AIC may lose crops in case of conflict with pesticide suppliers

The agro-industrial complex (AIC) may lose up to 100% of its harvest in case of a conflict with foreign suppliers of pesticides, including China. Such a forecast is contained in the research of the company "Yakov and Partners", which studied the current situation and the future of the pesticide market in the Russian Federation. Izvestia has the document.

According to the results of the study "Agrochemistry of life: opportunities for development of production of pesticide active ingredients in Russia", about 250 types of plant protection chemicals (PPPC) are used in the Russian Federation, which play a key role in crop protection. However, almost all active ingredients (APIs) required for their production are purchased abroad, mainly in China. In Russia, only a few active ingredients, such as sulfur and copper, are produced. All production of DVs from the USSR times has ceased to exist or DVs are no longer used, experts note.

At the same time, the cost of fixed assets of Russian producers of chemical agents does not give grounds to assume that the investments already made allow to produce a noticeable range of DV in industrial quantities and with acceptable quality, analysts note. If there is an interest to develop their own production of DV in Russia, Russian producers of chemical agents will need financial support, an order of magnitude higher than the current value of assets, experts believe.

"Such a state of affairs creates a critical dependence of the Russian agro-industrial complex on imports and jeopardizes up to 100% of the harvest depending on the crop. Under such conditions, the country's food sovereignty is at risk, and the lack of local DV production makes the industry vulnerable to changes in the global market," explained Alexey Kletsko, director of Yakov & Partners.

According to experts' estimates, in Russia the consumption of CPS has grown by 60% over the last six years, and the industry shows significant potential for further development. With the current size of arable land on the basis of global benchmarks, taking into account regional specifics, we can expect growth in pesticide consumption up to 360 thousand tons annually by 2030. Moreover, in the long term, this figure may reach 700 thousand tons per year, according to the results of the study by Yakov & Partners. For comparison: at the end of 2023, the consumption of CPS in Russia amounted to 240 thousand tons.

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At the same time, the departure of large international companies such as FMC and Corteva, as well as the reduction of investment in business development by BASF, Bayer and Syngenta created additional difficulties for the Russian agricultural industry. This has led to limited access to modern drugs and quality generics, as well as to a decrease in the level of implementation of the world's best practices in agronomy, experts believe.

Under these conditions, according to experts, it is critical for the Russian agro-industrial complex to form its own pool of DV production capacities. To further develop the industry and reduce dependence on imports, experts suggest creating a cluster for the production of about 40 critically important DVs, which will ensure the loss of no more than 25% of the wheat, potato and sugar beet harvest in the worst case. The approximate cost of creating such a cluster is estimated at $5-10 bln with payback within 10-20 years, experts of Yakov & Partners estimated.

Until the moment of the project realization, according to experts' estimates, the policy of diversification of DV supplies from countries with different geopolitical agenda should be applied. As the development of partnership with foreign companies, experts believe, will allow to expand technological capabilities, the state support of manufacturers creating logistics and production facilities abroad will obviously contribute to the development of the industry. At the same time, as experts note, it is worth avoiding the introduction of restrictions on imports of DV in the absence of local analogs, so as not to worsen the financial and economic situation of agrarians.

"The Russian market of chemical pesticides is at a turning point. On the one hand, there are all prerequisites for the growth of pesticide consumption and development of domestic production.

On the other hand, there is a need for significant investment in the creation of its own DV base and overcoming dependence on imports. Subject to government support and competent development strategy, Russia can achieve technological sovereignty in the agrochemical industry in the medium term," concluded Stanislav Vetoshkin, an expert at Yakov & Partners.

Earlier, on February 3, it was reported that due to the abnormally warm winter in Russia expect a 30-50% increase in agricultural pests, plant diseases and weeds, which may pose a threat to the new crop. In addition, in 21 regions of Russia this year is expected locust invasion due to the warm winter period, which is 1.5 times more than in 2024.