The agricultural microbials market was valued at USD 2.74 billion in 2016, and is projected to reach USD 6.01 billion by 2022, at a CAGR of 14.21% during the forecast period. The market is primarily driven by biopesticides, due to the wide-scale consumption of crop protection solutions across the globe and the growth in the cultivation of industrial crops such as corn, soybean, wheat, and rice.
Rise in adoption of integrated pest management (IPM) practices across the globe
Over the last five decades, IPM has become the recognized strategy for crop protection, globally. IPM involves effectual control of pests through several compatible, integrated, cost-effective, and eco-friendly methods. It is considered a principal component of sustainable agricultural practices. The biological method of pest control is an important component of IPM. Biopesticides reduce the usage of conventional pesticides, while at the same time promote higher crop yield with effective pest control. It is an essential component in the production of various greenhouse crops. The market share earlier held by synthetic crop protection is gradually being replaced by biopesticides, which contribute to the growth of this market.
The continuous and extensive use of modern crop protection products to eradicate or reduce pest infestation and the loss caused by them has led to the development of resistance to the effect of crop protection products among pests. This resistance can be classified as metabolic resistance, target-site resistance, penetration resistance, and behavioral resistance. Biopesticides, mostly microbial pesticides, are used as an effective tool in IPM programs for management of pest resistance to conventional chemical pesticides.
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Microbial pesticides also reduce environmental and worker exposure to synthetic pesticides. Nematode pest management, through the usage of microbial agents, is being recognized as a promising area in the current scenario of IPM practices. The renewed emphasis on IPM as a component of agricultural policy in regions such as Europe has also led to changes in the way biopesticides are regulated.
Why the growth of the unorganized markets in developing countries are posing significant challenges for the growth of the agricultural microbials market?
The market for agricultural microbials is unorganized, which results in the unavailability of products throughout the year in several regions, particularly developing countries. The market for counterfeit products has surged due to this information asymmetry and demand-supply mismatch. This is hindering the growth of the agricultural microbials market since the counterfeit products are of poor quality and render below-average performance, which results in farmers being apprehensive about the efficiency of microbial pesticides when compared to conventional chemical pesticides. The biopesticides sold in emerging markets are sometimes contaminated and have a poor microorganism count, which leads to poor and uneven performance. This leads to a decline in the overall demand for agricultural microbials.
The prices of these products are not uniform around the world. Thus, in the absence of floor prices and ceiling prices, farmers may end up paying more. There is limited awareness about brands as the market is highly fragmented at the regional level. Thus, from awareness about the product to the brand, farmers have little to no knowledge or misconceptions about microbial products, which affect the market negatively.
North America is estimated to account for the largest market share in 2017, while Europe is projected to be fastest-growing in the agricultural microbials market over the next five years. Agricultural microbials are expected to be a potential substitute for synthetic pesticides in Europe, due to the growing regulations on chemical usage and maximum residue limit. The ban on the use of neonicotinoids, glyphosate, and paraquat is expected to drive the growth of the European agricultural microbials industry.
The major factors restraining the growth of agricultural microbials are the shorter shelf life, field persistence, and storage conditions of microbial pesticides. Microbial solutions have a shorter shelf life of 6–24 months in comparison to conventional pesticides, which can last for 2–4 years.
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The global market for agricultural microbials is dominated by large players such as BASF (Germany), Bayer (Germany), Monsanto BioAg (US), BioWorks (US), DowDuPont (US), Syngenta (Switzerland), and Certis (US). Some emerging players in the global market include Marrone Bio Innovations (US), Koppert (Netherlands), Arysta LifeScience (US), Valent BioSciences (US), and Isagro (Italy).