Crop Protection Monthly by E-Mail
31 October 2003 - Issue No 167
"Click on the page number to reach the article"
BIG RESEARCH INITIATIVE TO UNDERPIN FUTURE OF UK AGRICULTURE 3
Prospects for the Pesticide Industry 5
Leading Crop Protection Companies in 2002 5
Industry still driven by new technology 6
Confidence in new chemistry 6
Better prospects for the medium term 6
A New Crop of Agrochemicals 7
Global Sales of Agrochemicals (US$ million) 7
Areas of chemistry to watch 7
Price pressures on suppliers 8
Perspective on Pesticide Task Forces 9
US situation 9
Contract is critical 9
Cost sharing 9
Funding and other issues 10
Task force operation 10
Cereal Production in the European Union 11
Flexibility over decoupling 11
Compromise agreement 12
Spotlight on BayWa 13
Expansion into Austria 13
Four core business sectors 13
Sector consolidation 13
Focus on cereals 14
Is Our Food Safe to Eat? 15
UK food safety 15
Public perception of risk 15
Pesticide regulation 15
Food poisoning 16
Natural pesticides 16
Organic food 16
Findings about acrylamide 16
Supermarket food safety 17
Incidence of food allergies 17
Safety from plough to plate 17
Pesticides in Baby Food 18
Baby Food Directive 18
Baby and infant vulnerability 18
Limitations of classical toxicology 18
Reducing late pesticide applications 18
Vitacress experiences 19
Perspectives from Boots 19
Organix approach 19
European News and Markets 20
FRESENIUS CONFERENCE 20
Austria - learning from the neighbours 20
MONSANTO TO MAKE CUTBACKS 20
European reorganisation 21
American News and Markets 22
US APPROVAL FOR ENVOKE 22
DOW SELLS PGR BUSINESS 22
DUPONT R&D CENTRE CENTENARY 22
GATES DONATION TO HARVESTPLUS 22
CONCERNS OVER EVOLVING US WEEDS 22
Glyphosate recommendations 22
Atrazine and glyphosate resistance 23
Other News and Markets 24
ATRAZINE GOES & PARAQUAT STAYS 24
FIRST FOR FLEXITY 24
THE CROP PROTECTION DIRECTORY 24
KWIZDA CELEBRATES 150 YEARS 24
AGRISEARCH DEVELOPMENTS 24
CPM AT GLASGOW 25
BIG RESEARCH INITIATIVE TO UNDERPIN FUTURE OF UK AGRICULTURE
The Rural Economy and Land Use research programme (RELU) was launched on 22 October in London to bring together the expertise of the UK’s natural and social scientists to develop practical, research-based solutions to help secure the future of the British countryside (www.esrc.ac.uk/relu). With an initial budget of £20.5 million (US$33 million) over three years, this radical programme is being funded jointly by the Biotechnology & Biological Sciences Research Council (BBSRC), the Economic & Social Research Council (ESRC), the Natural Environment Research Council (NERC) and the Scottish Executive Environment and Rural Affairs Department.
An even larger budget of £60 million was originally proposed, with less co-operation envisaged between the three research councils. However, the issues involved were regarded as too important to be studied in isolation by specialists and a condition of the funding will be that well considered, interdisciplinary projects are proposed. RELU has been planned to help ensure that the vision of the UK government's Rural White Paper, Our Countryside: The Future (‘a living, working, protected and vibrant countryside’) can be realised and sustained.
The RELU launch was somewhat overshadowed by the results of the UK government’s farm-scale evaluations of GM maize, sugar beet and oilseed rape, released on 16 October (www.defra.gov.uk/environment/gm/fse). The programme cost almost £6 million to implement and Dr Les Firbank, Head of Land Use section at the Centre for Ecology & Hydrology, told CPM that the study had been unique. The only other ones that remotely compare have been in the USA (researching Monarch butterflies) and Australia. The national press had a “field day” discussing the findings and CPM will have a report on them next month. The study raised as many questions as it answered, but will provide an invaluable database for researchers and help companies to refine and improve their herbicide programmes in crops to make them more environmentally acceptable.
Major challenges and change confront the countryside and rural economy in the UK and Europe. Fresh and fruitful ideas are needed to help smooth the way for some of the painful transitions and provide novel solutions. UK farm incomes, having risen steeply in the early 1990s, have fallen by 60% in the last five years. Many are leaving UK farming for good, disillusioned or forced out of business, despite £3,000 million per annum spent in subsidies.
The RELU programme should contribute to achieving a rural economy that meets social and economic objectives, with protection of the environment and a sustainable, competitive agriculture. The sociologist Professor Sir Howard Newby, Chair of the RELU Strategic Advisory Committee, readily acknowledges that effective interdisciplinary co-operation will be difficult to achieve. However, he feels it is essential to break out of the “scientific silos in which research has traditionally been undertaken” and that “analysis of social and economic behaviour moves to centre stage alongside research on ecology, biology and the natural environment”. One attendee suggested that if this had happened at the outset with GM crops, we might not be in the current predicament.
Professor Newby argued that no part of the academic community should be left out. It was stressed at the launch that the voice of the user of knowledge must have a proper say and that clear messages must come out of the programme for them. The first round of funding will be for projects targeting successful and sustainable food products and food chains. These could bringing ideas to a landscape scale and provide the knowledge and tools to underpin applied research.
A lot is expected from RELU, which makes Ian Crute, director of Rothamsted Research, somewhat nervous. Many of his scientists will be recipients of RELU funding, but much will be expected of them. Rothamsted Research is already developing new collaborations to underpin the work, including one with a leading university geography department. We will hear more of Dr Crute’s thoughts next month in his keynote speech at the BCPC Crop Science & Technology International Congress in Glasgow. The new venue and theme, replacing “Brighton“, marks a turning point for the crop protection industry in the quest to secure its own sustainable long-term future. There should be opportunities for the private sector to contribute to the RELU initiative. After all, when it comes to multi-disciplinary work, the private sector has a better record than the public sector.
Uncertain times lie ahead and in this edition Crop Protection Monthly has invited some outside experts to share their perspectives with our readers. We hope that you enjoy the “bumper” edition.
Prospects for the Pesticide Industry
Dr Matthew Phillips of UK analysts, Phillips McDougall (www.phillipsmcdougall.com), outlines some of the challenges facing pesticide companies, a subject which he reviewed in more detail at the recent PMFAI conference in New Delhi (September CPM).
Since 1996 the key influences causing a decline in the global agrochemical market have been the impact of GM crops, particularly in taking value out of the herbicide market; the impact of the GATT agreement that has reduced global agricultural commodity prices; economic weakness in developing markets, particularly Latin America and East Asia; and e-commerce, mostly in the USA, providing a new distribution route and generally lowering prices. The decline has prompted many companies to reassess their position in the industry, with some deciding to either divest or merge their agrochemical operations with other companies.
The industry is now dominated by six major multinational companies. With the exception of Japanese companies, only three further mid-sized businesses have any realistic new product R&D activity. The effect of product re-registration and an altered competitive environment following industry consolidation has resulted in many smaller companies addressing their strategic position in the marketplace.
Leading Crop Protection Companies in 2002
(by sales in US$ million)
Company / Pesticides / Seeds/Biotech / Total1 / Syngenta / 5,260 / 937 / 6,197
2 / Bayer* / 6,001 / 175 / 6,176
3 / Monsanto / 2,848 / 1,585 / 4,433
4 / DuPont / 1,793 / 2,016 / 3,809
5 / BASF / 2,795 / 0 / 2,795
6 / Dow / 2,525 / 192 / 2,717
7 / Sumitomo / 802 / 0 / 802
8 / MAI / 776 / 0 / 776
9 / FMC / 615 / 0 / 615
10 / Nufarm / 564 / 0 / 564
11 / Griffin / 352 / 0 / 352
12 / Kumiai / 324 / 0 / 324
13 / Cheminova / 284 / 0 / 284
14 / Ishihara / 280 / 0 / 280
15 / Hokko / 268 / 0 / 268
* proforma sales based on Aventis full year’s contribution
Industry still driven by new technology
The success of new active ingredients, particularly those that offer a new mode of action, demonstrates that industry remains driven by new technology. This is likely to be enhanced in the immediate future in the USA, EU and Japan as a result of the re-registration procedures that are ongoing in each of these regions. It is likely that many products based on older chemistries will be either removed or severely restricted. At present, the product sector most affected by re-registered procedures has been insecticides. As of December 2002 in the European Union, 194 active ingredients had either been refused re-registration or had not been supported through the system. Our analysis shows that these actives account for a sales total of US$825 million. Subtraction of the sales of the products where a direct substitute exists leaves a sales total of some USA$610 million, which is a potential market for replacement products.
Confidence in new chemistry
Except for Monsanto, which discontinued its pesticide discovery activities to focus on GM crops, the leading crop protection companies are still investing 8-11% of turnover in new product R&D.
Pesticide R&D Expenditure in 2002 in US$million
(excludes seeds and biotech R&D)
Company / R&D Spend / % SalesBayer CropScience / 665 / 11.1
Syngenta / 425 / 8.1
BASF / 270 / 9.7
Dow AgroSciences / 208 / 7.6
DuPont / 185 / 10.7
Sumitomo Chemical / 70 / 8.7
Although some of this expenditure is required to meet regulatory requirements to defend existing products, it suggests that the companies are still confident in the long-term value of new chemistry. Bayer and BASF both have seven new actives coming through to commercialisation, followed by Sumitomo Chemical (5), Dow AgroSciences (4) and Syngenta (3).
Better prospects for the medium term
There are signs that many of the factors that caused the average 3.0% per annum market downturn over the last five years are relenting. There is some reason to be more confident about market performance in 2003 and the near term. Economic recovery in Latin America, improving commodity prices, recovery from drought in parts of the world and the US New Farm Act will all help. However, a major negative factor remains the expected price decline for glyphosate in the USA now that all patents have expired. Our expectation is that the agrochemical market has the potential to return to growth approaching 1.1% p.a. in the period from 2003 through to 2007.
A New Crop of Agrochemicals
Dr Rob Bryant has been a consultant to the international fine chemical industry since 1987, following over ten years experience in process development and production. He set up Brychem in 1992 and in 1997 acquired the US publishing business, Ag Chem Information Services, relaunching its publications under the Agranova banner (www.agranova.co.uk). Dr Bryant gives an overview of new pesticide discoveries and opportunities.
Global sales of agrochemicals have shrunk in real terms over the past five years. In spite of this, agrochemical discovery groups continue to invent and develop new compounds at a more or less undiminished rate.
Global Sales of Agrochemicals (US$ million)
Year / Herbicides / Insecticides / Fungicides / Total1998 / 14,815 / 9,045 / 5,565 / 31,250
1999 / 14,175 / 8,675 / 5,415 / 30,070
2000 / 14,060 / 8,635 / 5,385 / 29,880
2001 / 13,015 / 8,085 / 5,000 / 27,780
2002 / 12,955 / 8,015 / 5,135 / 27,785
Source: Agranova Alliance/ Allan Woodburn Associates Ltd
Agranova has published profiles on new lead pesticide compounds since 1982. In its Ag Chem Supplementary Report, published in October 2003, some 72 new leads were noted. Of these, fungicides were most numerous (25), followed by insecticides (18), herbicides (16), acaricides (7), nematicides (2) and others (4). Structures for 29 of these new compounds were revealed, many demonstrating novel chemistry. The table below lists some of the more interesting introductions.
Areas of chemistry to watch
A number of 6- and 7-carbon ring diketones feature as promising actives. It is too early to publish information on a new Syngenta herbicide that also exhibits this structural feature, but it might be an area for chemical intermediate producers to watch. It is in their interest to be familiar with the technologies and chemistries that customers will expect them to operate when offered a “tech package” for contract manufacture, even more with custom synthesis services.
The challenge is to anticipate the needs of customers, many of which no longer believe in the partnership approach that had thrived in previous times. Recognising this need, Agranova has begun to analyse how new agrochemical compounds are likely to be made, so as to identify potential new intermediates at an early stage.
From an analysis of the process used to produce Bayer CropScience’s new whitefly insecticide, spiromesifen, it becomes clear that cyclopentane chemistry will be the important theme for compounds of this class. Opportunities for companies with expertise in this type of chemistry could emerge not only to supply Bayer, but also other companies developing analogous compounds.
Price pressures on suppliers
As innovative companies have come under increasing pressure to reduce costs, they have negotiated tougher contracts with suppliers. These tend to expect the type of risk-sharing that was previously rewarded by good margins, but now demand an “Asian level” of pricing. Indeed, one of the biggest companies has told its suppliers to relocate manufacturing operations to Asia or expect to lose business.