CCM:Impacts of No.1 Central Document on pesticide industry 09-09-2016

In 2015, the central government released the No.1 Document, which affects the development of the pesticide industry.


 

Source: Baidu


On 1 Feb., 2015, the No.1 Document of Several Opinions on Accelerating Reform and Innovation of Agricultural Modernization, which was authorized by the CPC Central Committee and the State Council, was issued by Xinhua News Agency. The Document was closely connected to the development of pesticide industry from different aspects, including land reform, food safety, ecological agriculture and e-commerce.

 

Firstly, the government is implementing pilot programs on rural land system reform, which triggers changes to pesticide sales models.

 

Consistently pushing forward pilot programs of rural land system reform will become the direction of modern agriculture. The essence of land transfer is to focus on market potential of land, so that it can provide a broader opportunity for the development of large-scale, intensive and highly efficient agriculture. Therefore, land transfer will bring tremendous changes to pesticide manufacturers. Land transfer will change how agricultural products are supplied and will have a profound influence on pesticide management and pesticide circulation channels, which will further alter the layout of pesticide industry.

 

With the expansion of intensive management of rural land, the operation of pesticides will be changed and circulation channels will become more focused and professional. In addition, pesticide manufacturers will compete more against all-round crop solutions and consolidated prevention and treatment of pests & diseases.

 

Secondly, the government attaches great importance on improving the quality of agricultural produce and food safety, which boosts the R&D of environmentally friendly pesticides.

 

The Document once again listed "the improvement of agricultural produces quality and food safety" as top priority. In recent years, many agricultural produces' quality and food safety scandals were exposed. In 2014, Pesticide Residue Standards officially came into effect, and set higher standards for pesticides industry. Therefore, the Document highlighted the determination to safeguard food safety and the quality of agricultural produces. This required pesticides enterprises to put greater emphasis on developing environmentally safer pesticides.

 

Thirdly, the government is supporting the development of pesticide e-commerce, which changes how pesticides are distributed.

 

The Document affirms the government support for innovating new distribution methods and systems for agricultural produce. This provides an opportunity for the development of pesticide e-commerce and deserves significant attention from pesticide enterprises. At present, with the supporting policies of the government and the popularization of mobile internet, there are increasing business relationships between large growers and specialized cooperatives. Growers’ demand for economical and efficient pesticides and the reduction of intermediate distribution channels by pesticide enterprises are creating opportunities for the development of pesticide e-commerce.

 

Pesticide enterprises are embracing e-commerce and are establishing e-commerce platforms. New platforms include the Rotam E-commerce established by Jiangsu Rotam Agrochemical Co., Ltd. and http://www.1 6899.com/, which is being developed by China Association of Pesticide Development & Application and 5 enterprises. Other enterprises such as Beijing Zhongbao Lunong Hi-tech Group Co., Ltd. and Jiangsu Kwin Group Co., Ltd. have opened flagship stores on Tmall and Alibaba. Additionally, Shenzhen Noposion Agrochemicals Co., Ltd. invested several hundred million yuan into establishing an O2O platform for agricultural produces. Some agricultural supplies dealers are selling pesticides from different manufacturers through e-commerce.


 


Lastly, environmental regulations and supervision have been strengthened and will focus on reducing the application of pesticides.

 

This requirement is aimed at reducing agricultural pollution. The government is supervising over the reduction of pesticide application and this stipulation within the document complements the Measures on the Recycling of Pesticides Package Waste.

 

It is worth mentioning that on 28 Jan., 2015, the Ministry of Agriculture of the People’s Republic of China (MOA) reviewed and passed the Action Plan for Zero Growth of Pesticides Application, which was the first specific document on reducing the application of pesticides by the MOA. This policy will restrain the expansion of the pesticide industry, speed up the adjustments to the structure of the pesticide industry, accelerate the elimination of highly toxic and high residue pesticides and encourage the innovation of low toxic and efficient pesticides and bio-pesticides.


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

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