Growth and economics of pesticide use in India: overview - analysis of the environment, patterns and market potential

Abstract

The pesticide industry is the most dynamic agricultural input industry in India, being substantially in private hands. Yet the pesticide use levels in India are among the lowest in the world. This paper presents an overview-analysis of the pesticide scenario in India. It develops a framework of the market environment within which the growth of pesticide use takes place in developing countries. It then uses this framework to study the growth and patterns of pesticide use in India. It finds that pesticide use in India is highly concentrated by crop and geographic area, and is therefore showing declining growth rates. A major reason appears to be very limited market development efforts by the firms leading to poor conversion of a large potential into effective demand. Output markets/prices, input prices, high yielding varieties and wage rates play important roles in determining use. However, many non-price factors are also very important. Pesticides are also seen as an insurance by the farmers and therefore higher than optimum use is frequently reported. The new economic environment in India will offer ample opportunities for growth. However, the industry will need to look at the market environment more comprehensively and will need to play a proactive role in market development.