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Significant changes ahead for new regulations on China's pesticides


China’s government has passed the New Regulations on Pesticide Administration in China on April 1. The new regulations, which will be the strictest ones in the history of China, will come into effect on June 1, 2017. China responds with this new law to the high amount of illegal activities in the country and enhance safety and security for manufacturers, traders, farmers, and finally also the consumers of China’s crops. 


One of the main effects of the new regulation, according to market intelligence firm CCM, is a change in the number of registrations, because the process has been improved, as well as changed conditions in the development of new active ingredients and types of pesticide formulation. Specific information about this can be found in the Report Analysis of the New Regulations on Pesticide Administration in China Edition (1). 


The new revision makes significant changes on China’s pesticides management and registration systems, as well as various administrative measures. Pesticide distributors as well as manufacturers will be licensed through the policy and both enterprise types will be responsible for any safety issues that are regarding their pesticide products. Those producers, which are currently manufacturing and selling fake pesticides will have to face high penalties in the new regulations, when they don’t adjust the production. Other changes include the phase out of the temporary registration.


One of the biggest changes is the improvement of the pesticide registration system. The temporary regulation will be completely cancelled in the new regulations, while the requirements are more easily understandable. 


Furthermore, the management of pesticides, especially regarding the quality and safety, will be enhanced. This includes the implementation of systems that can track and record raw material imports as well as the sales of pesticide products. 


More organisations in China are required to provide a technical assistant for pesticide users and supervision of the right use of pesticides will be increased. 


Finally, the relevant departments in the agricultural sectors will get defined responsibilities for the supervision of harmful and hazardous pesticides with the right to ban and restrict them in the case of any violation.


The overall structure did not change at all. The old version, as well as the new version, consists of 8 chapters. Here, two chapters are in the main focus of the changes, namely the chapter of Supervision and Management, and Legal Liability. 


The new regulations will inevitably have a significant effect on the registration costs of new pesticides, as described in the report. This is due, because one of the three steps in pesticides registration is getting eliminated, namely the temporary registration. However, the changing costs come together with an enhanced effectiveness and safety of pesticides in China, which will improve China’s pesticide industry in general. 


The administration process is going to be streamlined because the responsibility goes only to the MOA, instead of several ministries. 


Since licenses for every pesticide producer is required, the shutdown of unqualified manufacturers is likely to change the supply situation in China. 


The new regulations also change the recall system of pesticides in China, which especially trader and manufacturer should keep an eye on since additional costs are likely to arise. 


As mentioned before, the supervision and legal liability of manufacturers and traders are going to be stricter with the new regulations, which aims to create a healthier market and competition, with higher penalties for noncompliance and misleading activities. 


Other factors that need to be considered under the new regulation are the packaging costs, as described in the report.


The influences on different players in China’s pesticide market: 


Registration

The number of pesticide registrations in China, both technical and formulations, has been increasing steadily from 2010 to 2015, but fell down in 2016. Now with the new regulations from June 2017 on, the number is very likely to change again, because the temporary registration in the process is being eliminated, therefore any manufacturers, importers and distributors are required to register their pesticides formally. 


Influence on Producers


It is no secret that China is one of the largest pesticide producers worldwide. The focus of pesticides manufacturers lays in processing formulations. More than 70% of enterprises in the pesticides business are formulations producers. 


However, the pesticide industry in China is marked by a large number of small-size manufacturers with a significantly low concentration ratio, compared to pesticides industries overseas. 


The new regulations are aiming to concentrate the industry ratio of pesticides in China more and improve supervision as well as the development of new pesticides. For example, the requirements for getting pesticide licensed will be simplified and reduced. The exact requirements are discussed in the report. All pesticide labels must also be approved by the MOA. 


Influence on Dealers

Of course, the rules for dealers regarding the pesticide management will also change in the new version of regulations. Stricter governmental observation and high penalties for selling fake and inferior pesticides are going to clear the market from swindler. To keep everyone on the same page, we will have a look at the definition of fake and inferior pesticides as defined in the law.


As revealed in random check results of past years released by the Ministry of Agriculture of the People's Republic of China, counterfeit and inferior pesticide circulated much in Chinese market. In 2016, MOA conducted two random checks into vegetables, fruit trees, tea trees, paddy, wheat, corn, cotton, soybean for pesticide usage, which turned out to be not optimistic enough. 


Influence on foreign enterprises

Foreign enterprises which are dealing with pesticides in China will face different requirements as well. The new regulations have an effect on the actual Sales in China, but also impact exports and even processing and repackaging. Companies are urged to inform about all new and stricter requirements under the new regulation in order not to fall back to competitors. 


For example, overseas enterprises cannot distribute or sell pesticides in China directly and will have to distribute or sell pesticides through either their own distribution entity in China or pesticide distribution agents in China, as stated in the report. 


Influence on pesticide safety

The safety of pesticides in China has always been more concerning than in most advanced countries of the west. China’s government, fully aware of this problem, is trying to fight this issue with the new regulations on pesticides. 


The local authorities will have more influence and pressure to ensure farmers in their regions are educated in the right use of pesticides. This also means that the service regarding any needs for pesticides needs to be increased and improved to ensure a good dealing of the situation. The measurements are aiming for a reduction of pesticide use as well as enhance the management of highly toxic pesticides. 


About the article

The data and information for this article are based on the report: Analysis of the New Regulations on Pesticide Administration in China Edition (1), a report, which provides a detailed analysis on the changes in the new regulations and the effects on manufacturers, traders, registration process, foreign enterprises and pesticides safety. 


Get insights in China’s hardly transparent pesticides market with the detailed report. Profit from many years of experience by experts of China’s agrochemicals industry. 

 


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