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Business Opportunities in Agricultural Testing Market

Agricultural Testing: Who will be your Top Customer; what will make them switch?

The agricultural testing market was valued at USD 4.30 Billion in 2016; this is projected to reach USD 6.29 Billion by 2022, at a CAGR of 6.64% during the forecast period. Stringent safety and quality regulations for agricultural commodities, increase in outbreaks of foodborne illnesses, and rapid industrialization leading to the disposal of untreated industrial waste into the environment are the factors driving this market.

How are technological advancements and innovations creating growth opportunities for manufacturers in the agricultural testing market?

The focus on reducing lead time, sample utilization, cost of testing, and drawbacks associated with several technologies has resulted in the development of new technologies such as spectrometry and chromatography. Increased adoption of these technologies is an opportunity for medium- and small-scale laboratories to expand their service offerings and compete with large market players in the industry, as these technologies offer higher sensitivity, accuracy in results, reliability, and multi-contaminant and non-targeted screening with low turnaround time, among other benefits.

The agricultural testing industry is experiencing technological innovations as major players are offering faster and more accurate technologies such as liquid chromatography (LC), high-performance liquid chromatography (HPLC), and inductively coupled plasma mass spectrometry (ICP-MS) for testing the safety and quality of various agricultural samples. These methods are used in the detection of almost all targets to be tested, including pathogens, pesticides, toxins, and heavy metals, among others. Furthermore, chromatography and spectroscopy are increasingly adopted due to higher sensitivity in comparison to other testing technologies and their ability to detect multiple targets simultaneously.

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Why is the adoption of high-end technologies posing challenges for manufacturers in the agricultural testing market?

Instruments and related consumables of high-end technologies such as chromatography and spectrometry used for effective testing of agricultural samples are associated with high costs. Furthermore, an increased focus on R&D activities, coupled with the necessity for accuracy and reliability of readings, increases the costs of these instruments. Since most of these testing instruments are exported in large quantities from developed countries in North America and Europe, it adds to the cost of procuring these technologies, especially in developing economies.

As these technologies are export-oriented commodities, export or import duties are levied on them, further adding to the cost of these products. The price of these testing equipment also differs in different parts of the world, with margins varying from 10% to 30% based on the origin of manufacturing. Additionally, consumables used for testing techniques are expensive, which is further increased by an added labor cost.

Automated testing instruments are equipped with advanced features and functionalities and are thus priced at a premium. For example, the price for spectroscopy-based systems ranges from USD 150,000 to USD 850,000. The estimated cost of the instrument, media, and labor is also very high for some end users. Testing companies require a range of these systems, owing to which the entire capital cost investment increases significantly. Academic research laboratories generally cannot afford such systems as they have limited budgets. In addition, the maintenance costs and several other indirect expenses result in an overall increase in the total cost for the ownership of these instruments. These factors act as challenges for the mass adoption of automated testing technologies in the agricultural testing industry.

Lack of coordination between market stakeholders and supporting infrastructure in developing economies, and improper enforcement of regulatory laws

The agricultural commodities market in developing countries is highly fragmented and is dominated by small farmers and growers who may not have necessarily adopted good agricultural practices, leading to a greater risk of contamination.

Testing of seeds, soil, water, and compost amongst other samples require proper enforcement measures, coordination between market stakeholders, and supporting infrastructure. However, many developing economies are lacking in these aspects, which act as a restraint for the growth of the agricultural testing industry.

Several factors such as lack of equipment and institutional coordination, technical skills, and expertise for the implementation of legislation at grass root levels, and in certain countries, the lack of updated standards, inhibit the market growth for agricultural testing. Furthermore, the lack of basic supporting infrastructure in setting up testing laboratories also acts as a market restraint in the growth of the testing market, especially in developing countries.

Countries such as India, China, and Southeast Asian countries are receiving government assistance for finance and developing technologies. The concerned regulatory bodies of these developing countries should utilize their resources for the development of infrastructure and should focus on technological advancements. However, safety and quality control services require a considerable development of infrastructure and increase in interaction and cooperation between the industry and the government. The lack of these aspects has been hindering the growth of this market in some developing countries.

The various contributors involved in the value chain of agricultural testing market include raw material suppliers, R&D institutes, agricultural testing service providing companies [such as SGS (Switzerland), Bureau Veritas (France), Intertek (UK), Eurofins (Luxembourg)], agricultural testing equipment manufacturing companies, and government bodies & regulatory associations [such as the US Department of Agriculture (USDA), the Food and Drug Administration (FDA), and the European Food Safety Authority (EFSA)].

Target Audience

The stakeholders for the report are as follows:

  • Agricultural & farming industry
  • Farmers
  • R&D institutes & laboratories
  • Agricultural testing service providers and third-party testing & certification laboratories
  • Regulatory bodies
    • The Food and Drug Administration (FDA), the European Food Safety Authority (EFSA), Food Standards Australia New Zealand (FSANZ), the Food Safety Commission of Japan, the Agri-Food & Veterinary Authority of Singapore (AVA) (Singapore), and the Canadian Food Inspection Agency
    • Government agencies and NGOs
  • Component suppliers
    • Reagent manufacturers & suppliers
    • Diagnostic instrument & kit manufacturers/suppliers

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Europe accounted for the largest market share in the agricultural testing market. The dominant share of this region is attributed to the stringency in food safety, environmental, and agricultural regulations and laws pertaining to the nutritional content, chemicals, and labeling. Europe also has the highest number of testing laboratories among all regions. The Asia Pacific market is projected to grow at the highest CAGR from 2017 to 2022 and is driven by China, Japan, India, and Australia; this growth can be attributed to the increase in awareness about food safety norms and implementation of regulations for their testing in these countries.

Lack of coordination between market stakeholders and supporting infrastructure in developing economies, and the improper enforcement of regulatory laws are the major restraints for the growth of this market.

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