Pesticide Registration, the Main Barrier to Market Access in Brazil

Guest Author: Flavio Hirata, is a partner at AllierBrasil, an agronomist from Esalq/USP, MBA, and a pesticide registration specialist. flavio.hirata@uol.com.br

16 December 2024, Brazil: For the past 40 years, the Brazilian pesticide market has developed following the growth of its agriculture, which occurred both in terms of planted area and increased yields. Since then, pesticide registration has been the most important non-tariff barrier to market access. This has been the main restriction for companies trying to enter the market, where only a few holds more than 70% of the market share.

Market access has another very important link, which is distribution. It is a dynamic market, sensitive to supply, exchange rate fluctuations, purchase/sale prices, payment terms, credit, etc.

Furthermore, for the product to legally reach the farmer, the registration is mandatory in Brazil. Meanwhile, the figures of the illegal market are alarming. According to Luciano Stremel Barros, president of the Institute for Economic and Social Development of Borders – IDESF, “the smuggling and diversion of products, including pesticides, represent annual losses of approximately US$ 3.58 billion for the industries and Government revenue and national revenue”.

In 2002, the registration of equivalent pesticides was regulated by Decree No. 4074, from January 4^th. This was one of the main milestones which allowed for more companies to access the market.

Let’s analyze below the history of approvals to obtain pesticide registration, the key for market access.

From 2000 to 2005, the number of approved pesticide registrations was less than 100 per year, with an average of 83 registrations/year.

Pesticide registration approvals from 2000 to 2005

Type of Registration	2000	2001	2002	2003	2004	2005
Technical Product	20	23	13	19	9	23
New Technical Product	9	11	5	9	6	5
Formulated Product	38	54	23	40	54	48
New Formulated Product	13	14	6	4	11	5
Others	2	13	6	5	4	8
Total	82	115	53	77	84	89

At that time, not many companies in the country took the initiative to register a broad portfolio of products. The pioneers were Consagro, through AllierBrasil’s consulting services, and Volcano.

In 2006, the first registrations of equivalent technical products were approved, and, in 2007, 79 registrations of equivalent formulated products were approved. Registrations of equivalent products were evaluated and approved in approximately 8 to 18 months.

While these approvals were given in short time, other factors slowed down the registration process disproportionately, such as the Experimental Use Permit (RET), mandatory for sample import and testing. Approval of a RET used to demand 12 to 24 months, which was about the same time, or even up to twice as long, for the evaluation/approval of an equivalent pesticide registration.

Laboratory costs were another factor, ranging from US$ 60,000 to US$ 80,000 for formulated products and technical products, respectively. This amount represents much more than double what is currently charged by laboratories in the country.

From 2007 to 2009, were approved 213 registrations of Equivalent Formulated Product (EFP), reaching an average of 71 registrations/year. However, from 2010 to 2016 there was a drastic drop in the number of approvals, with an average of 43 approvals/year.

Pesticide registration approvals from 2006 to 2016

Type of Registration	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Technical Product	26	2	3	4	2	0	0	1	0	0	1
New Technical Product	5	2	6	4	0	1	1	2	5	2	1
Equivalent Technical Product	7	50	45	28	35	60	64	45	79	46	160
Formulated Product	56	57	57	30	26	32	10	18	16	12	19
New Formulated Product	7	5	5	7	1	1	1	3	7	1	10
Equivalent Formulated Product	0	79	72	62	34	36	75	30	33	47	46
Others	8	7	3	2	6	16	17	11	8	31	40
Total	109	202	191	137	104	146	168	110	148	139	277

This situation reversed after 2017, when the number of approvals more than doubled when compared to previous years. 177 equivalent technical products and 131 equivalent formulated products were approved in 2017.

Pesticide registration approvals from 2017 to 2023

Type of Registration	2017	2018	2019	2020	2021	2022	2023
Technical Product	0	0	1	3	1	0	0
New Technical Product	5	2	3	5	7	8	11
Equivalent Technical Product	177	193	268	162	182	271	179
Formulated Product	36	48	36	69	60	34	36
New Formulated Product	9	4	19	10	12	35	24
Equivalent Formulated Product	131	148	104	147	207	168	215
Others	46	54	43	97	93	136	90
Total	404	449	474	493	562	652	555

Several other markets have characteristics similar to those of the agrochemicals market, which means they are “dynamic markets, sensitive to several factors such as supply, exchange rate fluctuation, purchase/sale price, payment terms, credit”. However, the pesticide market has a differential: product registration. The time for registration approval can exceed 10 years, making access to the market extremely difficult or even impossible.

In order to shorten the time for registration process and to access the market faster, registrants are going to the court against the agencies responsible for evaluations, which are Anvisa, Ibama and the Ministry of Agriculture. This is possible because the legislation stipulates a maximum period to conclude evaluations. For equivalent formulated products and equivalent technical products, the deadline is up to 12 months, in accordance with Law No. 14785, from December 27^th, 2023, known as the Pesticides Law.

According to surveys carried out by AllierBrasil, 30.23% of registration approvals of equivalent formulated products in 2023 was in compliance with court decisions. In 2022, it was 35.71%.

Pesticide registration does not guarantee market access, nor the longevity of the company’s operations. For instance, the registrations held by Consagro and Volcano ended up incorporated by other players.

On one hand, the Pesticides Law establishes 12 months to conclude pesticide registration evaluation, on the other hand it also establishes that “once the registration is approved… the registration holder will have up to two years to start production and commercialization of the product, under penalty of cancellation of the  registration”. In other words, the registration is approved with an “expiry date”.

It is important to emphasize the need for extreme caution when evaluating products that will be sprayed over crops. Pesticides must pose fewer risks and impacts to the environment and human health.

In conclusion, the long time for pesticide registration approval inhibits competition and discourages investments in Brazil.

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