5 Key Drivers of Growth in the Agricultural Biologicals Market
Agricultural biologicals are a diverse group of products derived from naturally occurring microorganisms or microbials, plant extracts, beneficial insects, or other naturally occurring materials or organic matter. They are used by growers to increase plant health, drive yield, increase nutrient use efficiency, help mitigate stress, and a whole host of other benefits. They also lower the environmental impact of conventional agriculture by increasing the efficiency of fertilizer and pesticides, allowing for a lower use with higher efficacy. As a key driver of sustainable agriculture, biologicals are one of the fastest-growing segments in crop nutrition solutions, and include biostimulants, biopesticides, and biofertilizers.
While agricultural biologicals have been used by farmers for decades as part of biological or organic agriculture, the sector has expanded and undergone rapid transformation and growth in recent years. Valued at 7.62 billion in 2019, the market is expected to double in size by 2028. Employed across the world, biological products are being used in both small organic farms and massive commercial enterprises. What is driving this massive growth?
1. CONSUMER DEMAND — One factor driving the growth is the consumer demand for healthier, climate-smart food production. Consumers are calling for more transparency in how their food is grown. Growers are responding to the market demand for food grown using natural inputs from healthy sources with minimal environmental impact. In some European markets, biologicals are seen as organic 2.0 — leading consumers to actively seek out produce grown using biologicals — a trend that is growing around the world.
2. RESPONSE TO ENVIRONMENTAL CONCERNS — Biologicals are derived from naturally occurring sources — making them a safer, more sustainable choice for our planet. Their efficiency and compatibility with conventional crop inputs, including nutrition and pesticides, allow for more efficient use of agricultural inputs, reducing the overall burden to the environment.
Climate smart agricultural practices are leading the charge in mitigation of and adaptation to the current environmental challenges facing the planet. Nitrogen, the most prevalent element in our atmosphere, is crucial for the growth and health of crops. It is a key component of conventional fertilizers. But when nitrogen either leaches into ground water or runs off from farms, it can cause contamination of municipality drinking water and massive aquatic plant and algal growth. These blooms choke off oxygen to fish, sometimes killing of thousands or millions of them at a time, and clog water intakes that communities rely on for clean tap water. Biostimulants have been shown to increase nutrient uptake, leading to higher nitrogen use efficiency which results in less nitrogen run-off and healthier waterways.
3. INCREASED ABIOTIC AND BIOTIC STRESS — Biologicals are known for their ability to boost efficiency in crop nutrients — but this doesn’t just apply to yield and growth. Biologicals also contribute to a crop’s tolerance to and recovery from abiotic and biotic stress, leading to healthier, more robust plants with a higher resistance to stress. They optimize the plant’s own defenses so that plants can ward of disease and adapt to different environmental conditions. This is a key component in the adaptation to climate change. As arable land becomes scarcer and demand for healthy, nutritious food increases around the world, biologicals allow us to grow healthier crops with higher yields in harsher environments.
4. GROWTH IN SEED TREATMENTS — Seed coating forms a chemical barrier for the germinating seed that either enhances the vigor of the seed or protects the seed from harmful insects and pathogens, shielding the seed from both biotic and abiotic stress and improving plant health. Increasingly, growers have been looking to biological seed treatments as means of boosting production, enhancing vigor, and/or protecting the seed from insects and other stresses during germination. In addition to using traditional seed treatments like insecticides and fungicides there is a growing practice of coating the seed with biostimulants to accelerate germination, increase nutrient uptake, and mitigate the effects of the cold and wet conditions the seed is exposed to as it starts the germination process. Biopesticides are also being used increasingly as a seed treatment, protecting the seed from pests to improve seedling emergence, vigor, and stand establishment. According to GMI, biostimulants market demand for seed treatment application alone is likely to surpass USD 480 million by 2026.
5. ECONOMIC PRESSURE — As the world population grows and arable land becomes scarcer, trade and land pressures are compelling farmers to do more with fewer resources. Biologicals help farmers see a greater return on investment. This increase in ROI is even more crucial for farmers in poorer nations. FBSciences had the opportunity to work with small holder farmers in Malawi, one of the poorest nations in the world, and were able to see a 75% increase in the average income of a typical Malawian farmer through the use of biologicals. Agricultural biologicals grow healthier plants that can better withstand stress, which reduces the need for traditional agricultural inputs. This increased yield boosts profit for the farmers while at the same time protecting our natural resources and human health.
The next decade will bring with it a number of challenges — economic, environmental, and social pressures throughout the world will continue to escalate. Farmers and growers around the planet will face the hardest challenges as weather patterns become more extreme and economic trade puts pressure on an already low-margin, but critical endeavor. With this great challenge also comes great opportunity — and we plan to work hard in making sure our sector continues to innovate and work together to provide solutions to help.
