Integrated Pest Management farming methods get a boost in Europe
The biologicals market for crop protection products has seen healthy global growth in recent years, but In Europe there is still frustration seen at significant regulatory hurdles to successful product approval.
Sixty years after Rachel Carson wrote her seminal work Silent Spring, there is optimism however that at long last there is a sea-change in the deployment of more environmentally friendly farming methods, as consumers, growers and governments become increasingly aware of the negative impacts of over-use of certain inputs on the land.
The global Biological Control Agents (BCA) market is estimated to be worth around US$3 billion and growing at a rate of 7% per annum. It comprises around 1000 active ingredients (Ais), distributed between four sectors: microbials, plant extracts, semiochemicals and macrobials. Of the four sectors, microbials is by far the largest, accounting for around 60% of the world market.
Europe and North America each account for around one 30% of the market, with BCAs accounting for around 8-9% of each market. Asia and Latin America account for 20% and 16% respectively. Europe has achieved this share despite having a less favourable regulatory environment than most other regions.
Over 500 companies are currently involved in the BCAs market. They range from large, highly diversified companies, agricultural input companies, agribusinesses and specialist biologicals companies, whether start-ups or established.
A large amount of venture capital investment is flowing into the sector, although financiers are highly selective as to the technology adopted and subsequently sponsored, so strong networking and sales skills are crucial to secure market share.
It is no longer sufficient simply to have a good product, as there is an increasing plethora of competitive players. There are lower barriers to market entry for biologicals compared with those for most conventional crop protection products, although the regulatory lead time is lengthening in the EU as scrutiny processes become more stringent. For the leading products there are multiple suppliers and brands, which are potential M&A targets.
EU targets
European Union binding targets just announced to reduce chemical pesticides usage by 50% by 2030 should help to boost interest and market activity, as conventional actives disappear from the marketplace.
But not all conventional Ais can be effectively replaced by biologicals, hence the European Commission has suggested that Integrated Pest Management (IPM) methods, in which a hybrid mix of both biological and conventional AIs is promoted by organisations such as LEAF, should be increasingly adopted by farmers over the next decade or so, as other products are phased out or banned.
There is also optimism that as the UK and French governments start to approve vitamin enhanced gene-edited crops such as potatoes and tomatoes over the next five years that hybrid biological applications will in turn benefit from an IPM scenario.
Regenerative farming methods utilising biologicals to improve natural soil quality and biodiversity should provide a further incentive for biological products, with produce certification providing a price premium, combined with government policy, and interest from global agribusiness companies like Cargill in regenerative crops like grains, cotton and soy growing.
A recent US study showed that regenerative farming systems can provide greater ecosystem services and profitability for farmers than an input-intensive model of corn (maize) production. Pests were ten-fold more abundant in insecticide-treated corn fields than on insecticide-free regenerative farms, indicating that farmers who proactively design pest-resilient food systems can potentially outperform farmers that combat their pests chemically. Regenerative fields had on average 29% lower grain production, but 78% higher profits over traditional corn production systems, by attracting a market premium.
If you are interested in more details of our reports on Biological Control Agents (BCAs) and IPM, please contact Crop Science special reports publisher Dr. Alan Bullion at alan.bullion@s&pglobal.com or 07766 968820. A sample can be found here: Biological Control Agents 2022 | IHS Markit (now part of S&P Global)
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.