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Generic scheme will have a negative impact on country's economy.

Generic Scheme will have a negative Impact on Country's Economy

Q. What is the per-hectare consumption of pesticides. Are you satisfied with the present level of consumption.

A. It is difficult to answer quantity-wise per-hectare consumption of pesticides because it differs from crop to crop. However, the coverage-wise consumption of a particular crop can be determined. The per-hectare consumption varies according to dose rate of various pesticides. However, we are not satisfied with the overall level of consumption. The major stumbling block in way is the illiteracy. Some progressive farmers are taking measures to improve yield through the available resources. It is difficult to educate million of farmers because of our own constraints. However, with the passage of time awareness among farmers could be created through education and training.

As far as the total cultivated agricultural area in Pakistan is concerned the existing usage of pesticides appears very low. By and large we cover the whole country geographically but the coverage in NWFP and Balochistan is too low. Balochistan, because of its largest area, is difficult to be covered under existing conditions.

Crop-wise coverage is also not satisfied. Whatever, the coverage is provided to the cotton is not given to other crops like: rice, sugarcane, wheat etc. because of our own handicaps. We have been working on cotton over a decade. The actual work on wheat started about three years back. However, the coverage in other areas is improving and tangible improvement is likely within three years.

Q. What measures have your Association taken to induce usage of pesticides by the farmers.

A. Communication is the main challenge in way to induce the awareness of pesticides, the education level of our farmers is variable. The message is communicated through two channels one is the mass media i.e. Radio & TV which has an effective reach. We sponsor programmes on the media to educate farmers. But the detailed message cannot be conveyed through Radio and TV. For that purpose almost all companies engage a large number of field staff, ranging from 30 to 70. This field staff is equipped with all necessities. They hold farmer gatherings, demonstrate experiments and discuss all practical aspects which are likely to be encountered during a particular crop session. The number of such farmer gatherings reaches over ten thousand a year. ICI alone holds atleast 1400 farmer gatherings per annum. So there are so many companies of PAPA and almost each of them holds such gatherings. If a gathering attracts 30 to 40 farmers it is considered to be a big achievement. The field work is our major source to develop awareness of a particular product and the farmer gathering is the primary source besides our demonstrations of the product which make the farmers believe its effectiveness and practical benefits.

Q. Do you, think that pesticides offer health hazards.

A. Pesticides are toxic products which are to be used according to the manufacturers instructions. Pesticides may have environmental or safety hazards if not used correctly. But the companies are very careful and conscious about it. With God's blessings no major catastrophe or hazard occurred in Pakistan because of our education through farmer gatherings. Indiscriminate usage of pesticides is dangerous. If a pesticide meant for cotton, is wrongly applied on vegetable it could naturally create health hazards. Because of the Research and Development facilities and continuous monitoring, the chances of untoward incidents have been minimised and we are making further efforts in this area.

Q. What is the local formulation capacity of the country and what are the problems of local pesticide formulation industry.

A. Most of the country's demand is now being met through local formulation. All major products are being formulated within the country except some small products having specialised procedure of formulation. By the end of the year we would be in a position to cater 70 per cent demand of the market locally. Local formulation industry is not faced with any major problem except some constraints which relate to development and improvement of formulations. The worldwide trend is that formulations need continuous improvement and safening. The restriction in our country is the two years trial period of a product if a formulation is improved. And during that period the sale of that product can be stopped because of deregistration. So the companies are finding it difficult to develop and further improve their products and as such, no improvement in formulation is witnessed. So it is suggested that safening and improvement should not require to undergo a trial period of two years as being done in the other countries. Secondly the procedure of raw material imports and simplication. And Registration process should also be simplified. The Government should give heed to these problems.

Q. What new formulation projects are coming in next two years.

A. This year two new projects have been completed, one by ICI and the other by UDL and FMC. The third project which is likely to be commissioned by next year is of Rhone Poulenc (May & Baker) to formulate pesticide locally. It is quite a substantial project. The firm may have delayed it earlier because of the uncertain market conditions. The project, if commissioned, would enhance formulation capacity of the

Table : EVOLUTION OF PESTICIDE PRICES FOR 1 LTR PACKS IN CURRENCY OF COUNTRY OF ORIGIN (1985=100) Q. Would you favour the manufacturing of basic pesticides in Pakistan.

A. Basic manufacturing has two major snags. Firstly the market is relatively small (except for three or four products which are widely used) and the business is new and the companies are in developing stage. No company has such a big product which could have a viable, internationally sized marketshare in Pakistan. As such there is a rare possibility of a major project. On the other hand any small scale project is uneconomical. Secondly the scarcity of raw material and intermediated, needed for basic manufacturing, is also a great handicap. It would take at least two to three years to set up any project based on intermediates and then further 5 to 6 years are needed to develop basic manufacturing in the country. This is a gradual process and one cannot rush for it. We should first develop the market before going for basic manufacturing. [Tabular Data Omitted]

Q. Why do you oppose Generic Scheme. What will be its impact on national economy and environment.

A. The Generic Scheme is likely to have a major negative impact on country's economy. The privatisation of the pesticides trade since 1980 has led to a sustained growth in the use of plant protection products, particularly for Cotton. This increased usage has had a direct and positive correlation with increased Cotton production, particularly in Punjab. It may be mentioned that this development took place in compliance with the Agricultural Pesticides Ordinance which stipulates that pesticides registered for use shall be branded by suppliers, and sold responsibly under various guidelines. The proposed introduction of a generic scheme poses a number of potential risks to farmers, the environment and to the country's economy. The generic scheme would be a loophole in the system, creating a pole of attraction for substandard products. Competition on a generic basis will inevitably cause reduction in field work and extension services. As a result, small farmers in particular will be deprived of information and support which is vital for them in order to improve their agricultural production. In fact, only a few of the bigger growers will potentially benefit from the Generic Scheme, and that too only for a short time.

The introduction of unequal competition, will deter established companies from making further investments in Pakistan for: (i) local formulation, (ii) safe warehousing and storage; (iii) measures to counteract counterfeiting and adulterations; (iv) training of technical staff and their deployment; (v) introduction of new technology (herbicides, insect growth regulator, IPM), and (vi) basic manufacturing.

Q. Do you think that Generic Scheme will reduce Import Bill.

A. The economic advantage from marginally reducing the pesticides import bill through the generic scheme is far outweighed by the risks such a scheme poses to the country's agricultural production, particularly to the Cotton crop. The annual import cost of Agricultural Pesticides at approximately US$ 100 million per annum represents less than 10 per cent of the value of the Cotton crop alone (US$ 2.40 billion per annum at 72 cents a lb. of Cotton). Even if it is assumed that the proposed generic scheme would reduce the Pesticides import bill by as much as 15 per cent per year, it amounts to a saving of only US$ 15 million. As opposed to this, just a 5 per cent fall in the size of the Cotton crop would amount to a loss of approximately US$ 120 million per year, and would be severely damaging to the national economy.

Q. What are your suggestions to reduce pesticide prices.

A. Keeping in view the Government's objective of reducing Pesticide prices, we suggest the following measures as alternatives: 1) Pesticides be exempted from Import License and Iqra Surcharges 2) Competition be increased by allowing registration of more than one brand from each source, preferably sources that conduct research and development and invest in support of their branded products.

Q. How do you foresee the investment climate in Pakistan.

A. The investment climate in Pakistan, except for the last two to three years, remained quite conducive. The climate has the potentials of being conducive provided the government allows positive competition. The pesticides industry has grown rapidly with a rate of 20 per cent per annum. This is a very good growth rate. In such an environment market forces naturally bring more investment. The slowdown in the market in last 1-1/2 year is because of the uncertainty caused by the Generic Scheme. Government should avoid adopting policies which could retard the investment climate.

Q. What is the price comparison of Pesticide in 1991 with that of preceding year. What is the impact of rupee depreciation on the pesticide prices?

A. It is alleged that registered pesticides are expensive and that the prices are increasing every year. However, if one were to look at the import prices, in terms of the currency of country of the origin, one would observe that they have ben actually going down. This can be seen in the graphs. Heavy competition amongst branded registered pesticides has, in fact, resulted in lowering of C&F prices. Even in rupee terms, the increase in pesticides prices has been less that the increase in the cost of other agricultural inputs e.g. fertiliser. [Tabular Data Omitted]
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Title Annotation:interview with Salman Burney on pesticides industry in Pakistan
Author:Raza, Moosi
Publication:Economic Review
Article Type:interview
Date:Jul 1, 1991
Previous Article:Cultivation and utilisation of mango in the Sultanate of Oman.
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