Feature
Agrochemical Industry in China: From Self-reliance to
Export to Discovery & Development
Co-authored by Sridhar Iyer*, Larry Liu, Bhavini Tailor & Sumit Tiwari
*corresponding author (email address: sridhar.iyer@jrfonline.com & sridh_74@yahoo.com )
Introduction:
Like the history of pesticides1, China also went through its
share of using Natural Pesticides, Inorganic Synthetic Pesticides &
then later Organic Synthetic pesticides in a chronological fashion.
There is a suggestion that till 1970 Natural Pesticides were largely
used while between 1970 to 1980 there was the use of Inorganic
pesticides followed by Organic pesticides from 19802.
As expected, China moved from self-reliance in pesticides
through its manufacturing to gaining expertise in manufacturing
leading to an increase in export. The actual growth story of the
Chinese Pesticide Industry probably started in the 1990s3. As
of now China is a leading producer of pesticides and a leading
exporter of the pesticides [Annual Output = 3.7 M tons & likely
around half of it is exported]3.
In this journey, it has been aided by strong policies, putting
the right infrastructure and creating the right incentives for
manufacturers to export. From a well-written article4 we can
summarise the following points:
1996: Articulated a white paper on policy for grain self-
sufficiency
2003: Grain area dipped in spite of the policies and mainly
attributed to the subsidies not reaching the farmers (distributors
benefitted from the subsidies)
2004-2006: Another policy document by the government
to support the agricultural sector whereby a direct subsidy to
farmers was introduced along with phasing out the agricultural
taxes. This move particularly seemed to have helped the farmers
economically and hence they started to use pesticides more than
before. The flip side was that many substandard pesticides were
rampant in local market during this time as the internal demand for
pesticide increased.
2004 also saw that the government proactively encouraging
exports of pesticides (for 48 products VAT was removed and
11% export tax rebate was also put into place). Incidentally,
this coincided with glyphosate patent expiry and the Chinese
Agrochemical companies increased their export of glyphosate
72 Annual Review 2019
exponentially between 2004 to 2008.
2008: Economic recession had an impact on Chinese
Agrochemical exports. The government started multiple changes
to tax rebate as a counter-strategy. Seventy-five (75) pesticides
underwent cancellation of export tax rebate (but glyphosate was
not touched!). Then, the government changed track and raised tax
rebate for certain pesticides like acaricide dicofol, carbofuran, bio-
pesticides, acaricide aramite, chlorethoxyfors and glyphosate to
name a few important ones.
2010: Partial recovery of the agrochemical industry from the
Economic recession.
2012: State policy to encourage certain combination products
resulting in the increase of wheat production and also pesticide
manufacturing. This was largely aimed at increasing the
productivity of domestic farmers.
2014: China starts initiating policies on “Environmental
Protection & Modern Initiatives” which included efficient pest
management systems, phasing out of toxic pesticides in favour of
biopesticides, water pollution control & certain industrial areas like
Lianyungang, Nantong, Yancheng Jiangsu Province were being
closed in a stepwise manner. This had an effect of a decline in
pesticide output in the years 2017-18.
2015: China initiates a process of merging state-owned
enterprises to reduce the number to increase efficiency. These
newly merged companies would be the “National Champions”
for Chinese Agrochemical Industry. Among them, the most
important was Chem China which in 2017 acquired Israel’s Adama
Agricultural Solutions and Syngenta AG, thereby immediately
becoming a global player.
Further, the China Pesticide Industry Association (CCPIA)
started advising the Industry for example in 2018 CCPIA
forecasted a number of pesticides that might be in demand in
China for that year ( glyphosate, acetochlor, atrazine, butachlor,
carbendazim, chlorothalonil, copper(II) sulfate, dichlorvos,
thiosultap-disodium, and trichlorfon). These types of pointers
might help the local manufacturers in making the yearly plan.
There is an interesting article in PNAS5 by research groups