4.2.6.1 The pesticide market in Thailand

Before the 1980s, agricultural productivity and growth of crop output were mainly based on increasing the land area under cultivation, rather than on yield improvements. Since the 1980s, yield improvements have become instrumental to the maintenance of agricultural output levels. The first measure required for yield increases was the minimisation of crop losses due to pest infestation (ADB 1987, cited by Ruhs et al. 1999). Since then, crop protection has become a major concern of farmers and scientists in Thailand.

Thailand's pesticide market can be classified as liberal. Import and sale of pesticides are handled by the private sector. The main objective in using pesticides is to improve the productivity and/or to reduce the production risk at the farm level. Driving forces for the increasing use of pesticides in Thailand (see Table 2.15) include limited land resources, improvement of crop productivity, growing high value crops, inefficient use of pesticides¹⁵, easy access to pesticides, and institutional factors, etc. The latter include direct subsidies or taxes, indirect subsidies, interventions in input and the commodity market, and research, education and extension systems (Pincus et al. 1999).

¹⁵ Information on synthetic pesticides use was mainly obtained from the private companies which produce, import and sell them. The quality of the products is often not as specified on the label, which might lead to misuse or inefficient use of the pesticides.

On the other hand, the indiscriminate use of pesticides has incurred external costs such as those to the environment, and the health of producers and consumers, etc. Jungbluth (1996) studied the guidelines of a pesticide policy in Thailand and quantified the major externalities relating to pesticide use. The calculations showed that the ratio of pesticide sales to externalities is almost one to one.

The main group of pesticides used in Thailand is insecticides. The use of insecticides almost doubled from 1981 to 1990 (see Table 40). This indicates intensification in Thai agricultural production. Most of the insecticides consumed are imported.

Table 40: Domestic consumption of insecticides and imported quantities in Thailand 1981-1998

Note: During 1981-1991 the amount of insecticides consumed was recorded as formulated products; during 1993-1996 the amount of insecticides consumed was recorded as active ingredients and the amount of insecticides imported was recorded as formulated products; NA = not available.

Source: Pesticides Statistics, Regulatory Division, Department of Agriculture

The amount of insecticides imported has increased moderately. In 1998 the top ten pesticides made up almost 90% of total imports. This indicates that the markets concentrate on a few insecticides. Imported insecticides can be either formulated products or active ingredients that are then formulated within the country.

One problem associated with pesticide production is the insufficient quality of the products (Tayaputch 1992, Grandstaff 1992 cited by Jungbluth 1996). The pesticide market in Thailand is a product differentiation market, which means a single active ingredient can be found in various products with different registered names. This makes it very difficult for the Designated National Authorities to control the market and enforce the pesticide regulations.

The liberal market encourages competition between pesticide companies. They try to undersell each other, which in turn is driving market prices down (see Table 41) (see Ruhs et al. 1999). In addition, factors affecting prices of pesticides include low input costs and external factors such as government tax policy.

Table 41: Real average price of 18 selected pesticides in per cent in 1986-1996

Source: Ruhs et al. 1999

Thirty-seven pesticide companies are large-scale producers belonging to the Thai Crop Protection Association. The main segments in the pesticide market are covered by international companies.

The remaining companies are small to medium-scale producers, only some of whom belong to the Local Thai Association of Pesticides, which currently has 46 members.

Another group of insecticides are derived from plants or other organisms, and are imported to Thailand, but are of quite low quantity and value. There are about three or four types, namely Bacillus thuringiensis (78,337 kg, 51,229,366 baht in 1997), Nuclear Polyhedrosis Virus (NPV¹⁶), neem extract (trade name is AZA¹⁷, azadirachtin 3% EC), and Rotenone (imported 3,000 kg, 83,602 baht in 1997).

¹⁶ There is no record of this at the Regulatory Division.

¹⁷ There is no record of this at the Regulatory Division; the amount imported is assumed to be insignificant. Moreover, it is not possible to get information from the company that imports this product. All that is known is the trade name and the fact that it comes from India.

The largest amounts of pesticides are applied in the horticultural (tropical fruits and vegetables) and rice sectors, for example high value crops which rely on pesticides, such as fruit trees, vegetables, cotton, sugarcane, and so on. It is, however, difficult to obtain detailed information on the quantities applied on each crop.