Executive Summary
Both pesticides and fertilizers remain essential to modern agriculture.
Having helped farming in the EC to become self-sufficient, both industries have
become victims of their own success.
In order to cut back on excessive production, the Common Agricultural Policy
has introduced the `set-aside' of 15% of arable land, which has led to a
subsequent fall in demand for the products of the crop protection industry and
fertilizer manufacture.
As well as farming, the industry is looking to expand other markets. These
include forestry, local authorities, highway authorities, industry based in
greenfield sites and gardening. As yet these are small but growing.
The industry has suffered a turbulent recent history as it has adjusted to the
demand for lower levels of active ingredients in farming. Research and
development has resulted in a 25% reduction in the amount of chemicals used in
the last ten years.
The industry has been hit by low cost imports of fertilizers from Eastern
Europe. Research is less prominent than in pesticide development, but still has
a part to play as optimum levels of application are sought out.
The UK and Western European markets will contract further in the short and
medium term. Some companies are likely to pull out of the industry or become
part of a merger or takeover. Elsewhere in the world demand in the long term
looks set to improve and those companies which survive the next five years look
to have an assured future.
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