other companies from producing or selling products without the permission of patent holders. Any individuals or companies in countries that have bilateral agreements with China must continue to follow China's 1993 regulations on administrative protection, says the ICAMA. 5.3.6 GM crops The Chinese government is a keen supporter of biotechnology, and consumers show little concern over GM crops and food. As a result, China is a major grower of GM crops. The country began developing GM rice and Informa UK Ltd, 2004 146 www.agrowreports.com

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cotton in 1990, and by 2003, some 130 GM crop lines were in R&D in China, according to the Agriculture Ministry. Key areas of research include insectresistant cotton and GM rice. An insect-resistant Bt rice is being developed by Chinese researchers, but has yet to receive approval for commercial planting, the USDA's Foreign Agricultural Service says. GM crops have been commercially grown in China since 1997, when the Ministry of Agriculture approved the first lines of transgenic cotton, tobacco, peppers, tomatoes and petunias. In 1999, it had 750,000 acres of GM crops. GM insect-resistant Bt cotton has been particularly successful, accounting for 95% of the GM crop area in 2001. The area grown increased from just 2,000 ha in 1997, to 1.3 million ha in 2001, 2.1 million ha in 2002 and 2.8 million ha in 2003, representing 58% of the total cotton area. Many of the varieties have been developed by Chinas publicly funded institutes. Counterfeit seed is considered to represent the largest threat to biotechnology companies in China. Monsanto delayed the introduction of its glyphosate-tolerant Roundup Ready soybeans due to concerns over intellectual property rights.

5.4
5.4.1

India
Agrochemical market India has a land area of some 297.3 million ha, with 181.2 million ha down to agriculture in 2002 (FAOSTAT). Arable land accounted for some 161.7 million ha, and permanent crops 8.4 million ha, making India one of the major growers of arable crops. Permanent pasture took up only 11.1 million ha. Main crops include paddy rice (with an estimated 44.0 million ha harvested in 2003 FAOSTAT), wheat (24.9 million ha), millet (12.0 million ha), sorghum (9.9 million ha), dry beans (9.0 million ha), cotton (8.4 million ha), groundnuts (8.0 million ha), maize (7.0 million ha) and soybeans (6.5 million ha). The bulk of India's pesticide and fertiliser usage is on cotton. About 50% of the crop is grown from hybrid varieties, compared with only 2% in 1975. Yields at 333 kg lint/ha are only 50% of those achieved in Pakistan. Half of the pesticides used in India are applied in the states of Punjab, Haryana and Andhra Pradesh. Agrochemical sales fell in 2001 and 2002, as farmers were hit by poor monsoon conditions. The market stabilised in 2003, with value sales up by 5-6%. However, the rise was solely due to inflation, and there was no growth in real terms. Volume growth has been limited due to the replacement of old products with newer, low-rate formulations. The government is promoting IPM. Its adoption is considered to have contributed to a 28% decline in annual agrochemical use from 65,462 tonnes in 1994/95 to 47,020 tonnes in 2001/02. A training programme for farmers and agricultural extension officers is under way, covering IPM methods and safe use of pesticides in cotton.

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The government is also promoting biopesticides. Guidelines for their registration have been simplified and grants are available to help state governments establish laboratories to develop and produce them. Their use has grown from 219 tonnes in 1994/95 to 902 tonnes in 2001/02. However, they still represent a small proportion of the market. Some 14 biopesticides were registered in India in 2003, and 409 biocontrol laboratories or production units. Counterfeit pesticides are still a problem in India. The Pesticide Association of India (PAI) estimated that counterfeit pesticides accounted for 10-15% of the market in 2003, with sales of around Rs 3,500-5,000 million ($70-100 million), and growing at 20-25% a year. The government has stepped up inspections to improve product quality. The pesticide industry was tarnished by a maximum residue limit (MRL) scandal in 2003. The Centre for Science and Environment (CSE) claimed that soft drinks contained excessive levels of pesticide residues. A Parliamentary Committee was set up to investigate this and to propose criteria for setting safety standards for beverages. In 2004, the committee urged the government to strengthen its monitoring systems for pesticide residues and to speed up its programme to establish MRLs for all registered ais. Before the residue controversy, MRLs had not been set for many registered ais and were not required for new pesticide approvals. As a result of the CSE report, the government decided to review MRLs for existing products and introduce the requirement for MRLs to be set before new pesticides can be registered. By January 2004, MRLs had been fixed for only 71 of the 181 registered ais. Residue limits had been finalised for around 50 ais and data for a further 24 had been submitted to the Ministry of Health. Some 27 ais do not require an MRL. No data were available for the remaining eight pesticides. Data protection is a controversial issue. India has until 2005 to introduce product patents under its implementation of the WTO trade-related aspects of intellectual property rights (TRIPs) requirements. The TRIPs agreement calls for the protection of registration data against "unfair commercial use", but does not stipulate a length for this protection period. Indications are that some government departments are considering introducing a data exclusivity period. The R&D-based multinational want a five- to ten-year period of data protection, which would bring the country in line with many others. This would run from the date of the first Indian approval of an ai and would prevent other companies from accessing the registration data. Such a system would help the first registrant to recover the cost of data generation. Data requirements are much less onerous for generic product approvals in India, and the R&D-based industry has long argued for more stringent data requirements for generic registrations. The generics industry argues that the introduction of product patents will provide enough protection. An additional data exclusivity period would amount to an extended patent and would go beyond the requirements of TRIPs.

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The Pesticide Manufacturers and Formulators Association of India (PMFAI) believes that extended protection periods will result in higher pesticide prices. This will have a significant impact on farmers as agrochemicals represent the major input cost for most crops in India. The generic industry would not have the resources to cope with higher costs, either due to increased data requirements or the introduction of data compensation schemes. A weakened generic sector would result in less competition and would reduce the incentive for companies to develop new products. The flood of pesticides due to come off patent in the next few years is expected to boost opportunities for generic manufacturers in India. Around 15 popular pesticides will come off patent by 2005. Looking further ahead, patent expiries include nitenpyram in 2005, imidacloprid in 2006, acetamiprid in 2008 and thiamethoxam in 2011. India is a major producer of pesticides. However, competition is intense. Improvements in production technology and capacity in recent years means that all companies can produce a wide range of products. For exa mple, six to seven companies produce imidacloprid, local company Rallis has estimated, and prices crashed in 2003 as a result. The fall in overall pesticide demand and prices means that no company is working at more than 60% of production capacity. Local agrochemical production fell by 1.5% in 2000/01 and 13% in 2001/02, reflecting adverse weather, falling demand and intense competition. Production fell by 16.1% to 67,400 tonnes in the year ended 31 March 2003, according to the PMFAI. Insecticides accounte d for 73.4% of total production in 2002/03, with output down 14.1% to 49,893 tonnes (see Table 5.8). Fungicides fell by 9.4% to 12,266 tonnes, though this still used 87.1% of capacity. Herbicide production slumped by 43% to 3,441 tonnes, just 20.7% of capacity. Overall, just under half of the country's production capacity was utilised.
Table 5.8: Indian agrochemical output, 2000/01-2002/03 (tonnes ai) Capacity at March 2002 Insecticides Fungicides Herbicides Rodenticides Fumigants Total 103,354 14,085 16,590 3,160 450 137,639 2000/01 2001/02 2002/03 % change 2001/02-2002/03 -14.1 - 9.4 -43.0 -11.7 - 2.7 -16.1

69,703 12,058 7,353 3,053 169 92,336

58,106 13,536 6,035 2,522 150 80,301

49,893 12,266 3,441 2,226 146 67,400

Source: adapted from PMFAI Notes: for year ended 31 March

India is a net exporter of pesticides, and a major source of generic pesticides. FAOSTAT figures showed that pesticide exports totalled $305.9 million in 2002 (see Table 5.9).

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Table 5.9: Indian agrochemical exports, 1994-2002 ($ million) 199 4 Insecticides Fungicides Herbicides Others Total 71.2 4.8 6.7 1.5 84.2 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 +20.1 +16.6 - 3.6 +81.0 +19.9

147.8 4.6 5.9 3.9 162.2

184.4 5.0 3.8 3.4 196.6

168.3 5.6 2.7 9.6 186.2

195.9 9.2 2.5 4.0 211.7

207.5 10.7 6.4 8.6 233.2

241.7 15.2 9.9 3.9 270.6

227.9 14.4 9.3 3.6 255.2

273.6 16.7 9.0 6.6 305.9

Source: FAOSTAT

Imports totalled $59.0 million (see Table 5.10).


Table 5.10: Indian agrochemical imports, 1994-2002 ($ million) 1994 1995 1996 1997 1998 1999 2000 2001 2002 % change 2001-2002 + 9.0 + 4.7 +13.3 >100 +27.2

Insecticides Herbicides Fungicides Others Total

24.1 2.3 0.9 1.7 29.0

34.6 2.0 0.7 2.7 40.0

33.5 2.3 2.3 6.5 44.6

29.1 2.9 1.9 3.4 37.3

24.1 7.4 3.8 4.5 39.9

41.2 7.9 3.7 2.3 55.0

32.5 12.3 2.0 2.4 49.2

30.7 11.6 1.9 2.2 46.4

33.4 12.2 2.1 11.3 59.0

Source: FAOSTAT

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Pesticides attract an excise duty of 16%, although seeds and fertiliser are exempt. Industry has called for an 8% duty on ais and formulated products in 2004/05. The PMFAI pointed out that a reduction in the duty would lead to lower pesticide prices, which would help farmers, who were suffering due to erratic monsoon rains. It would also help industry; the tax burden on pesticide companies is estimated at over 36% due to additional indirect taxes such as sales tax. 5.4.2 GM GM plants are grown commercially in India. Monsanto's Bollgard insectresistant Bt cotton was launched in 2002. By August 2004, four GM cotton lines had been approved for commercial planting, all of which carried the Bollgard trait. In 2003, the company estimated that almost 75,000 Indian farmers had planted its Bollgard cotton on 90,000 ha, or 1% of the countrys total cotton area. It estimated that this led to a 304,690-litre reduction in the use of insecticides against bollworms. This was an average reduction of two to three sprays per acre. The government has been clamping down on the spread of unauthorised supplies of Bt cotton varieties. In 2004, estimates suggested that over 200,000 ha of GM cotton had been illegally planted in Gujarat, India's largest cotton-producing state. Despite opposition to GM technology in India, the government is keen to promote its use in agriculture. By February 2004, some 60 GM crop lines were undergoing field trials, led by rice, tomatoes, mustard/oilseed rape, cotton and tobacco. In 2004, an Agriculture Ministry task force said that the development of GM crops in India should focus on pest and disease resistance traits, rather than herbicide tolerance, and research should be directed towards underused crops. These included millet, legumes and tuber crops cultivated in arid and upland areas. Biopesticides and ICM methods should be given equal priority for development along with GM crops. However, biotechnology and seed companies have complained that India's regulatory process is too slow and lacks clarity, particularly in the latter stages, which is limiting the growth of agricultural biotechnology in India. The government hopes to establish a single regulatory body to handle approvals of GM crops by January 2005.

5.5
5.5.1

Japan
Agrochemical market Japan has a land area of around 36.5 million ha (FAOSTAT 2002). The agricultural area is only around 5.2 million ha, with 4.4 million ha down to arable land and 344,000 to permanent crops. Permanent pasture is around 428,000 ha. The area of cultivated land in Japan is falling as land is abandoned or used for new residential property. Japanese agriculture is highly intensive and crop yields are among the highest in the world. It is dominated by rice, with an estimated 1.7 million ha harvested in 2003 (FAOSTAT figures). This compares with wheat, the next most widely grown crop, of which just 212,200 ha was harvested. Other crops include soybeans (151,900 ha) and v egetables (110,000 ha),

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and also mixed grasses and legumes (570,000 ha), and grass for forage and silage (247,000 ha). The government has an ongoing programme to restrict rice production. Some 1.1 million ha has been taken out of production since the programme began in the mid-1990s, equivalent to 38% of Japan's total potential paddy rice area. In 2003, the total rice area fell by 23,000 ha. The agrochemical market has been in long-term decline, partly due to the government's measures to reduce the domestic rice area. Other pressures include the increasing amount of imported agricultural commodities, severe competition and falling demand for pesticides. Agrochemical sales fell by 3.5% to 323,500 million in the year ended 30 September 2003 (see Table 5.11), estimates the Japan Crop Protection Association (JCPA). This followed a 6.4% fall in sales the previous year. Sales by members of the JCPA account for some 95% of the Japanese agrochemical market. Herbicides are the most important category of sales by value (see Figure 5.3).
Figure 5.3: Structure of the Japanese market, 2003 (by value)

Insecticides/ fungicides 10%

Others 3%

Herbicides 32%

Fungicides 25%

Insecticides 30%

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September; others includes unclassified pesticides

In volume terms, sales were down by 3.1% to 250,000 tonnes, following the downward trend of recent years (see Table 5.12). Part of this is due to the switch to lower-volume products. Rice accounts for some 37% of agrochemical sales by value (see Table 5.13) and 46% by volume. While pesticide usage increased slightly in volume terms in 2003, the competitive market reduced sales in value terms. Traditional granules (30 kg/ha) represented 47% of volume sales on rice in 2003, but only 17% of value sales. Compact granule formulations (10 kg/ha) represented 36% of volume sales, and 40% of value sales. One-shot herbicides have been taking a growing share of the market 19,136 tonnes were used in 2003, although this was down by 2.5% on the previous year in actual sales. In value terms, sales fell by 3.3% to 37,504 million. The trend is towards greater use of labour saving "jumbo" rice herbicide formulations, which are thrown in from the edge of the paddy field. They are popular because a high proportion of rice growers are working part-time Informa UK Ltd, 2004 152 www.agrowreports.com

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on small plots, so convenience is important. Sales rose by 5.1% to 948 tonnes and by 7.7% to 5,539 million in 2003. Domestic manufacturers traditionally used a complex distribution system that significantly increased the cost of pesticides for the farmer. Agrochemicals from commercial domestic manufacturers were distributed through wholesalers then retailers to the farmer, or through wholesalers to a General Agricultural Co-operative (GAC) and then the farmer. Agrochemicals from co-operative manufacturers were distributed through Zen-Noh (Federation of National Agricultural Co-operative Associations) to a GAC and then the farmer. Multinationals began bypassing this network, directly marketing to the farmer. The impact on domestic manufacturers was significant enough to force the traditional distribution networks to reorganise. Zen-Noh has merged with the prefectural federations to produce a two-tier system, while some wholesalers/distributors have merged and closed. While the domestic market continues to shrink, Japanese companies have been able to gain some benefit from the weaker yen and higher exports. After increasing to 1998 (see Table 5.14), exports fell in the 1999 and 2000 pesticide years. The 11.8% rise in 2001 to 92,133 million was mainly due to changes in the yen/dollar exchange rate. Exports fell again slightly in 2002, before rising by 2.1% to 93,112 million in 2003, according to figures from the JCPA. This included bulk ais valued at 64,401 million and formulated products at 28,711 million.
Table 5.11: Japanese agrochemical exports, 1996-1998, 2001-2003 ( million) 1996 1997 1998 20001 2001 2002 2003 % change 2002-2003 +2.1

Total

84,031

97,301

100,535

82,409

92,133

91,161

93,112

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September; 1figure derived from percent change

Ishihara Sangyo Kaisha (ISK) has been the leading agrochemical exporter for some years. Its agrochemical exports amounted to 28,443 million in the year to 31 March 2004. The top five companies accounted for 71% of the total export value for the pesticide year 2003. The largest export market for Japanese manufacturers has traditionally been the rest of Asia. H owever, following the Asian economic crisis, exports to Europe and North America have increased in importance. In 2003, European exports rose by 20.2% as business benefited from new products and a weaker yen against the euro. The region became the largest destination for Japanese agrochemical exports, at 30,429 million or 40% of bulk ai sales (see Figure 5.4), and 39% of formulated product sales (see Figure 5.5). Exports to North America rose by 11%, as product launches offset the impact of a strong yen against the weak dollar.

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Figure 5.4: Agrochemical exports by region bulk ais, 2003 (by value)

Oceania 1% CIS 1% Africa 1%

Europe 40%

South America 10% Asia 20% North America 27%

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September

Figure 5.5: Agrochemical exports by region formulated product, 2003 (by value)

Africa 3% South America 11%

CIS 3%

Oceania 4% Europe 39%

Asia 32%

North America 8%

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September

In March 2003, amendments to the Pesticide Law came into force to prevent the use of unregistered products. They also remove registration hurdles for low-risk pesticides and those for use on minor crops. The Ministry of Agriculture's decision to toughen regulations was prompted by the discovery in 2002 of the widespread circulation of unapproved pesticides. Pesticides such as abamectin, captafol, cyhexatin, daminozide, gibberellic acid, maneb, myclobutanil, 1-naphthalene acetic acid and pentachlorophenol had been imported by 269 traders and sold to 3,793 farmers. Existing controls banning the sale of unregistered pesticides have been extended to prohibit the manufacture and import of these products.

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No organisation or individual, including private importers, can import unregistered products unless they are for experimental use. Penalties under the existing law were originally designed to prevent the distribution of sub-standard products and were therefore applied to manufacturers, importers and distributors. The penalty system was extended to cover users of unregistered products in the agricultural, home garden and ornamental sectors. Penalties for the sale or use of unapproved pesticides were increased from a one-year prison sentence or a 50,000 fine to a three-year prison sentence or a 1 million fine for individuals and a 100 million fine for a company. The amended law also increased the number of banned ais. These now comprise: the fungicides, captafol, hexachlorobenzene, quintozene and mercury-based products; the insecticides/acaricides, aldrin, lead arsenate, camphechlor, chlordane, cyhexatin, dieldrin, DDT, endrin, gamma-HCH, heptachlor, mirex, parathion-ethyl and parathion-methyl; and tetraethyl pyrophosphate and the herbicides, chlornitrofen, 2,4,5-T and pentachlorophenol. The new amendments also ban off-label use, which put the availability of products for minor crops in jeopardy. To overcome this, the Ministry has laid down new provisions for minor crops allowing single pesticide approval applications to cover certain groups of crops, rather than only an individual crop. In addition, existing approvals can be provisionally expanded to minor crops for three years. This will allow companies and local authorities to generate efficacy and residue data to support full registration for use on minor crops. A further amendment establishes a new category of "special pesticides" that are considered to present no risk to crops, human health and the environment. There would be no registration requirement for these products and no restrictions on who could prepare and use them. The Ministry is evaluating around 740 products that have been put forward for the new category. The first three to be included are acetic acid, sodium bicarbonate and indigenous natural biological control agents such as insect predators and parasitoids. Besides the amendments to the Pesticide Law, new food safety laws were introduced in May 2003. Industry representatives expressed concern over the additional workload for companies and regulators in generating and evaluating data. They warned that implementation of the new rules would be difficult because the latest revisions were carried out too rapidly and without sufficient consultation. The rate of agrochemical product approvals slowed in 2003 as regulators and companies grappled with these changes. In November and December, traditionally a popular time for approvals for the coming season, there were no registrations for ais new to the Japanese market. In comparison, the end of 2002 saw three new ais approved in Japan. The government has a programme to promote environmentally sustainable agriculture. For example, Japanese growers can label their vegetables, fruits and cereals as being grown using lower levels of pesticides, provided they use 50% less pesticide than that of the "prevailing" level in their area. This legislation was tightened in 2002, as the prevailing level had been Informa UK Ltd, 2004 155 www.agrowreports.com

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determined by the farmers, which had reduced consumer confidence in the system. From April 2004, the local government in the Shiga prefecture is offering farmers subsidies if they halve their pesticide use. The subsidies are to offset lower crop yields and increased labour costs for weeding. They will be paid at around 50,000/ha for 45 designated varieties of rice, fruit and vegetables. Farmers will have to enter a five-year subsidy contract and their pesticide use will be monitored. The scheme is expected to cost 100 million in the first year. The government hopes that 7,200 ha of rice paddies and 400 ha of vegetables will be eligible for subsidies by 2010 and that pesticide use in rice will be cut by 20%. The scheme is part of a plan to reduce agricultural pollution in Lake Biwa. Biopesticides are also gaining ground in Japan. In 2001, they accounted for only 0.5% of Japanese agrochemical sales, but some experts have suggested this might reach 5%. Around nine new biological control agents were approved during 2003. Several of these were from Arysta LifeScience. 5.5.2 GM No GM crops are yet approved for commercial planting in Japan. However, a wide range of insect-resistant and herbicide-tolerant crops is undergoing field trials. In 2003, the government started drawing up rules on growing GM crops, as part of its implementation of the Cartagena Protocol on Biosafety. In 2004, the Ministry of Agriculture proposed guidelines for these trials. They include buffer zones to minimise cross-pollination and a notification process to provide information to local communities. The guidelines specify isolation distances of 20 m between GM and conventional rice, 10 m for soybean crops and 600 m for maize. The organisation concerned must publicise plans to conduct field trials at least one month before the trial starts and hold meetings to provide information on the experiments to local communities. Some local authorities have also drawn up restrictions on the cultivation of GM crops. For example, the Hokkaido prefectural government has banned the outdoor cultivation of GM crops, while the Ibaraki prefectural government has established guidelines requiring growers to notify local authorities and neighbouring farms before they plant GM crops.

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Table 5.12: Japanese agrochemical sales, 1994-1999, 2001-2003 ( million, by product type) 1994 1995 1996 1997 1998 1999 2001 2002 2003 % change 2002-2003 + 1.2 - 6.7 - 4.9 - 4.4 - 6.8 - 3.5

Herbicides Insecticides Fungicides Insecticides/fungicides Others1 Total

98,424 109,605 104,448 28,388 54,820 395,685

98,186 107,889 100,631 27,726 53,168 387,600

94,735 111,443 96,491 24,957 52,998 380,624

89,891 107,349 97,589 25,360 57,194 377,383

81,597 102,213 93,660 25,414 54,722 357,606

77,101 100,504 89,713 30,447 53,076 350,841

84,014 101,364 85,761 34,458 50,931 356,528

100,300 104,300 85,600 33,300 11,800 335,300

101,600 97,800 81,200 31,900 11,000 323,500

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September; 1for 1994 to 2001, others includes unclassified pesticides and pesticides used on crops other than paddy rice, fruit and vegetables/field crops; for 2002 and 2003, includes unclassified pesticides only; figures may not add due to rounding

Table 5.13: Agrochemical sales by crop sector, 1994-1999, 2001-2003 (tonnes) 1994 1996 1997 1998 1999 2001 2002 2003 % change 2002-2003 + 0.6 - 6.2 - 7.3 - 3.1

Paddy Rice Vegetables/field crops Fruit Others1 Total

262,000 112,000 36,000 na 411,000

204,273 98,613 34,950 20,083 368,746

173,117 99,151 35,809 32,776 340,853

151,854 95,627 32,363 20,623 310,287

136,006 93,663 30,484 31,563 291,716

129,107 91,180 30,084 28,865 279,236

114,000 89,000 28,000 27,000 258,000

115,000 83,000 26,000 26,000 250,000

Source: adapted from JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September; 1includes unclassified pesticides

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Table 5.14: Agrochemical sales by crop sector, 1994-1999, 2001-2003 ( million) 1994 1996 1997 1998 1999 2001 2002 2003 % change 2002-2003 - 1.4 + 0.7 - 3.5 - 0.6 - 3.8 - 2.7 - 3.0 - 8.8 +14.0 0 - 6.7 -10.8 - 4.1 + 1.1 -22.8 - 3.5

Paddy rice (sub total) Herbicides Fungicides Insecticides Insecticide/fungicides Fruit (sub total) Insecticides Fungicides Herbicides Insecticides/fungicides Vegetables/field crops (sub total) Insecticides Fungicides Herbicides Insecticides/fungicides Others1 Total

162,500 66,650 40,303 27,793 27,754 69,097 30,594 26,433 11,897 173 109,268 51,218 37,712 19,877 461 54,820 395,685

150,535 64,663 35,249 26,452 24,171 66,558 31,166 24,334 10,840 218 110,533 53,825 36,908 19,232 568 52,998 380,624

141,089 57,322 34,000 25,402 24,365 66,741 29,012 25,461 11,974 294 112,359 52,935 38,128 20,595 701 57,194 377,383

127,602 50,196 30,108 22,706 24,592 64,290 28,455 24,331 11,341 163 110,992 51,052 39,221 20,060 659 54,722 357,606

124,637 49,517 26,153 19,236 29,731 60,756 25,925 24,161 10,536 134 112,372 55,343 39,399 17,048 582 53,076 350,841

126,337 52,615 21,301 18,807 33,614 64,812 27,283 25,409 12,011 109 114,448 55,274 39,051 19,388 735 50,931 356,528

121,400 53,500 19,900 16,000 31,900 58,300 26,800 22,800 8,600 100 111,300 55,500 36,600 18,300 900 56,200 335,300

119,700 53,900 19,200 15,900 30,700 56,700 26,000 20,800 9,800 100 103,800 49,500 35,100 18,500 600 43,400 323,500

Source: JCPA/Japan Chemical Week Notes: sales are for members of JCPA for pesticide year ended 31 September; 1includes other crops and unclassified pesticide, valued at 11,000 million in 2003; figures may not add due to rounding

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5.6

Malaysia
Malaysia has a land area of some 32.9 million ha (FAOSTAT 2002). Permanent crops are particularly significant, due to the countrys plantations, and accounted for 5.8 million ha in 2002. There was a further 1.8 million ha of arable land. Permanent pasture accounted for only 285,000 ha. The two main crops by area are oil palm fruit and natural rubber, with 3.5 million ha and 1.2 million ha harvested in 2003, respectively (FAOSTAT). Both are important plantation crops. Other crops include paddy rice (675,000 ha), coconuts (184,000 ha) and oilseeds (120,000 ha). Agrochemical sales reached a high of RM 392 million in 1999, with herbicides accounting for 74.0% of sales. Since then, sales have declined, with herbicide sales in 2002 falling to below 1994 levels (see Table 5.15). One factor behind this has been the price erosion of major herbicides, and the illegal pesticides trade according to the Malaysian CropLife & Public Health Association (MCPA), formerly the Malaysian Agricultural Chemicals Association (MACA). Sales rallied slightly in 2003, rising by 1.6%. This was due to strong commodity prices, which boosted herbicide sales, and increased consumer confidence, particularly among smallholders, the MCPA says. Demand for rodenticides also grew, due to an outbreak of rats. The association believes that the decline in use of agrochemicals over the last five years is due in part to the industrys effort to promote rational and effective use of agrochemicals. MCPA is continuing to educate growers on safe and effective use of agrochemicals, and to ensure that good agricultural practice and IPM are being adopted on a wide scale. After herbicides, insecticides are the second highest selling category, with 20% of sales in 2003 (see Figures 5.6), 1.6% down on 2002. Pests have increased in Malaysian crops in recent years, according to Agriculture Department statistics. Statistics showed that the area of rice affected by leaf-folders (Cnaphalocrocis medinalis) increased almost eight-fold in 2002 compared with 2001. Rice damage by brown plant hoppers (Nilaparvata lugens), white-backed plant hoppers (Sogatella furcifera) and rodents also increased. The golden apple snail ( Pomacea canaliculata ) was also found, but caused little damage in 2002.

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Figure 5.6: Structure of the Malaysian market, 2003 (by value)

Fungicides 7% Insecticides 20%

Rodenticides 4%

Herbicides 69%

Source: adapted from MCPA

Bagworms (Metisa plana) are the major problem in palm plantations, affecting 20-30% of oil and coconut palm areas. Continued use of the same type of pesticides has removed the natural enemies. Rhinoceros beetle (Oryctes rhinoceros) populations are on the increase as a result of the adoption of a zero-burning policy. The Department also estimated that certain weeds, particularly weedy rice in paddy fields, increased by almost ten-fold in 2002. In 2002, the Malaysian Pesticide Board began phasing out the non-selective herbicide, paraquat, and the insecticide/rodenticide, calcium cyanide, both of which are used particularly in plantations. While all current uses of existing products could continue, the following measures applied to both ais with immediate effect: no registrations will be renewed once they expire; all new applications for registration or re-registration will be rejected; and all applications currently under consideration will be stopped. The Board pointed out that more cost effective and "less risky" alternatives were readily available. There were over 100 paraquat products registered in Malaysia. The last registration is due to expire in September 2005. However, the registration of Syngenta's own brand of paraquat, Gramoxone, which had a share of over 50% of the Malaysian paraquat market, expired in September 2003. Non-governmental and environmentalist organisations have been campaigning for the removal of paraquat for several years, mainly to reduce the incidence of pesticide poisoning among plantation workers in developing countries. The decision was taken without prior consultation with the industry or user groups. The MCPA and user groups are lobbying with regard to user requirements, safety and cost/benefit issues. An MCPA study estimated that the total economic effect on Malaysian agriculture of a paraquat ban would amount to Ringgit 2,730 million over ten years. This comprises increased weed Informa UK Ltd, 2004 160 www.agrowreports.com

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control costs of Ringgit 1,570 million and lost revenues of Ringgit 1,160 million due to lower yields. The oil palm sector would be worst affected. Smallholders growing oil palm, rubber and fruit will bear a large share of the costs and their annual incomes will fall by 3-7% in the medium term. Malaysia is amending its agrochemical legislation to impose stricter controls to prevent the sale and use of unapproved pesticides. The changes form part of the Pesticides (Amendment) Bill 2004, which will update the existing Pesticides Act 1974. The proposed amendments were debated in Parliament in July 2004 and cover all aspects of pesticide registration, use and storage. They include the imposition of tougher enforcement measures on those who supply unregistered pesticides. In addition, the penalty system will be extended to cover end-users. Manufacturers will also have to comply with stricter data requirements for their approval applications. However, the period required before products have to be re-registered will be extended from three years to five years. There are some 650 pesticides registered in Malaysia, but only 200 are in use. Annual monitoring and assessment of the 4,000 pesticide retailers in the country will be intensified.

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Table 5.15: Malaysian agrochemical sales, 1994-2003 (RM million, by product type) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 % change 2002-2003 +2.4 - 1.6 0 + 7.7 + 1.6

Herbicides Insecticides Fungicides Rodenticides Total

210 41 14 11 276

220 43 15 11 289

227 47 15 11 301

245 52 17.5 11.5 326

235 58 19 13 325

290 65 22 15 392

273 68 23 14 378

220 70 25 11 326

209 62 23 13 307

214 61 23 14 312

Source: adapted from MCPA Notes: figures may not add due to rounding; public health pesticides accounted for sales of RM 194 million in 1999, RM 205 million in 2000, RM 212 million in 2001

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5.7
5.7.1

New Zealand
Agrochemical market New Zealand has a land area of some 26.8 million ha, of which 17.2 million ha is down to agriculture (FAOSTAT 2002). Arable land is around 1.5 million ha and permanent crops 1.9 million ha, while permanent pasture is around 13.9 million ha. Barley is the main cereal grown, with 70,300 ha harvested in 2003 (FAOSTAT estimates). Fodder crops are also particularly important. The New Zealand agrochemical market was worth NZ$198.5 million in 2003, according to figures reported by the agricultural and veterinary chemicals industry association, Agcarm (see Table 5.16).
Table 5.16: New Zealand agrochemical sales, 1997-2003 (NZ $ million, by product type) 1997 Herbicides Fungicides Insecticides Other Total 84.9 32.9 21.4 8.3 147.5 1998 83.7 34.1 26.4 8.1 152.3 1999 89.4 37.3 26.5 8.9 162.1 2000 101.1 41.7 27.1 10.8 180.7 2001 109.2 44.8 32.9 12.7 199.6 2002 106.8 43.4 30.9 14.6 195.7 2003 104.4 44.6 35.2 14.3 198.5 % change 2002-2003 - 2.2 + 2.8 +13.8 - 2.1 + 1.4

Source: adapted from Agcarm Notes: figures may not add due to rounding

Herbicides are the largest product sector in value and volume terms, accounting for over half of all sales (see Figure 5.7). Glyphosate dominates the herbicide sector, specifically due to its low cost and broad spectrum. The insecticide sector accounted for less than 10% of total agrochemical usage in 2003.
Figure 5.7: Structure of the New Zealand market, 2003 (by value)
Other 7% Insecticides 18%

Herbicides 53%

Fungicides 22%

Source: adapted from Agcarm

New laws governing the regulation of pesticides in New Zealand came into effect in July 2001 the 1997 Agricultural Compounds and Veterinary Medicines (ACVM) Act and the 1996 Hazardous Substances and New Organisms (HSNO) Act. All agricultural pesticides require registrations under the ACVM Act administered by t Ministry of Agriculture and Fisheries he Informa UK Ltd, 2004 163 www.agrowreports.com

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(MAF) and, as hazardous substances, also require approvals from the Environmental Risk Management Authority (ERMA) under the HSNO Act. The HSNO Act replaced or amended some 20 earlier laws regulating a wide range of substances including pesticides, fertilisers, chemicals, paints and explosives. There was a three-year transition period for the transfer of pesticide registrations to the ACVM Act during which time they continued to be regulated under the 1979 Pesticides Act. Non-agricultural pesticides are exempt from registration under the ACVM, but as hazardous substances require ERMA approvals. These include household and garden pesticides, public health pesticides, industrial pest control products and anti-fouling paints. The New Zealand government has a strategy aimed at reducing the risks from pesticides. It covers a number of themes, including the need for: improved education among pesticide users; improved pesticides and use of pesticides; and better information and more research. It proposes a number of policy instruments that could achieve risk reduction: environmental user charges or pesticide taxes; transferable permits that would put quotas on selected pesticides; risk reduction targets; and funding for more reassessments of individual pesticides. 5.7.2 GM Comparatively little field-testing of GM crops has taken place in New Zealand. In 2000, the Forest Research Institute successfully applied to test herbicide-tolerant trees in New Zealand. The next request to field test a GM crop there came in 2003, when the New Zealand Institute for Crop and Food Research (ICFR) successfully applied for permission to conduct contained field trials of GM glyphosate-tolerant onions. The MAF does not expect commercial approvals for the release of GMOs for some time. In October 2001, the government banned applications for commercial introductions of GM crops for two years. The moratorium expired on 30 October 2003, although no applications for commercial release of GMOs have since been submitted to the ERMA. In 2004, draft legislation aimed at restoring the moratorium the Hazardous Substances and New Organisms (Moratorium Reinstatement) Amendment Bill was selected by the Green Party in a ballot of private members' Bills.

5.8

Pakistan
Pakistan has a land area of some 77.1 million ha, of which arable crops account for 21.4 million ha (FAOSTAT 2002). Permanent crops covered 672,000 ha, and permanent pasture 5.0 million ha. The main crop by area is wheat, with some 8.1 million ha harvested in 2003 (FAOSTAT estimates). Other crops include seed cotton (3.0 million ha), paddy rice (2.2 million ha), chickpeas (1.7 million ha) and sugar cane (1.1 million ha). Agrochemical sales rose by 25.9% in 2003, to Rs 11,199 million, according to CropLife Pakistan (see Table 5.17). Insecticide, herbicide and fungicide sales all rose. The Department of Plant Protection also produces figures (see Table 5.18). These cover the whole market, but include only the net import price without taxes and added value.

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Table 5.17: Pakistani agrochemical sales, 2000-2003 (Rs million, by product type) 2000 2001 2002 2003 % change 2002-2003 +43.6 +24.5 +18.0 0.0 +25.9

Insecticides Herbicides Fungicides Others Total

8,519 1,219 202 306 10,246

8,975 1,164 204 256 10,600

7,280 1,085 245 286 8,896

9,066 1,558 289 286 11,199

Source: adapted from CropLife Pakistan Notes: sales are for members of CropLife Pakistan

From March 2001, the government imposed a 15% general sales tax on pesticides, as part of a package of e conomic measures agreed between Pakistan and the International Monetary Fund (IMF). The tax covered all pesticides for retail sale and also imports of technical ais and intermediates used in the formulation of pesticides. In 2002, local farmers claimed the tax meant they could not afford to control pests. They claimed that lack of insecticides cut production by 2025%. Areas of particular concern included insecticides for use on vegetables and tobacco, fungicides for use on fruit, and herbicides for use on wheat, maize, sugar cane and tobacco. Despite its unpopularity, the tax still stands. There are also import duties on ais, intermediates and other raw materials. In 2002, the Pakistan Agricultural Pesticides Association (PAPA) changed its name to CropLife Pakistan, following the lead of the global agrochemical industry federation. Estimates suggest that sales of cotton pesticides made up some 74% of total agrochemical sales in 2003, with sales up 24% on 2002 (see Figure 5.8). The major cotton growing province is the Punjab. Bollworms are a serious problem. The market was predicted to be set for a shake-up as insect-resistant Bt cotton was due to be introduced in 2003. However, this has not yet taken place, due to the government not yet having passed biosafety guidelines.
Figure 5.8: Structure of the Pakistani market by crop, 2003 (by value)

Fruit and vegetables 8%

Rice 4%

Others 5%

Cereals 9%

Cotton 74%

Source: adapted from CropLife Pakistan

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The cotton sector was followed a long way behind by cereals, with a 9% share of the market, and fruit and vegetables, with an 8% share. A lack of water for irrigation is one factor that has held back the development of the agrochemical market. Insecticides are by far the major product category, with 80% of sales in 2003 (see Figure 5.9). Organophosphates are the dominant type of insecticides used.
Figure 5.9: Structure of the Pakistani market, 2003 (by value)

Herbicides 14%

Fungicides 3%

Others 3%

Insecticides 80%

Source: adapted from CropLife Pakistan

As with other Asian markets, farmers in Pakistan have been suffering from low crop prices, which are limiting their purchasing power. Imports of cheap pesticides from China have increased in recent years and this has added to the competitive pressure on the Pakistani subsidiaries of the multinational companies. In 2002, the PAPA estimated that Chinese generic pesticides had captured some 60% of the Pakistani market. Only one company, the government-run Stedec (Karachi), manufactures a few products under the control of the Pakistan Council of Scientific Institute Research. Most pesticides are imported for local formulation and packing. Pakistan has a problem with substandard and fake agrochemicals. The government has introduced legislation to combat this, and improve the professionalism of the industry: The 2003 Adulteration Offences Bill (which also covers food and pharmaceuticals) allowed convictions relating to the production and supply of fake or sub-standard pesticides to attract prison sentences of up to 25 years and a fine of Rs 1 million. In 2004, the Ministry of Agriculture amended the country's Agricultural Pesticides Rules (1973). The rules prohibit the bulk sale of pesticides by importers to distributors for formulation. Importers, formulators and manufacturers now have to do all refilling, repacking and labelling for retail sale before they ship the products to distributors. Importers must also provide a declaration that an imported ai has not been banned by the US, the EU, China, Japan or the Organisation for Economic Co-operation and Development (OECD). In 2004, the government made it mandatory for local pesticide companies to employ staff that had agricultural degrees. Informa UK Ltd, 2004 166 www.agrowreports.com

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The Pakistan agrochemical industry has long urged the government to help set up a domestic manufacturing industry. In 2004, the Pakistan Crop Protection Association (PCPA), which represents importers of generic pesticides, submitted an action plan to the government proposing tax concessions for companies willing to invest in local manufacturing facilities. It suggested that income from a pesticide product should be treated as taxfree for ten years from the date of its first registration. The government now also feels that local pesticide manufacturing would help eliminate sub-standard and counterfeit products, and benefit farmers by supplying pesticides at lower prices. The government's Experts Advisory Committee (EAC) began developing a pesticide industry policy in 2002. In May 2004, Pakistan agricultural officials met representatives from Chinese companies at the Pakistan Embassy in Beijing (China) to discuss setting up joint ventures to produce and formulate pesticides in Pakistan. The Pakistan government hopes that the companies will help Pakistan produce higher quality pesticides at a reasonable price.

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Table 5.18: Pakistani consumption of pesticides, 1994-2002 1994 Tonnes Imports Production Total Rs million Total1 10,693 14,175 24,868 1995 20,136 23,239 43,375 1996 24,151 19,068 43,219 1997 24,168 13,836 38,004 1998 22,765 18,811 41,576 1999 27,210 18,470 45,680 2000 19,764 41,535 61,299 2001 20,678 26,914 47,592 2002 27,103 42,794 69,897 % change +31.1 +59.0 +46.9

5,808

7,274

9,987

9,904

6,960

7,324

4,971

7,741

6,790

-12.3

Source: adapted from Food, Agriculture & Livestock Division, Department of Plant Protection Notes: 1using only net import price without including taxes and value addition

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5.9
5.9.1

South Korea
Agrochemical market South Korea has a land area of some 9.9 million ha, with arable land covering 1.7 million ha (FAOSTAT 2002). Permanent crops cover only 193,000 ha, and permanent pasture 56,000 ha. The main crop is paddy rice, with an area of 1.0 million ha harvested in 2003 (FAOSTAT estimates). Fresh vegetables are the next largest crop by area, at 124,000 ha in 2003. These two crops dominate the agrochemical market. The South Korean agrochemical market fell by 22.2% in dollar terms in 1997 due entirely to the strength of the US dollar, which appreciated by 50% against the South Korean Won (see Table 5.19). Sales were still depressed in 1998 due to the Asian economic crisis. The market has since risen. Sales by members of the Korea Crop Protection Association (KCPA) were worth some $774 million in 2003 at the factory-gate level, down 0.3% on 2002. The falls in 2002 and 2003 were due to fewer pest outbreaks, and the use of IPM, which has resulted in lower spraying frequencies.
Table 5.19: South Korean agrochemical sales, 1994-1998, 2001-2003 ($ million, by product type) 1994 Horticulture 1 fungicides insecticides herbicides Paddy rice fungicides insecticides herbicides PGRs Others2 Total 1995 1996 1997 1998 2001 2002 2003 % change 2002-2003 + 0.6 + 4.7 - 5.6 + 5.6 -11.1 - 8.5 - 4.4 + 6.3 0.0 +11.1 - 0.3

453 194 170 89 232 69 70 93 19 7 711

483 164 221 98 233 62 72 99 18 7 741

439 137 202 100 244 60 79 105 17 7 707

321 96 142 83 211 50 75 86 11 5 548

379 122 154 103 301 74 132 95 11 6 697

470 184 183 103 287 95 101 91 20 7 784

478 193 196 89 297 82 91 96 19 9 776

481 202 185 94 264 75 87 102 19 10 774

Source: adapted from the KCPA (formerly the Korean Agricultural Chemical Industry Association) Notes: 1includes upland rice and orchards; 2includes spreaders and stored grain insecticides

The total market may be worth $850 million, and is expected to stabilise at around $680 million in the long term, says South Korean company Dongbu Hannong Chemical. The company believes that a strategy of business diversification and strengthened marketing and distribution activities will be required for survival in the country's stagnating market. The horticultural sector accounted for sales of $481 million in 2003, or 62.1% of the market. Horticultural fungicides are particularly important, with 27% of the market in 2003 (see Figure 5.10).

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Figure 5.10: Structure of the South Korean market, 2003 (by value)

Paddy rice herbicides 13%

PGRs 2%

Others 1%

Horticultural fungicides 27%

Paddy rice insecticides 11% Paddy rice fungicides 10% Horticultural herbicides 12%

Horticultural insecticides 24%

Source: adapted from KCPA

South Korean farmers have reduced their pesticide purchases in recent years due to the economic depression and competition from higher imports of agricultural commodities. In 2001, rice farmers spent an average of some $2 per ha on pesticides for rice paddies, down 6.7% on the year before, according to National Statistical Office figures. The decline reflected lower levels of blight damage and insect infestation. Pesticides accounted for 4.9% of average total production costs per ha of rice paddies in 2001. The South Korean government has had a long-term policy of reducing the total use of agrochemicals. It is gradually embracing new laws and regulations in line with other OECD countries. As part of this, it has started re-evaluating old agrochemicals. The first phase of the review for products registered in or before 1986 was completed in December 2001. The review will still allow many old products to stay on the market. The re-registration of g eneric pesticides is contentious. In 2002, the EU Chamber of Commerce in Korea (EUCCK) complained that the Rural Development Administration (RDA) was not making any distinction between dossiers with regard to the origin of ais. This meant that data submitted by original approval holders could be used to register generics. The original dossier should only be used for the approval holders' own products, EUCCK said. The EUCCK was set up in Korea to support EU businesses selling to the country. It would like to see the introduction of a data compensation system similar to that in the US, where generic companies pay for the use of data submitted by the original approval holder. The original data package, together with additional studies provided for the review, should be protected by IPR laws. IPR protection provisions exist in the Agricultural Management Act, but the RDA did not implement the regulations in this area effectively, the EUCCK said. It would like to see a proactive system introduced, whereby an applicant submits a declaration of no infringement at the time of the initial filing of the application with the RDA. Many generic products sold in Korea are not identical to the original product and contain impurities for which there is no toxicological information, Informa UK Ltd, 2004 170 www.agrowreports.com

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claimed the EUCCK. It called on the authorities to ensure that all applications for the registration or re-registration of generic products either provide proof that the impurity profile is similar to the original product or provide a toxicological profile. The EUCCK also pointed out that the regulations were unclear and data requirements for re-registering old products were too easy to comply with. Newer products are usually used in smaller quantities, so would provide an easy way for the government to reach its reduction targets without imposing restrictions or quotas. 5.9.2 GM crops In 2001, the Ministry of Agriculture and Forestry (MAF) forecast that GM crops could be grown commercially in South Korea within four to five years. However, while no GM crops are officially cultivated yet, some farmers are thought to growing them. The MAF has issued proposed guidelines for the safety assessment of GM crops before they are entered into field trials or commercialised. The voluntary guidelines will become mandatory when Korea implements the Cartagena Protocol on Biosafety. The MAF plans to create a BioIndustry Division with responsibility for safety assessment, labelling and other policies relating to GM crops. In the short term, however, the MAFs GMO Task Force Team will undertake these tasks. This team was set up in 2001 in preparation for new labelling laws that came into force in March 2001. Unprocessed soybeans, bean sprouts and maize must be labelled if the content of GM material is 3% or above. Similar controls on processed food products came into force in July 2001, and are implemented by the Korean Food and Drug Administration (KFDA). Labels are required if: the primary ingredient is subject to MAF GMO labels; the GM ingredient is one of the five major raw materials used in the product; and GM proteins are still present in the final product.

5.10

Thailand
Thailand has a land area of 51.1 million ha, of which some 15.9 million ha is arable land (FAOSTAT 2002). Permanent crops cover 3.5 million ha, and permanent pasture 800,000 ha. Paddy rice is the main crop by area, with 11.0 million ha harvested in 2003 (FAOSTAT estimates). Other crops include rubber (1.9 million ha), maize (1.2 million ha), cassava (1.1 million ha) and sugar cane (970,000 ha). The Thai agrochemical market was worth $212 million in 1998, according to estimates of sales by the Thai Crop Protection Association (TCPA). Figures from the Thai Department of Agriculture show that since 1998, imports have risen from $125.1 million to $274.7 million (see Table 5.20).

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Table 5.20: Thai agrochemical imports, 1998-2003 (million Baht, by product type) 1998 Insecticides Herbicides Fungicides PGRs Others Total Total ($ million) 2,078 2,217 586 89 130 5,099 125.1 1999 1,933 1,977 558 111 147 4,726 125.1 2000 2,001 3,841 1,120 114 218 7,294 182.3 2001 2,553 4,502 1,265 170 269 8,761 197.1 2002 2,931 4,349 1,444 145 248 9,116 212.3 2003 3,136 6,101 1,678 202 269 11,386 274.7 % change 2002-2003 + 7.0 +40.3 +16.2 +39.3 + 8.5 +24.9 +29.4

Source: adapted from Thai Department of Agriculture Notes: exchange rate used for total in US$ is 0.02454 (1998), 0.02646 (1999), 0.02499 (2000), 0.02250 (2001), 0.02329 (2002) and 0.02413 (2003)

By volume, imports have risen from 33,078 tonnes to 79,837 tonnes in 2003 (see Table 5.21).
Table 5.21: Thai agrochemical imports, 1998-2003 (tonnes, by product type) 1998 1999 2000 2001 2002 2003 % change 2002-2003 - 8.3 +37.9 +16.1 +47.7 - 4.3 +22.2

Insecticides Herbicides Fungicides PGRs Others Total

12,861 15,108 3,783 587 738 33,078

16,174 15,376 4,653 832 1,544 38,580

12,533 29,715 7,393 1,162 1,936 52,739

16,674 32,423 7,825 1,460 2,160 60,541

16,357 36,596 8,892 1,417 2,048 65,310

14,994 50,464 10,326 2,093 1,960 79,837

Source: adapted from Thai Department of Agriculture

Herbicides are the most important sector in the Thai market (see Figure 5.11).
Figure 5.11: Structure of Thai imports, 2003 (by value)

Fungicides 15%

Others 4%

Insecticides 28%

Herbicides 53%

Source: adapted from Thai Ministry of Agriculture

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Chapter 5: Australasia

World Crop Protection Markets

For several years, Thailand has been concerned about risks to users and the environment from pesticides, and also the high pesticide residues in some food, which endangers consumers and puts the countrys exports at risk. In 2002, the government approved a national policy to reduce pesticide use. One major aim was to reduce the large number of substandard pesticides supplied to farmers by improved registration procedures and training for pesticide formulators and dealers. Various programmes have focused on reducing pesticide use and promoting IPM. The Danish government, for example, funded a $3 million project to reduce pesticides in areas of intensive vegetable and fruit production. The first phase ended in 2004, but is to be extended to September 2006 to allow further training for farmers and consumers. Similar campaigns have aimed to reduce insecticide usage on rice, using leaflets, posters, cassettes and radio broadcasts to promote this message to farmers. There has been some opposition to the development of GM crops in Thailand. In 2001, a recommendation was put to the Cabinet for a moratorium on field trials until a biosafety law were in place. The Cabinet approved the recommendation as a "notification", which led to uncertainty over whether this amounted to a legal Cabinet resolution. The Ministry of Agriculture believed field trials should continue and requested clarification from the government. However, all field trials were put on hold due to the legal uncertainty. Monsanto had been conducting trials on Bt cotton and maize there for several years, and had been hoping that its insect-resistant cotton would be the first GM crop on the Thai market. In August 2004, the Cabinet was due to formally approve a recommendation from the National Biotechnology Committee and the Prime Minister that the moratorium should be lifted. However, this was postponed after widespread condemnation by consumer, environmental and farming groups.

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