2013 Overview of the European Biostimulants Market (Part 2)

By CnAgri Print Biostimulant use is quickly becoming generalised

Historically, biostimulants were applied to high-value crops: mainly protected cultivars in greenhouses, orchards (grapes, citrus, stone fruits, apples, pears) open-field vegetables (tomatoes, salads, etc.) and horticultural products (flowers and ornamentals). In recent years agricultural markets have been undergoing significant changes: high-value crop production in Europe faces lower prices, squeezed between powerful food distribution chains and competition from countries in other regions.

Conversely, the volatility in prices for broadfield crops has transformed low-value crops into high-value crops. Reductions in centralised subsidies mean that European farmers are increasingly operating in a free market. They benefit from the ability to choose which crops to grow but must carefully monitor and manage the return on investment (ROI) for eachinput they apply. As a result, the market for biostimulants is quickly expanding, even if Europe is only at the beginning of this transformation.

Many of the respondents to EBIC’s 2013 survey noted that new crop segments are an important driver of demand for biostimulants, and several noted the increased use of biostimulants on extensive field crops like cereals. Several respondents noted that their export markets outside of Europe are growing faster than the European market. As EBIC President Giuseppe Natale (CEO, Valagro) often says, “Biostimulant companies may be small and medium-sized, but they already operate with a global perspective.”

The full economic impact of biostimulants can only be calculated by considering the efficiency gains they provide

Statistics are too patchy and definitions too variable to accurately estimate the value or volume of the European biostimulants market with precision. However, based on the value of annual total value of biostimulants sales in Europe reported by respondents to EBIC’s 2013 survey, €500 million would be a reasonable, estimate.

The difference between this number and some lower estimates might depend on whether the figure includes only sales to end-users or distributors, or both these sales and the sale of biostimulant substances that could be directly applied but are incorporated into more complex product formulations. According to EBIC’s 2013 survey, about 20% of respondents sell their products only as intermediates with no direct application. The vast majority produce all or most of their products for direct application. It is not clear if this is a representative breakdown for the sector as EBIC membership may seem most relevant to producers with a direct link to farmers.

With regard to employment, it is difficult to estimate the total number of jobs until much more exhaustive data can be gathered, because the vast major of biostimulant companies are small and medium enterprises (SMEs).2 The respondents of the 2011 and 2013 surveys together employ about 2000 people in Europe to work on biostimulants,3 and every respondent reported a growing employment trend for their company in Europe. Between one-third and 100% of these jobs are reported to be knowledge-intensive, depending on the company.

Most of the respondents to EBIC’s questionnaire indicate that they have fewer than 100 employees, and certainly fewer than 250 FTEs4 working on biostimulants. Furthermore, a high proportion5 of biostimulant companies are located outside of dominant economic centres, thus providing a welcome source of knowledge-intensive jobs in rural areas and small cities.

While market value and employment are important figures for determining the economic impact of a sector, two other important criteria must be taken into account in the case of biostimulants: increased efficiency of other agricultural inputs and enhanced quality of output, both of which influence farmer profitability.

Among other beneficial effects, biostimulants can increase nutrient use efficiency so that farmers receive a better return on their investment in fertilisers. This also reduces nutrient losses and the related environmental impacts (and thus the cost of clean-up).

Biostimulants boost general plant vigour so that plants require fewer treatments of plant protection products and respond better to their use.

EBIC members also report that their products raise yields and improve water use efficiency.

All of these benefits have been widely tested and documented in field trials.

It is difficult to generalise because the exact level of the impacts depends on the crop in question, the original state of the soil, how well managed crops already are and a number other factors. However, there is a broad documentation of the effects below:

1. Minimum yield increases related to biostimulant use are being reported at 5-10%. When viewed in the light of the overproduction that occurred in Europe in the not-too-distant past, the need for increased productivity may not seem obvious. But the global agricultural situation changed radically in 2008, when markets entered a period of high volatility. The OECD-FAO Agricultural Outlook: 2001-20206 stresses the need to rebuild stocks to reduce volatility, but also points out that high prices “are a positive signal to a sector that has been experiencing declines in prices expressed in real terms for many decades and are likely to stimulate the investments in improved productivity and increased output needed to meet the rising demands for food” (p.14, emphasis added). There is an increasingly strong consensus that improving agricultural sustainability depends on optimising output on the best arable land and reducing pressure on land that would be better used for other things, including conservation. In the same report, OECD/FAO say that “Land available for agriculture is increasingly constrained...Substantial further investments into productivity enhancements are needed to ensure the sector can meet the rising demands of the future” (p.14, emphasis added). This sustainable intensification is dependent on efficient use of inputs such as nutrients, water and plant protection products, which are fostered by biostimulants use.

2. Fertiliser use efficiency is being documented to increase by 5% at a minimum (and may go as high as 25% or more) when biostimulants are applied. Higher efficiency rates generally occur where fertilisers and biostimulants are delivered through precision irrigation (a practice often called fertigation). If the conservative figure (5%) were generalised to the entire EU, it would mean a savings of some 517,000 tonnes of nitrogen fertiliser in a single year.7

3. Pesticides savings related to biostimulant use have been reported to range between 10 and 15%.

4. Quality characteristics such as fruit setting, homogenous colour and increased size are enhanced in some cases by as much as 15% when biostimulants are used. Increased quality has downstream benefits as well: farmers may be able to garner higher prices for their produce, and produce is likely to be more tolerant of storage and handling.

The report for the global market size of the biostimulants is available.