The seed treatment market is projected to reach a value of USD 11.31 billion by 2022, at a CAGR of 10.82% from 2017 to 2022. The global market has been driven by the successful implementation of practices for sustainable agriculture, supportive regulations to encourage the research and production processes, and the rise in environmental concerns associated with excessive pesticide use across the globe. This has promoted the growth of the market, particularly in China, India, Australia, and Argentina.

Based on crop type, the cereals & grains segment accounted for the largest share in 2016. This is attributed to the significant rise in agri-inputs usage on crops such as corn, wheat, rice, and barley in the US, China, Japan, and European countries. However, due to the increasing industrial value of soybeans and canola, the demand for seed treatment for these crops is also expected to increase. High-value crops such as vegetables are a niche market for seed treatment; however, this market has been witnessing a steady growth owing to the growing number of products for vegetables in the market.

On the basis of type, the biological seed treatment segment is projected to grow at the highest CAGR from 2017 to 2022. At a global level, the market for biologicals is expected to witness significant growth, which in turn offers more opportunities for the manufacturers during the forecast period. The biological seed treatment segment is projected to witness the highest growth rate owing to the increasing awareness about the harmful effects of chemical pesticides, stringent government regulations regarding their use, and the ban on chemical usage (such as neonicotinoids) on the field posed in several regions, particularly the European Union. Developments are being studied upon to incorporate controlled-release technology by clubbing polymer coatings with treated seeds.

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Asia Pacific is projected to be the fastest-growing market for seed treatment between 2017 and 2022. Asia Pacific is a key market for seed treatment as the region’s economy is heavily dependent on agricultural outputs and the trade of agricultural commodities. Trade barriers are hence expected to cause trade scarcity, which is a serious issue for Asian trade blocs. To improve agricultural trade, there is an increased necessity to maintain the yield, and hence there has been an increasing focus on seed treatment to maximize the yield of crops such as cereals and oilseeds. Key players focus on research & development to innovate products conforming to regulations, which form the basis for the demand of seed treatment in markets such as South America and Asia Pacific.

Driver: Seed treatment as low-cost crop protection solution

Seed treatment is one of the most popular chemical crop protection methods available today. It provides better crop establishment, that is, healthy germination and protection against seed-borne and soil-borne diseases at a relatively low cost than spraying, thereby ensuring the salability of the harvest. A relatively small amount of active ingredients is required to protect the seedling against a wide variety of fungal diseases and pests.

With rising concerns regarding crop protection, productivity, and yield, expenses on crop protection have significantly increased. Crop protection is the second-highest expense after fertilizers in farming. These expenses can be reduced through seed treatment as the volumes required are less as compared to foliar or furrow application. Due to the limited seed surface area, not only are the active ingredients required in limited quantities, but also are effective enough to control early seed diseases to a large extent. As compared to the surface application of crop protection products, the loss is significantly reduced by 99% with the help of seed treatment.

Also, genetically modified (GM) seeds with target protection against specific pests are found to be more expensive than seed treatment. Hence, seed treatment is a more cost-effective solution than using GM seeds for crop protection in highly regulated GM countries.

Restraint:  Existing ban on neonicotinoids

Chemical seed treatments are detrimental to the environment and pose a serious risk to pollinators. The neonicotinoid class of insecticides is considered as highly toxic to honeybees.

As per the report of IUCN (International Union for Conservation of Nature), neonicotinoids and another chemical substance, fipronil, are found to be poisonous the air, water, and soil. These pesticides leach into water from the soil and pose a serious threat to birds, butterflies, snails, and earthworms.

As the ban on neonicotinoids is linked with the depletion of bee species by research studies, its unavailability could force crop growers to rely on a few older classes of insecticides. This would, in turn, lead to the usage of foliar sprays of broad spectrum insecticides instead of targeted seed treatment, leading to a significant impact on beneficial & harmless insects and predators. This could further lead to crop damage due to the inadequacy to tackle invasive pests, which are resistant to older insecticide classes.

Rapeseed crops have been the worst affected post their ban in the UK. Apart from incurring a loss of around USD 1 billion, the crop has been severely infected with flea beetle, a pest normally controlled by neonicotinoids. Later in the season, the crop is susceptible to another problem, the turnip yellow virus that is spread by the peach potato aphid. Such bans serve as a restraint for market growth.

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Opportunity: Innovative combination of products

With growth in R&D associated with seed treatments, there have been various positive product evolutions that can enter the market in the next five years. Manufacturers of seed treatment products have come up with innovative combinations of these products, which could be extremely beneficial for crop yields, both qualitatively and quantitatively.

For instance, the Poncho/VOTIVO product from Bayer SeedGrowth is a biological seed treatment for corn and soybean crops, and is a combination of a systemic chemical insecticide and biopesticide that provides protection against nematodes. Another multicomponent product launched in the market is BASF’s Vault HP plus Integral, which helps in maximizing nitrogen fixation and improving crop yield. In addition to the rhizobium inoculant, the product is also treated with a biofungicide, which helps in crop protection.

These combinations of chemical-biological and biological-biological components can be marketed and distributed to farmers in a customized way depending on the crop to be harvested and the soil conditions. Manufacturers such as Bayer and Syngenta have been developing biological seed treatment products based on crop growing conditions at the regional level. These customized services are expected to develop strong market inroads in the commercialized seeds industry in the next five years.