Study: Crop Protection R&D Costs Increase Significantly
CropLife America has released a new study for the crop protection industry showing a nearly 40% increase in investment expenditure over the past decade in the discovery, development, and registration of new pest and disease prevention products in the U.S.
February 26, 2010
CropLife America (CLA) has released a new study of research and development for the crop protection industry showing a nearly 40% increase in investment expenditure over the past decade in the discovery, development, and registration of new pest and disease prevention products in the U.S. and Europe. Commissioned by CLA and the European Crop Protection Association (ECPA), the study offers new perspectives on committed expenditure related to innovation for protecting crops and fighting disease through a constantly changing regulatory process for the industry. Conducted by agribusiness consultant Phillips McDougall, the research indicates how the authorization of a new agrochemical product is highly complex, expensive and time consuming.
While announcing the study’s results during a news conference today at the National Press Club, CLA President and CEO Jay Vroom stressed the importance of research and development in bringing a new crop protection product to market. However, he expressed concern over the lengthy time, an average of 9.8 years from the first research tests, that it takes for final authorization of the product for market introduction.
“This process is essential to helping feed the world’s growing population, projected to exceed nine billion in the year 2050,” said Vroom. “Seventy percent more food will be required just 40 years from now. However, it is only through the vested research interests and funding of both the public and private sectors that we can solve those unique challenges facing modern agriculture and ensure abundant, sustainable and nutritious food.”
“CLA recognizes that innovation in the science of crop protection is equally enhanced by public research and we support sound investment in public funding for research on plant and pest biology and crop protection technologies,” he stated.
Vroom said that CLA will present its priorities for research to the USDA National Institute for Food and Agriculture at a stakeholders’ workshop on April 13, emphasizing that additional future benefits of crop protection products in modern agriculture require a substantial level of research funding.
The Phillips McDougall study reported that discovery and development for new crop protection products reached an average of $256 million in 2005-2008, a 39.1% increase over 2000. During the same timeframe, the cost of taking a product through developmental stages increased to an average of $146 million, nearly double the amount in 2000. The greatest increase was identified in the costs of field trials which rose over 115% in 2005-08 to an average of $54 million.
Even though a high number of products entered the research and development chain, the number of products actually making it through the stages to market introduction declined from four in 1995 to only 1.3 in 2005-08.
“We are facing an urgent need for agricultural innovation, one that is crucial to meeting global demands,” Vroom stated. “Farmers will require new tools, techniques and technologies to meet that demand while using about the same amount of land, water and other natural resources. However, ever-increasing costs and lengthy timelines are challenging our ability to respond.”
Besides exhaustive laboratory and field tests that help ensure all new products are safe, companies must also adhere to constantly changing regulatory requirements, according to Vroom.
“We must inform our legislators and regulators about the stringent regulatory obligations with which the industry is already complying. The crop protection industry is one of the most highly regulated sectors in all of agriculture and we support a sound, consistent and risk-assessment based regulatory system for our products conducted by the Environmental Protection Agency (EPA).” Vroom said. “What we need is a consistent regulatory framework that is supported by science based policies in the support of modern agricultural production.”
14 leading companies in the global crop protection sector were surveyed by Phillips McDougall for the study. Those firms agreed that the overall expenditure in research and development would continue its dramatic increase over the upcoming years. Overall expenditure on agrochemical R&D by the companies surveyed is expected to increase by a further 26.4% between 2007 and 2012, with increases spread across the entire spectrum of the R&D process.
In closing, CLA’s president urged everyone not to take modern agriculture or the research that supports it for granted. “It is essential that we continue to advance modern agricultural production by investing in crop protection research, innovative farming methods and new technologies to meet the unique challenges faced by agriculture and consumers worldwide who rely on it,” he concluded.
To download a free copy of the report, please visit www.croplifeamerica.org/phillipsmcdougallstudy.