| KN24003 |
| KEY NOTE AGROCHEMICALS AND FERTILISERS AUGUST 1993 |
| Overview |

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.
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.
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 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.
Text © 1993 Key Note
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Last updated by Duncan Nottage 5th March 1999