Hainan, as the earliest province in China to open the agricultural materials market, the first province to implement the wholesale franchise system of pesticides, the first province to implement product labeling and coding of pesticides, the new trend of pesticide management policy changes, has always been the attention of the national agricultural materials industry, especially the vast layout of Hainan pesticide market business operators.
On March 25, 2024, in order to implement the relevant provisions of the Regulations on Fair Competition of Hainan Free Trade Port and the Provisions on the Management of Pesticides in Hainan Special Economic Zone, which came into effect on October 1, 2023, the People’s Government of Hainan Province decided to repeal the Measures for the Management of Wholesale and Retail Operation of Pesticides in Hainan Special Economic Zone.
This also means that pesticide management in Hainan will take a substantial step forward, the market will be further loosened, and the monopoly situation of 8 people (before October 1, 2023, there are 8 pesticide wholesale enterprises, 1,638 pesticide retail enterprises and 298 restricted pesticide enterprises in Hainan Province) will be officially broken. Evolved into a new pattern of dominance, into a new volume: volume channels, volume prices, volume services.
2023 “new rules” have been implemented
Before the repeal of the Measures for the Administration of the Wholesale and Retail Operation of Pesticides in the Hainan Special Economic Zone, the Provisions on the Administration of Pesticides in the Hainan Special Economic Zone (hereinafter referred to as the “Provisions”) have been implemented on October 1, 2023.
“No longer distinguish between the wholesale and retail operations of pesticides, reduce the price of pesticide use, and correspondingly no longer determine the wholesale enterprises and retail operators of pesticides by bidding, reduce the cost of pesticide management, and implement a management system that is consistent with the national pesticide management license…”
This has largely brought good news to the entire agricultural community, so the document has been recognized and praised by the majority of pesticide operators. Because this means that the market capacity of more than 2 billion yuan in Hainan pesticide market operation will be loosened, will usher in a new round of big changes and opportunities.
The “Several provisions” from the 2017 version of 60 streamlined to 26, take the form of “small incision, short fast spirit” legislation, adhere to the problem-oriented, for the production, transportation, storage, management and use of pesticides in the process of prominent problems, targeted amendments.
Among them, one of the biggest highlights is the cancellation of the pesticide wholesale franchise system.
So, what are the main contents and highlights of the “new regulations” that have been implemented for nearly half a year, we will sort out and review it again, in order to make manufacturers and local pesticide operators in Hainan pesticide market have a clearer understanding and cognition of the new regulations, better guide and adjust their own layout and business strategies, and seize some new opportunities under the change in time.
The pesticide wholesale franchise system was officially abolished
The “Several Provisions” standard the fair competition rules of free trade ports, change the original pesticide management system, control illegal business behavior from the source, and ensure the fair participation of pesticide market players in competition.
The first is to cancel the wholesale franchise system of pesticides, no longer distinguish between wholesale and retail operations of pesticides, and reduce the price of pesticide use. Accordingly, the pesticide wholesale enterprises and pesticide retail operators are no longer determined by bidding, so as to reduce the operating costs of pesticides.
The second is to implement a management system that is linked to the national pesticide business license, and qualified pesticide operators can directly apply to the competent agricultural and rural departments of the people’s governments of the cities, counties and autonomous counties where their operations are located for pesticide business licenses.
In fact, as early as 1997, Hainan Province was the first in the country to implement the pesticide licensing system and open up the pesticide market, and in 2005, the “Several Regulations on the Management of Pesticides in the Hainan Special Economic Zone” was issued, which fixed this reform in the form of regulations.
In July 2010, the Hainan Provincial People’s Congress promulgated the newly revised “Several Regulations on the Management of Pesticides in Hainan Special Economic Zone”, establishing the wholesale franchise system of pesticides in Hainan Province. In April 2011, the Hainan Provincial government issued the “Measures for the Administration of Pesticide Wholesale and Retail Business Licensing in Hainan Province”, which stipulates that by 2013, there will only be 2-3 pesticide wholesale enterprises in Hainan province, each with a registered capital of more than 100 million yuan; The province has 18 city and county regional distribution centers; There are about 205 retail enterprises, in principle 1 in each township, with a registered capital of not less than 1 million yuan, and cities and counties can make appropriate adjustments according to the actual situation of agricultural development, the layout of state-owned farms and traffic conditions. In 2012, Hainan issued the first batch of pesticide retail licenses, which marks a significant progress in the reform of the pesticide management system in Hainan, and means that manufacturers can only sell pesticide products in Hainan through cooperation with wholesalers who are invited to tender by the government.
The “Several Provisions” optimize the pesticide management mechanism, cancel the pesticide wholesale franchise system, no longer distinguish between pesticide wholesale and retail operations, reduce the price of pesticide use, and correspondingly no longer determine the way of pesticide wholesale enterprises and pesticide retail operators by bidding, so as to reduce the cost of pesticide management. Implementation of the national pesticide business license management system, qualified pesticide operators can directly apply to the city, county, autonomous county people’s government in charge of agriculture and rural authorities for pesticide business license.
The staff of the relevant office of the Hainan Provincial Department of Agriculture and Rural Affairs said: This means that the pesticide policy in Hainan will be in line with the national standard, there is no longer the difference between wholesale and retail, and there is no need to label; The abolition of the wholesale franchise system of pesticides means that pesticide products are more free to enter the island, as long as the products are compliant and the process is compliant, there is no need to record and approve the island.
On March 25, the People’s Government of Hainan Province decided to abolish the “Hainan Special Economic Zone Pesticide wholesale and retail business licensing Management Measures” (Qiongfu [2017] No. 25), which means that in the future, mainland enterprises can formally cooperate with enterprises on the island in accordance with the regulations, and pesticide manufacturers and operators will have greater choice.
According to industry sources, after the official cancellation of the pesticide wholesale franchise system, there will be more enterprises entering Hainan, the corresponding product prices will be reduced, and more choices will be good for Hainan’s fruit and vegetable growers.
Biopesticides are promising
Article 4 of the Provisions states that people’s governments at or above the county level shall, in accordance with relevant provisions, give incentives and subsidies to those who use safe and efficient pesticides, or adopt biological, physical and other technologies to prevent and control diseases and pests. Encourage pesticide producers and operators, agricultural scientific research institutions, professional colleges and universities, specialized disease and pest control service organizations, agricultural professional and technical associations and other social organizations to provide technical training, guidance and services for pesticide users.
This means that biopesticides are promising in the Hainan market.
At present, biopesticides are mainly used in cash crops represented by fruits and vegetables, and Hainan is a large province with rich fruit and vegetable crop resources in China.
According to the Statistics Bulletin of Hainan Province’s National Economic and Social Development in 2023, as of 2022, the harvest area of vegetables (including vegetable melons) in Hainan Province will be 4.017 million mu, and the output will be 6.0543 million tons; The fruit harvest area was 3.2630 million mu, and the output was 5.6347 million tons.
In recent years, the harm of resistant bugs, such as thrips, aphids, scale insects and whitefly, has been increasing year by year, and the control situation is serious. Under the background of reducing pesticide application and increasing efficiency and green agricultural development, Hainan has been implementing the idea of “green prevention and control”. Through the combination of biopesticides and high-efficiency and low-toxicity chemical pesticides, Hainan has integrated the prevention and control methods of physical disease and pest control technology, plant induced immunity technology, biopesticide control technology and high-efficiency and low-toxicity pesticide control technology. It can effectively prolong the prevention and control time and reduce the frequency of application, so as to achieve the purpose of reducing the amount of chemical pesticides and improving the quality of crops.
For example, in the control of cowpea resistance thrips, Hainan pesticide department recommends that farmers use 1000 times the liquid Metaria anisopliae plus 5.7% Metaria salt 2000 times the liquid, in addition to insecticide and increase the ovicide, adult and egg control at the same time, in order to prolong the control effect and save the frequency of application.
It can be predicted that biopesticides have broad promotion and application prospects in Hainan fruit and vegetable market.
The production and use of prohibited pesticides will be more strictly supervised
Due to regional problems, pesticide restrictions in Hainan have always been stricter than those on the mainland. On March 4, 2021, the Hainan Provincial Department of Agriculture and Rural Affairs issued the “List of Prohibited Production, Transportation, Storage, Sale and Use of Pesticides in Hainan Special Economic Zone” (revised version in 2021). The Announcement listed 73 prohibited pesticides, seven more than the list of prohibited pesticides formulated by the Ministry of Agriculture and Rural Affairs. Among them, the sale and use of fenvalerate, butyryl hydrazine (bijo), chlorpyrifos, triazophos, flufenamide are completely prohibited.
Article 3 of the Provisions stipulates that the production, transportation, storage, operation and use of pesticides containing highly toxic and highly toxic ingredients are prohibited in the Hainan Special Economic Zone. Where it is really necessary to produce or use pesticides containing highly toxic or highly toxic ingredients due to special needs, approval shall be obtained from the competent department of agriculture and rural affairs of the provincial people’s government; where approval shall be obtained from the competent department of agriculture and rural Affairs of The State Council according to law, provisions thereof shall be followed. The competent department of agriculture and rural affairs of the provincial people’s government shall publish to the public and print and distribute the catalogue of pesticide varieties and the scope of application of which the production, operation and use of pesticides are promoted, restricted and prohibited by the State and the special economic zones, and post it at the pesticide operation sites and the office places of the village (resident) people’s Committee. That is to say, in this part of the prohibited use list, it is still subject to the Hainan Special Zone.
There is no absolute freedom, online shopping pesticide system is more sound
The abolition of the pesticide wholesale franchise system means that the pesticide sales and management of the island are free, but freedom is not absolute freedom.
Article 8 of the “Several Provisions” further improves the drug management system in order to adapt to the new situation, new formats and new requirements in the field of pesticide circulation. First, the implementation of electronic ledger, pesticide producers and operators should establish electronic ledger through the pesticide information management platform, complete and truthful record of pesticide purchase and sales information, to ensure that the source and destination of pesticides can be traced. The second is to establish and improve the system of online purchase and sale of pesticides, and make it clear that online sales of pesticides should comply with the relevant provisions of pesticide management. The third is to clarify the review department of pesticide advertising, stipulating that pesticide advertising should be reviewed by the municipal, county and autonomous county agricultural and rural authorities before release, and shall not be released without review.
Pesticide e-commerce opens a new pattern
Before the release of the “Certain Provisions”, all pesticide products entering Hainan can not be wholesale business, and pesticide e-commerce can not be mentioned.
However, Article 10 of the “Several Provisions” points out that those engaged in pesticide business activities through the Internet and other information networks should obtain pesticide business licenses in accordance with the law, and continue to publicize their business licenses, pesticide business licenses and other real information related to business operations in a prominent position on the home page of their website or the main page of their business activities. It should be updated in time.
This also means that pesticide e-commerce, which had been strictly prohibited, has opened up the situation and can enter the Hainan market after October 1, 2023. However, it should also be noted that the “Several Provisions” require that units and individuals who purchase pesticides through the Internet should provide true and effective purchase information. But it doesn’t matter, because at present, both sides of the transaction of the relevant e-commerce platform are real-name registration or registration.
Agricultural suppliers should do a good job in technological transformation
After the implementation of the “Certain Provisions” on October 1, 2023, it means that the pesticide market in Hainan has implemented a management system that is connected with the national pesticide business license, that is, a unified market. Coupled with the official repeal of the “Hainan Special Economic Zone Pesticide wholesale and retail business licensing Management Measures”, it means that under the unified large market, the price of pesticides in Hainan will be more determined by the market.
Undoubtedly, next, with the advancement of change, the reshuffle of the pesticide market in Hainan will continue to accelerate and fall into the inner volume: volume channels, volume prices, volume services.
Industry insiders said that after the monopoly pattern of “8 everyone” was broken, the number of pesticide wholesalers and retail stores in Hainan will gradually increase, the sources of purchase will become increasingly diversified, and the cost of purchase will decrease accordingly; The number of products and product specifications will also increase significantly, and the choice space for small and medium-sized wholesalers, retailers, and farmers to purchase pesticide products will increase, and the cost of drugs for farmers will decrease accordingly. The competition of agents intensifies, facing elimination or reshuffle; Agricultural sales channels will be shorter, manufacturers can directly reach the terminal/farmers beyond the dealer; Of course, the market competition will be further heated, the price war will be more intense. Especially for distributors and retailers in Hainan, the core competitiveness should shift from product resources to the direction of technical services, from selling products in the store to selling technology and services in the field, and it is an inevitable trend to transform into a technical service provider.
Post time: Apr-22-2024