Pesticide companies allege Rs 7k-cr ‘scam’

By: |
Hyderabad | April 10, 2018 12:53 AM

The manufacturers have demanded the Centre not to allow foreign companies to import pesticide formulations without registering technical details or information about the active ingredients with Indian regulators.

PESTICIDES, AGRICULTURE SECTOR, AGRICULTURE INDUSTRYThe manufacturers have demanded the Centre not to allow foreign companies to import pesticide formulations without registering technical details or information about the active ingredients with Indian regulators. (PTI)

There is an unnoticed scam of more than Rs 7,000 crore by permitting import of readymade pesticide formulations by multinational companies. If the imports are not stopped and with no supportive policy for the domestic pesticide industry, there could be a forex loss of over Rs 10,000 crore by 2020, says Pradip Dave, President, Pesticides Manufacturers and Formulators Association of India (PMFAI).

The manufacturers have demanded the Centre not to allow foreign companies to import pesticide formulations without registering technical details or information about the active ingredients with Indian regulators. A technical is a high purity chemical which is the active ingredient and first registered anywhere in the world.

According to the manufacturers, the proposed Pesticide Management Bill-2017 should provide a level playing field for Indian companies as it is being finalised in the next three months. Further, there is no clarity on definitions and registration procedures for formulations and technical details which may lead to harassment of manufacturers and traders by authorities.

The country imports Rs 16,000 crore worth of formulations every year while the domestic demand was pegged at up to Rs 25,000 crore. The registrations are being granted for imports of readymade pesticide formulations without registering Technical Grade material, twisting Insecticides Act, 1968. The Pesticides Management Bill 2017 (PMB 2017), the new legislation to replace Insecticides Act, 1968 to govern pesticides regulations, is suitable to importers and MNCs, thereby killing the domestic pesticides industries, he said.

Incidentally, there has been a 20% increase in prices for some of the products which were being imported from China and stopped recently. This calls for a comprehensive policy to step up local production, he added.

According to Raja Mahender Reddy, President, Confederation of All India Small and Medium Pesticides Manufacturers Association (CAPMA), one of the biggest problems faced by farmers as well as pesticide industry is the government policy of allowing registrations for import of readymade pesticide formulations without registering the Technical Grade material used in the formulations in the country. The policy guidelines created in the year 2007 gives total monopoly to importers, mainly MNCs to charge exorbitant prices from farmers for the pesticides imported, restricting entry of Indian manufacturers, he said.

The monopoly by importers leads to higher profit margins of over 200-400% looting poor farmers. For instance, Bispyribac Sodium 10% SC is a broad spectrum herbicide formulation used in rice cultivation. When there was single registration under formulation import of the product, the cost of the product was rS 8,500 KL but due to the judicial intervention by PMFAI through Gujarat High Court when registrations were granted for same product to two to three Indian companies, the price of the product came down to `3,000 KL. The bad policy of allowing formulation import without registering the Technicals has resulted in no new investments in new plants in last 10 years by big companies to manufacture Technical products in the country, thus leading to closure of many manufacturing factories of formulators in the country.

The Pesticides Management Bill 2017 (PMB 2017) is silent on the need for compulsory registration of Technical Grade pesticides (active ingredients) in India, which means it can create monopolies for formulation importers. Insecticide Schedule which is an integral part of Insecticide Act, 1968 is missing from PMB. Insecticide Schedule which serves as guide to identify all recognised/registered pesticides is very key for farmers and pesticide industry,” Mahender Reddy said.
In PMB 2017, there is no clarity on definitions and registration procedures for pesticide formulations along with Technical Grade products, which will lead to harassment of manufacturers and traders. Over regulations of exports of pesticides in PMB can adversely affect exports of pesticides.

Importing country imposes its own regulations on pesticides exported from India which is to be followed before any such pesticides are used in that country. Seeking huge data on export registrations will only hinder competitive edge in pesticide exports, he said.

The registration committee framed new guidelines in 2007 conflicting Insecticides Act 1968, which helped importers derive monopoly for products which are more than 25 years old. It is relevant to note that FAO/WHO and other major agricultural nations such as the US, Europe, Australia, Brazil, China, among others, also mandates registrations of Technical Grade Pesticides before granting registrations for Formulations except India. If at all registrations are to be granted for Formulation Import, then registration of Technical Grade products is made compulsory, which could avoid unjustifiable monopolies to avoid competitive market for key agri inputs like pesticide formulations.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Indian Bank gets shareholders’ nod to set off accumulated loss with share premium account balance
2FAU-G pre-registrations are now live, still no word on PUBG Mobile India
3Apple fined 10 million euros over “misleading” iPhone waterproofing claims