4. Developments of the biofertilizers market

There is a nascent but aggressively growing biofertilizers market. Among the major concerns in today’s world are the pollution and contamination of soil by excessive and injudicious use of agrochemicals, as well as their detrimental effects to humans, in particular, by agricultural workers and rural communities. The concerns on both the health and environmental front have compelled governments to look for environmentally friendly options and switching from ’risk reduction’ and ‘safe use’ procedures, in sustainable agricultural production. The use of biofertilizers and biopesticides offers a better option to augment the ‘Fertilizer Use Efficiency’ and maintain soil health. Biofertilizers are seen as an important component in Integrated Nutrient Management, with a supplementary role for the largest consumers of fertilizers.

4.1. Challenges and options in the biofertilizer business

In spite of being a cost-effective input, biofertilizers have not been completely accepted by the farmers till now. Some of the reasons/constraints for this low acceptance of biofertilizers are narrated below. However, the product modification as a “liquid form” has overcome some limitations and has provided opportunities for marketers.

Marketing challenges:

1. Biofertilizers are live microorganisms which die in case of high temperature.
2. The shelf-life of biofertilizers is limited to 6–12 months in powder form.
3. Biofertilizers are used before sowing and delay in dispatches leads to inventory carry-over and expiry of product.
4. Some biofertilizers are crop specific as well as location specific and, therefore, their efficacy does not remain the same at different locations due to differences in agro-climatic conditions and soil edaphic factors.
5. Soil characteristics like high nitrate, low organic matter, less available phosphate, high soil acidity or alkalinity, high temperature as well as presence of high levels of agro-chemicals or low levels of micro-nutrients contribute to failure of inoculants or adversely affect their efficacy.
6. The changes in the cropping patterns by farmers also adversely affect the sales.
7. Supply of sub-standard or spurious material by some manufacturers also adversely affects the credibility of biofertilizers, as they are a new product.
8. Some firms are selling organic manures as biofertilizers. Some organizations state a shelf-life of two/one year despite the norm of maximum 3–6 months.
9. Naturally occurring soil microflora and fauna also often inhibit the growth of introduced inoculums due to competition.
10. Lack of awareness among farmers regarding the benefits of biofertilizers.
11. There is no magic effect of biofertilizers and their impact is not visible in standing crop and, therefore, farmers are not convinced with the benefits of biofertilizer use.

4.2. Trend option – switching over to liquid biofertilizers, as they are superior than powder-based ones

1. Longer shelf-life to as long as 12 to 24 months.
2. No contamination.
3. No effect of high temperature, as tolerant up to 45 degrees Celsius with no activity loss.
4. Greater potential to fight with native population.
5. High population density of more than 10⁹ cells/mL can be maintained up to 12 to 24 months.
6. Easy identification by typical fermented smell.
7. Cost saving on carrier material, pulverization, neutralization, sterilization, packing and transport.
8. Quality control protocols are easy and quick.
9. Better survival on seeds and soil.
10. No need of running biofertilizer production units throughout the year.
11. Very easy to use by the farmer.
12. Dosage is 10 times less than that of carrier-based powder based biofertilizers.
13. High commercial revenues.
14. High export potential.
15. Very high enzymatic activity, since contamination is nil.

Some examples OF MARKETING STRATEGIES, as suggested below, may work strongly in the marketing of biofertilizers:

1. Field demonstration.

The farmers do what they see because “seeing is believing” and, therefore, result as well as method demonstration is a very effective tool in promoting the use of biofertilizers. The producers may synergize their efforts on this front, as biofertilizers are new and it is very crucial to show the impact of biofertilizer use to farmers and educate them about the economics/returns. Therefore, a demonstration farm may be developed jointly, at different locations, defining a catchment area, which could be shown to farmers at different crop stages.

2. Market segmentation and product positioning.

The segmentation is primarily dividing the market into various groups of buyers. The biofertilizer market can be segmented by “specific crop grower (Fruits/ Vegetables/ Oilseed/ Pulses/ Sugarcane/ Cereals), institutional buyers (Cane / Tea / Coffee / cotton/ oilseeds/ pulses federations and research-farms, SFCI, Agro-industries, etc) and customer size (major/minor), geographical location (high/low-consuming area and accessibility), and product application (supplementary/exclusive)”. Once the market is segmented, it is important to target the market and concentrate on the most profitable one. Positioning starts with a product, but positioning is not what one does to a product; rather, it is what one does to the mind of a prospective customer. Thus, the product is being positioned in the mind of the customer, i.e. how he/she perceives the product. In an “over-communicated society”, the marketer must create distinctiveness. The appropriate “USP” (Unique Selling Proposition) needs to be identified and propagated widely, for example: (a) Save cost through reduced dosage of chemical fertilizer; (b) Improves resistance power against disease; © Enhance sugar recovery percent in sugarcane.

4.3. Trends in pricing and sales promotion of right biofertilizers

Rural markets are quite “price sensitive” and particularly biofertilizers, being technical and new to farmers with a lot of constraints, do not fall under the category of “zero elasticity of demand” and need more push in view of lack of pull. The company generally determines the price of a product on the basis of its marketing objectives. Here, it is important to understand how biofertilizers are perceived in terms of value offered for money spent by customers. Biofertilizers have derived demand and so far, they have not really been perceived by farmers as giving those economic returns by reduction in the quantity of chemical fertilizers used. Unless farmers are convinced about substantial savings in cost of production through reduced usage of chemical fertilizers and getting similar yield, biofertilizer manufacturers will probably not be able to apply “pricing strategies”.

4.4. The global biofertilizers market

The global biofertilizers market is expected to reach USD 1.88 billion by 2020 at a CAGR of 14.0% from 2015 to 2020. In 2012, the overall market was worth US $440.0 mln.

The biofertilizers market is projected to grow at a CAGR of 14.0% from 2015 to

2020. The increasing demand for organic products from emerging economies due to increased spending power and awareness level regarding health and wellness are expected to accelerate the growth of the biofertilizers market.

4.5. Sales and usage promotion

There is a great need to promote the product, from the point of view of both sales and usage. The channel members, i.e. dealer/distributors, need to be motivated by offering tangible benefits/incentives linking sales targets, such as “free family tour, gifts etc.” Similarly, the consumer also needs to be attracted by offers of coupons, premiums, contests, buying allowances etc. based on customer characteristics/buying behaviour. The progressive farmer village leaders, besides dealers, may also be identified for the purpose of conducting demonstrations and should be appropriately compensated.

4.6. Publicity and training

The POS (Point of Sales) material must be made available to all dealer/distributors and it also needs to be ensured that the product is displayed visibly. Wider publicity through Radio and educational films screening also needs to be taken up vigorously. Free distribution of biofertilizer during farmer meetings must be avoided. The orientation and training programmes for field sales force and dealers/distributors also need to be chalked out. There is a need of an exclusive team of Extension Executives for promoting biofertilizers with constant visits and developing a close connection with farmers and undertaking demonstrations with replication in nearby villages.

The major research focus is and should be on the production of efficient and sustainable biofertilizers for crop plants, wherein inorganic fertilizer application can be reduced significantly to avoid further pollution problems.

The most important and specific research needs, according to Swapna Latha Aggani from Kakatiya University, should highlight the following points:

1. Selection of effective and competitive multi-functional biofertilizers for a variety of crops;
2. Quality control system for the production of inoculants and their application in the field, to ensure and explore the benefits of plant microorganism symbiosis;
3. Study of microbial persistence of biofertilizers in soil environments under stressful conditions;
4. Agronomic, soil and economic evaluation of biofertilizers for diverse agricultural production systems;
5. Transferring technological know-how on biofertilizer production to the industrial level and for optimum formulation;
6. Establishment of legislation and strict regulation for quality control in markets and application.