Wanted: investors in biological control

In recent years agrochemical companies have neglected the opportunities presented by biopesticides. David Dent and Jeff Waage examine what can be done to promote this under-developed market in a sustainable way.

For many years the prospect of chemical insecticides being replaced by biopesticides (insecticides based on host specific pathogens; bacteria, fungi, viruses, nematodes and protozoa) has provided a vision of more environmentally friendly and safer pest control. However, there is still little evidence of this vision becoming a reality. Although the majority of biopesticide sales are of Bt (totalling US$119 million), this is only a small proportion of the global insecticides market estimated at $8 billion in 1995(1). Despite this, a biopesticide market of $71 million in 1991 grew by 68% to reach $119 million in 1995. With the introduction of new technologies, the growth of the biopesticide market is now expected to exceed $141 million in the year 2000(2).
    However, there are reasons to question these figures. Commercial companies have for the last 10 years consistently overestimated the market size for biopesticides. In 1991, the analysts had predicted the market to be worth $129 million, when it actually reached only $71 million (a 41% overestimate). In 1993, market forecasts predicted a value of $380 million and yet in 1995 it was still only worth $119 million, a 70% overestimate. The predictions for the year 2000 and beyond are even more fanciful. If it is assumed that the estimates produced by the industry are based on genuine expectations and are not just produced to maintain shareholder confidence, then it would seem reasonable to ask: what are the reasons for this failure of biopesticides to live up to their market potential? A number of reasons have been given for this:

• There was an expectation in the late 1980’s and early 1990’s that multinational agrochemical companies would take a lead in product development which would overcome a number of technological constraints; this never materialised(3).

• In the rush to push biotechnology, there was over-investment from venture capital initiatives in biopesticides that could not be realised(4), again because of certain technological constraints.

• Lack of patent protection(5).

• Weak products on the market with poor efficacy and questionable quality control(6).

• The pursuance of an inappropriate model for biopesticide development, manufacture, distribution and sale(7).

The technological constraints do not represent an insurmountable barrier to biopesticide development and can largely be overcome through a multidisciplinary team approach(8,9). Better product development will, to some extent, also address the issue of weak products and poor efficacy. Of greatest concern are the issues of poor quality control and the continued use of an inappropriate model for biopesticide manufacture, distribution and sale. An agrochemical centralised manufacture, distribution and sales model (see Figure 1A) used for chemical insecticides with a long shelf life, stability under a wide range of storage conditions, broad spectrum in effect and hence have an extensive range of target pests, is not suitable for biopesticides. These products, which are based on living organisms, are target specific and have a poor shelf life so that production is “on demand”, tend to be more suited to smaller regional/local markets. In such situations, different models of manufacture, distribution and sales may be required:

• a single company may need to subcontract production, marketing and sales to locally based contractors able to produce different mixes of biopesticides based on local pest specific isolates (Figure 1B)

• a single company can franchise production, marketing and sales (Figure 1C)

• meeting locally diverse markets may depend on a number of small companies each producing a portfolio of pest specific biopesticides using local isolates (Figure 1D).

Figure 1. Manufacture, distribution and sales models for pesticides. A: Single company, manufactures product at a central location and distributes globally. B: Single company sub-contracts production, marketing and sales at place of market. C: Single company franchises production, marketing and sales, and product distributed to local markets. D Multiple companies, product manufactured at many locations and distributed regionally.

As the multinational agrochemical companies pull out of biopesticides and concentrate on biotechnology, a number of highly flexible, responsive small companies are being set up which more closely fit these different models and provide an excellent opportunity for biopesticides to exploit insecticide markets than has previously been the case.

Biopesticides as substitutes for chemical insecticides
Biopesticides have, in developed countries, been marketed as a biological product in direct competition with chemicals, which tend to be cheaper, easier to use and more reliable(10). However, increasingly, markets for biopesticides are becoming available as the agrochemical industry adapts to the problems of chemical insecticide resistance, re-registration of insecticides and changing public attitudes to insecticide use.
    At the present time, insecticide resistance is a problem reaching crisis proportions on a world-wide scale(11). Resistance to one or more pesticides has been documented for more than 500 species of insects and mites. The lost usefulness of chemical pesticides through resistance opens up new markets and opportunities for biopesticides such as Bt.
    Agrochemical manufacturers are only prepared to invest time and money in registering insecticides that have the potential for high-volume sales. Demands by national pesticide registration regulations for periodic reviews of active ingredients, combined with increases in development costs of pesticides, often make it unprofitable for agrochemical companies to register products for minor crop use or to maintain the larger number of formulations specific to different countries(12). The consequence is that minor crops frequently have no chemical options available for pest control, so alternatives such as biopesticides need to be found(13).
    A general decline in the use of chemical pesticides may occur in the main US and EU markets. Factors in favour of biopesticides as alternatives to chemicals include consumer preferences for pesticide-free produce and a growth in the market for organic or reduced-pesticide products; the development of more sustainable agricultural systems using integrated pest management (IPM) programmes; the stabilisation and harmonisation of regulations governing registration of biopesticides; and the presence of many more companies in the biopesticide business(14).
    Certainly the agrochemical industry is aware that the environmental concerns of the general public are shaping the future of pesticide markets. These concerns are manifest in a demand by retailers for quality standards in pest control that are leading to traceability of produce from the farmer through the distribution and storage systems to the retailer. It will be this traceability, combined with the availability of simple and cheap residue diagnostic tests that will influence chemical pesticide markets in the future. Market opportunities for biopesticides should increase on the basis of this.

Markets where biopesticides have a competitive edge 
At present, biopesticides have a competitive advantage in small markets (ca. £50,000 per annum), where demand for biopesticides is present and competition from conventional chemicals is limited(15). Most currently registered products for insect control are produced in developing countries, and include 104 products on the market (mostly Bt), nematodes (44 products), fungi (12 products), viruses (8 products) and protozoa (6 products)(16). Commercialisation in developing countries is limited but growing.

Trainees in the Cameron Highlands, Malaysia, collecting diamondback moth larvae from insecticide treated and untreated cabbage plots in order to assess effects on key natural enemies. Photo: Stephanie Williamson

Research targets misplaced
Development of biopesticides today by the multinational pest control industry exploits, by and large, the functional but not the numerical response of living natural enemies(17). Products such as Bt or entomophilic nematodes are sensitive to environmental conditions and will not persist if exposed to UV light or low humidities respectively. But even for organisms which have the potential for persistence and the compounding benefits of numerical responses, such as viruses and fungi, commercial development still favours the traditional chemical pesticide model involving a quick kill, low persistence and frequent application. Thus we see considerable research aimed at increasing the speed of kill of biopesticides, the ecological consequence of which is to reduce persistence and reproduction(18).

Threats to the bio-markets
The threats to the Bt and biopesticides markets come from the increasing incidence of resistance to Bt, the use of transgenic crops utilising Bt genes and the development, manufacture and sale by the agrochemical industry of safer chemical insecticides.
    Resistance to Bt has been slow to develop, probably due to a combination of low product use and short persistence, which has limited selection pressure. However, increasing sales have led to resistance in some pests, most notably in the diamondback moth (Plutella xylostella) in South East Asia(19) with Bt subspecies kurstaki. There is also concern that resistance is developing to Bt subspecies aizawai in Malaysia(20).
    Another major threat to the Bt market as a foliar spray, comes from the use of transgenic crops expressing Bt toxins. This could occur in two ways, firstly Bt transgenic crops my replace foliar application of Bt in a number of key markets such as cotton, tomatoes and potatoes(21) and secondly there is a real risk that the widespread use of such transgenic crops will accelerate the development of pest resistance to Bt; all of which would result in a decline in the market for this product.
    The agrochemical industry has over the last 10 years been responding to public concerns about chemical pesticide use by reducing volume application rates and amounts of active ingredient. In addition, there has been a move towards molecules that are more selective (non toxic to beneficials and other non-target organisms), safe (low human toxicity), and environmentally friendly (less persistent). These are the same characteristics that are associated with the benefits of biopesticides and hence represent another serious threat to the future of biopesticides.

References
1. Wood McKenzie Consultants Ltd., Agricultural Biotechnology Report No.120, Edinburgh, 1995.
2. R. Georgis, Commercial prospects of microbial insecticides in agriculture. In: Microbial Insecticides: Novelty or Necessity. BCPC Symposium Proceedings, 1997, 68:243–254.
3. Ibid.
4. Op. cit. 2.
5. J.G. Harris, Microbial Insecticides—an industry perspective. In: Microbial Insecticides: Novelty or Necessity. BCPC Symposium Proceedings, 1997, 68:41–50.
6. Ibid.
7. J.K. Waage, Biopesticides at the crossroads: IPM products or chemical clones? In: Microbial Insecticides: Novelty or Necessity? BCPC Symposium Proceedings, 1997, 68:11–20.
8. D.R. Dent, Integrated Pest Management and Microbial Insecticides. In: Microbial Insecticides: Novelty or Necessity. BCPC Symposium Proceedings, 1997, 68:127–138.
9. D.R. Dent, Development and use of a biopesticide, Proceedings of the EMPRES Regional Workshop on Biological Control of Desert Locust, 27–29 August 1999, Cairo, Egypt, Food and Agriculture Organisation, 1999.
10. R. Quinlan, Biotechnology: the last hope for entomopathogenic fungi. In: Fundamental and applied aspects of invertebrate pathology (eds. R.A. Samson, J.M. Vlak, D. Peters), Society of Invertebrate Pathology, 1986, 607–610.
11. L.G. Higley, M.R. Zeiss, W.K. Wintersteen and L.P. Pedigo, National pesticide policy: a call for action, American Entomologist, 1992, 38:139–146.
12. Agrow World Crop Protection News, US EPA Official warns of OP losses, PJB Publications Ltd., 1997, 298:12.
13. G.M. Tatchell, Microbial insecticides and IPM: current and future opportunities for the use of biopesticides. In: Microbial Insecticides: Novelty or Necessity? BCPC Symposium Proceedings, 1997, 68:191–200.
14. S. Lisansky, Microbial biopesticides. In: Microbial Insecticides: Novelty or Necessity? BCPC Symposium Proceedings, 1997, 68:3–10.
15. Op. cit. 2.
16. S. Lisansky, Crop Protection without chemicals: the present and future of biopesticides. In: World Agriculture (ed. A. Cartwright), Sterling Publications, 1993.
17. Op. cit. 7.
18. M. Thomas and J.K. Waage, Integration of biological control and hostplant resistance breeding. CTA and CAB International, Wallingford, 1996
19. J.G. Harris, The efficacy of different strains of Bacillus thuringiensis for diamondback moth control in South East Asia, and their strategic usage to combat resistance to chemical insecticides, especially acyl urea compounds. In: Bacillus thuringiensis Biotechnology and Environmental Benefits, T-Y Feng et al. (eds.), Hua Shiang Yuan Publishing Co., Taipei, Taiwan, 1995, 1:259–268.
20. D.J. Wright, M. Iqbal, F. Granero and J. Ferre, Resistance mechanisms to Bacillus thuringiensis (Bt) subsp. kurstaki and Bt subsp. aizawai in a multi-resistant field population of diamondback moth from Serdang, Malaysia. Proceedings of the Third International Workshop on the Management of Diamondback Moth and Other Crucifer Pests, 1996.
21. Op. cit. 5.

David Dent is Programme Leader for the Bio-pesticides Programme, CABI Bioscience, Silwood Park, Ascot, Berks SL5 7TA, UK.

[This article first appeared in Pesticides News No.45, September 2000, pages 10-11]