Global agriculture faces new challenges
The growing and worrying development of counterfeit Agrochemicals tends to hold back the worldwide agricultural transition. Fighting against counterfeiting in Agrochemicals industry is preserving and protecting the agriculture of tomorrow. (Click here to know more about the issues facing global agriculture)
In addition, agriculture (40% of the worldwide workforce) will have to face many challenges to feed an increasingly populated planet. With an estimated population of 9 billion people in 2050, farmers will have to solve the following paradox: produce more with less cultivable lands. The question of productivity is crucial. Indeed, some years ago, one hectare of land fed 4 people, nowadays this same surface has to deliver enough food for 5 human beings.
Besides, farmers will have to produce efficiently by limiting the following risks:
- Climate change: Flooding, drought, new disease, insects developing resistance against chemical products… (30% of the global production would be lost due to pathogen plants, insects, diseases).
- Water shortage: lack of water will impact 50% of the world population by 2030.
- Undernutrition: Currently 795 million people suffer from undernutrition in the world (whereas 1.9 billion of human beings suffer from obesity).
- Overpopulation: In order to feed a planet of 9 billion, farmers will have to increase production by 70% with less cultivable lands.
- Soil and lands depletion : 40% of current global farmland won’t be arable anymore by 2050 due to depletion and drought.
Consequently, Agrochemicals market players have a crucial role to address issues mentioned above. Indeed, the question of productivity and growth production might be solved by science progress with efficient chemicals and resistant seeds.
Agrochemicals Industry: A segment heavily impacted by counterfeiting
This market is largely affected by counterfeiting. Thus, as per a study conducted by Europol, about 15% of Agrochemical products sold in the world would be counterfeit.
Every segment of the Agrochemicals industry is affected:
Manufacturers / Producers:
- Pesticides, insecticides, herbicides producers: In Europe, counterfeiting in this industry causes a loss of revenue estimated between € 360 million and € 510 million a year. Indeed, the European counterfeit rate would be around 5-7%. In comparison, this rate would reach 20-30% in China. Other example, in India, business loss for agochemicals companies, due to counterfeiting, would be $ 2 billion a year.
- Seeds producers: They are also impacted by counterfeiting, thus 15% of seeds sold in Africa would be fake.
- Fertilizers: Fertilizers manufacturers are also affected by this scourge, especially in emerging regions. Thus, some experts underline 2/3 of potash fertilizers sold in Africa would be counterfeit.
- Using counterfeit Agrochemicals has severe and direct impacts on production quality, output and consequently on farmers’ revenues. In addition, counterfeit seeds would divide the crop yield by 2 as per a recent study. Each year in India, spreading of fake fertilizer would generate a revenue loss of € 1.3 billion. Overall, the use of fake products generate lands depletion, compromises crop yield and threaten farmers’ health.
- Consumers are also affected by these frauds. Indeed, there is a risk of food contamination linked to untested chemical substances contained in fake products.
The main types of counterfeit Agrochemicals
Brands have to face inventive counterfeiters. It might be difficult for consumers or even brand experts to distinguish fake frome genuine.
Here are the main types of frauds observed in this market segment
Pesticides / Herbicides / Insecticides:
- Reuse of labels
- Reuse of genuine bottles / containers
- Copy of labels
- Diluted product
- Mix betweend fake and authentic seeds
- Copy of labels
- Fertilizers diluted with other substances such as ashes
- Altered product
How to tackle counterfeit Agrochemicals?
Before implementing security features, each brand needs to ask itself the following questions:
- Where does the fraud come from?
It is not easy for a brand to locate the defective segment of its supply chain. Using brand experts within the distribution chain or online brand protection may help brands to locate the geographic area and unscrupulous partners.
- What kind of frauds does the brand face?
It is crucial for Brands to determine the type of fraud they face in order to set-up a proper and adequate solution.
- What is the targeted audience? (Consumers, brand experts, distributors)
There are several options for brands. On the one hand, they may set up a “confidential” solution only dedicated to few people such as brand experts. On the other hand, they may include consumers/farmers in the authentication process. This last option is a current trend, some top Agrochemicals producers launched their own Smartphone application to allow farmers to authenticate genuine products. Authentication by end-user is also well-implanted in Africa, where counterfeiting scourge has severe impacts on crop yield.
- What is the product “value”?
Some products may have a strategic positioning within brands portfolio, due to their volume, targeted market, patents or licenses. As for example, patented products required more than 5 years of Research & Development, they consequently are key products.
Arjo Solutions’ approach to fight counterfeit Agrochemicals
In order to see clearer in our solutions’ portfolio dedicated to Agrochemicals, we may segment it as per 2 criteria : The confidentiality level required by the brand (a solution targeting consumers or brand experts ?) and the product’s value.