The government recently made a bold decision to allow online sales of insecticides.

This decision harnessing the benefits of digitalisation in agriculture would perhaps inspire policymakers’ confidence in zeroing in on priorities in agri-policymaking — productivity, food security, or sustainability.

What impact will online pesticide sales have on the food ecology, farmers, and pesticide manufacturing firms? Will e-marketplace-driven pesticide sales jeopardise the natural farming objective for 7.5 lakh farmers? Will the commercial motive of agrochemical firms subside the organic farming landscape?

The pesticide market in India is expected to touch ₹316 billion in 2024, growing at 8.1 per cent a year between 2019 and 2024. Its consumption per hectare is reported at 0.25 kg, and insecticides among fungicides and herbicides account for a maximum market share with 292 registered pesticides.

There is a silver lining: chemical pesticide consumption growth has contracted (-0.6 per cent), while bio-pesticide consumption grew 6.12 per cent a year between 2016-17 and 2020-21. However, bio-pesticide consumption accounts for 8-11 per cent of India’s total pesticide consumption during the reported periods (see Chart).

The consequences

The government’s decision has some positives. Farmer producer organisations (FPOs) through online buying can cut transaction cost and share their feedback to improve user experience with the multi-stored brands and compare the price points of available pesticide brands. As a result, spurious or fake pesticide sales will be arrested significantly.

Agri-tech start-ups and pesticide firms can strengthen their upstream marketplace model by leveraging digital platforms’ direct and indirect network effects. Investors may be attracted to invest in new pesticide technical, and agrochemical firms can take the IPO route to mop up funds.

However, there are some pitfalls. First, online pesticide sales can impact bio-pesticide consumption as chemical pesticides produce “quick results” for farmers. About one-third of agricultural products depend on the application of pesticides. Studies have shown that there would be a 78 per cent loss of fruit output, 54 per cent loss of vegetable and 32 per cent loss of cereal production.

Despite short-term productivity gains, the toxicity associated with applying “excessive” dosage harms the soil, water, air, flora, fauna, and so on. For example, pesticide residues accumulate in the plant, enter the soil, and contaminate groundwater due to leaching, vaporisation, and spray drifts. These particles make the air toxic and enter the food chains, posing a threat to consumers.

Second, the Insecticides Act 1968 and Insecticides Rules 1971 regulate the end-to-end supply chain of insecticides (pesticides) to prevent hazards and exposure, including human and animal lives. However, this legislation does not have adequate regulatory provisions to avoid deaths, minimise farm workers’ health hazards, or prevent environmental and food contamination. There is no mechanism for periodic checks on the registered pesticides as per toxicology guidelines.

Third, e-marketplace-driven pesticide sales would increase the tolerance of maximum residue limits supported by a cartel of technology and pesticide manufacturing firms in an oligopolistic agrochemicals market. A participatory guarantee system may be ineffective in recognising contaminated food products without a robust traceability system.

Policy suggestions

First, agri-policies should consider ESG dimensions embracing circular initiatives in food and biomass. For this, the Pesticide Management Bill 2020 should be implemented to address the existing shortcomings of existing laws concerning pesticide registration, worker and end users’ protection, and immunity to pesticide business and promotion.

As the Bill emphasised banning extremely and highly hazardous, especially Class 1a & 1b chemical pesticides, the government should promote non-hazardous formulations of pesticides. It is worth noting that the Ministry of Agriculture and Farmers’ Welfare banned 18 pesticides following Verma Committee’s recommendation in 2018. However, two heavily used Class 1 pesticides, Monocrotophos and Carbofuram, are yet to be banned. Also, the pesticide industry should follow a responsible business protocol by examining the long-term impact of active ingredients of pesticides on the environment.

Second, social and economic dimensions are also key to sustainability. The government can broaden and deepen integrated pest and weed management technologies and practices in line with the national mission on natural farming.

States can augment the sales of bio-pesticide and plant growth regulators for organic farming, extend grants and concessional loans to MSMEs and cooperatives/producer companies, and agri-business incubators for innovative circular initiatives in agri-risk management, and promote evidence-based research on pesticides impact on farming communities and public health, nutrition.

In sum, ICAR-funded agri-research institutions need to provide an enabling environment for scientists or researchers to invent and register patents of products enabling climate-smart sustainable farming. Demonstrating their efficacy in the farmer field is critical for farmer adoption and scaling up the commercialisation of such technologies and products.

Dey is faculty member of Agribusiness Management, and Tripathi is an EFPM Scholar, IIM Lucknow. Views are personal