Rise in Agrochemical Cost is Alarming for Farmers
CropLife India is stunned by the proposed increase in customs duty on agrochemical formulations to 20%. The association believes this move will negatively impact farmers by raising farming costs and limiting access to newer products.
The idea of doubling customs duty is based on the misconception that there is a significant import of formulations, says the association. However, actual import data tells a different story.
Mr. Durgesh Chandra, Secretary General of CropLife India, stated: “Imported formulations barely make up 20% of the total agrochemical imports in India. Increasing customs duty on these formulations will set a negative precedent, create uncertainty in the ease of doing business, question the stability of Indian policies, and send wrong signals to both foreign and Indian investors. This move won’t bring any significant financial benefit to the exchequer.”
Protecting Indian Agriculture
Historically, new technologies and innovations have entered India through the import of technical or formulated products. Once adopted by farmers, local manufacturing begins, supporting the ‘Make in India’ initiative. However, the proposed additional customs duty will generate minimal revenue for the government while potentially damaging the long-term sustainability of crop protection in the country.
These formulations are unique, science-based innovations. Discouraging their use through tariffs or non-tariff barriers will limit farmers’ choices to older chemicals, portraying India as an unfavourable investment destination due to an arbitrary policy.
Mr. Chandra added: “While our industry fully supports ‘Make in India,’ it should not come at the expense of our nation’s farmers and their ability to produce food and compete globally.”
Crop protection products are like medicine for crops, shielding them from pests, diseases, and weeds, which pose risks of 15-20%. Farmers invest significantly in seeds, fertilizers, water, and labour to cultivate their crops, with agrochemicals acting as insurance. Indian farmers need new molecules due to changing cropping patterns and agro-climatic conditions, making it essential to have a broader range of products.
Most imported agrochemical formulations are based on newer, safer, and more effective chemistries. These provide farmers with better options for combating pests and diseases. Such formulations offer better sustainability, pesticide resistance management, and favourable toxicity, environmental fate, and user safety. Taxing them at higher rates will discourage the introduction of newer chemistries, depriving farmers of viable new options.
Wider Implications and Industry Reactions: Agrochemical
The proposed increase in customs duty is part of a broader strategy aimed at boosting domestic manufacturing under the ‘Atmanirbhar Bharat’ (self-reliant India) initiative. While this policy aims to reduce dependency on imports and strengthen local industries, critics argue that it may have unintended consequences for the agricultural sector.
Farmers’ associations across the country have expressed concerns over the potential rise in input costs. They argue that the increase in customs duty will make high-quality agrochemical products more expensive, thereby affecting crop yields and profitability.
Furthermore, industry experts warn that the higher costs of imported formulations could lead to increased prices for end consumers, potentially impacting food security. They emphasize the need for a balanced approach that supports domestic production without compromising the availability and affordability of advanced agrochemical products.
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