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I. Abstract

Biopesticides refer to products made from natural sources such as animals, plants, and microorganisms, including ''natural ingredient pesticides,'' ''microorganism pesticides'' and ''biochemical pesticides.'' In general, biopesticides are safer and less toxic to humans and animals than chemical pesticides. Moreover, biopesticides will not endanger birds or other non-target animals, which make them safer to the habitat and environment. Biopesticides applied onto pests and weeds have prevention target specificity. Disease prevention using biopesticides not only prevents bacillus subtilis, but also fosters crop growth and immunity, as well as the diversity and natural balance of the microorganism's environment and habitat.

The development of biopesticides in Taiwan is still in the initial stage. Farmers have long been used to using conventional pesticides while the effect of chemical pesticides is faster. Today, biopesticides represent a limited share of the overall pesticide market and is mostly imported from abroad. There are about 15 types of biopesticides already registered, with annual sales volume of roughly 30 million. Of this, the main product, Bacillus thuringiensis, Bt pesticides, has annual sales volume of about 13 million, accounting for 43%. However, research sources in Taiwan regarding biopesticides are rather abundant. The National Science Council (NSC), Council of Agriculture (COA), the Development Center for Biotechnology (DCB) along with various colleges and universities all have related research projects. The Council of Agriculture has commissioned National Chung Hsing University to complete R&D on the mass production and production techniques of bacillus subtilis and actinomycetes microorganism fungicide. This technology has already been transferred to five manufacturers. The technology transfer by the DCB of the bacillus subtilis fungicide has already been registered and approved to be marketed.

With the worldwide policy toward reducing pesticide usage and wave of heated research on biopesticides, the marketing and sales volume of wide effective biopesticide products has gradually grown each year. In addition, as people's quality of living improves, organic vegetable and fruit farmers have an increasingly growing demand for biopesticides. Quite a few local biotech companies have already jumped into the biopesticides industry. Forecasts predict that within 3 years, 5 to 6 different types of local microorganism pesticides can be research and developed in Taiwan, estimated to increase its production volume to 150 million. The development of biopesticides should be the future trend in pesticide development.

II. Industry Definition and Scope

Biopesticides refer to products made from natural sources such as animals, plants, and microorganisms, including ''natural ingredient pesticides,'' ''microorganism pesticides,'' ''biochemical pesticides'' and microorganism pesticides created from genetic engineering techniques. The biopesticide industry that this study discusses will focus mainly on natural ingredient pesticides and the local microorganism pesticide industry. Toxic microorganisms extracted through fermentation such as antibiotics or Abamectin and spinosad are all excluded.

III. Industry Overview

(1) Industry structure

1. According to The Pesticide Regulation Law, a pesticide permission certificate is required for the importing, manufacturing and selling of biopesticides while biopesticide manufacturers need to apply for the registration of their pesticide factory. Currently there are about 200 pesticide importers and 50 manufacturers in Taiwan. Biopesticides still represent a very limited share of the overall pesticides market. Most of it is imported, with about 15 importers and 10 manufacturers. Roughly 15 different various ingredients have already been registered, including ''natural ingredients'' such as pest controlstevioside and azadirachtin, ''microorganism pesticide'' such as Bacillus thuringiensis (Bt), bacillus subtilis and ''biochemical additives'' such as spodoptera exigua Pheromone, spodoptera litura Pheromone, etc. Annual sales volume of biopesticides amounts to approximately NT$13 million each year. Of this, annual sales of Bt pesticide amounts to NT$13 million. In the future, biopesticides should focus on the development of local microorganism pesticides.

 (1) In the ''Action Plan for Biotechnology

Industry'' drafted by the Executive Yuan in 1995, biopesticides was chosen as one of the five main biotech items to be developed. Domestic research resources for biopesticides are rather abundant. The National Science Council, Council of Agriculture, the Development Center for Biotechnology along with various colleges and universities all has related research projects. The Council of Agriculture has commissioned National Chung Hsing University to complete R&D on the mass production and production techniques of bacillus subtilis and actinomycetes microorganism fungicide. This technology has already been transferred to five manufacturers. The technology transfer by the Biotech Center of the bacillus subtilis fungicide has already been registered and approved to be marketed. Forecasts predict that within 3 years, 5 to 6 different types of local microorganism pesticides can be research and developed in Taiwan.。

 (2) The companies in Taiwan that conduct R&D on biopesticides can be divided into two types, one type are companies that were conventional chemical pesticide companies and have converted to R&D, and the other type are biotech companies that own related technology, as described in Table 1. With the promotion of organic farming in recent years, organic vegetable and fruit farmers have an increasingly growing demand for biopesticides. There has been an increase in the number of biopesticide R&D manufacturers. Some R&D on their own, others collaborate with academia or accept technology transfer from the results of R&D conducted by the government. Today, the industry is mostly made up of biotech companies that have proactively jumped into biopesticides. Presently there are about 12 companies that still need to apply for pesticide factory set up registration. Meanwhile, the majority of Taiwan's pesticide companies do not have the concept of R&D. Therefore, although there is pesticide factories already registered, investment willingness is low, with only 4 companies today.

Of the biotech companies that are developing biopesticides, Bion Tech Inc.'s ''Posh'' not only is domestically developed, but is also the only biopesticide that has obtained the pesticide permission certificate. This product was a transfer bacillus subtilis technology from the Development Center for Biotechnology to Kuang Hwa Chemical Co., Ltd. In July 1999, the product received the first legally registered production permission certificate for an agricultural use biopesticide that was developed in Taiwan. Kuang Hwa Chemical Co., Ltd. thereafter founded Bion Tech Inc. in 2002 to concentrate on R&D, manufacturing and marketing biopesticides.

Table 1: Companies in Taiwan Researching Biopesticides

Company Name Paid-in Capital(NT$M) Main Development Product Technical Source
Sinon Corporation 3,572.73 Bacillus Subtilis, Actinomycetes COA/Chung Hsing University
Yfy-Bio Technology Co., Ltd. 50 Bacillus Subtilis, Actinomycetes COA/Chung Hsing University
King Car Biotechnology Industrial Co., Ltd. 530 Biology Additives Chung Hsing University
Taiwan Salt Biotech Factory 2500 Bacillus Subtilis, Actinomycetes COA/Chung Hsing University
Gene Agri Aqua Ecosystem Biotec Co., Ltd. 120 Trichoderma Self Development
World Growth Process And System Engineering/ Biotechnology Co., Ltd. 8 Entomogenous (Insect Pathology) Mycology Self Development
Hui Kwang Chemical Co., Ltd. 489.59 Bacillus Subtilis, Actinomycetes COA/Chung Hsing University
Syngen Biotech Co., Ltd. 400 Biopesticide Self Development
Analytica Biopharma Corp. 114 Nucleopolyhedrovirus(NPV) Analytica Therapeutics
Bion Tech Inc. 260.2 Bacillus Subtilis,has obtained Pesticide Permission Certificate: Nung-Yao-Chih-Tze No. 04764 DCB/ Kuang Hua Chemicals
Taiwan Biological Research Corp. 20 Bacillus Subtilis, Actinomycetes COA/Chung Hsing University
Safe Protecta Technology Co., Ltd. 10 Spodoptera Exigua / Spodoptera Litura Baculovirus, and Steinernema Carpocapsae Self Development
Taiwan Fertilizer Co., Ltd. 9,800 Bacillus Thuringiensis, has obtained Manufacturing Permission But Has Ceased Production DCB

Jia Non Enterprise Co., Ltd.
10 Bt Self Development
Nantex Industry Co., Ltd. 2,264.78 Bt National Tsing Hua University, National Dong Hwa University, Council Of Agriculture

Data Source: COA, arranged by DCB ITIS Project

IV. Market/Product Analysis

(1) Worldwide market

In recent years, the downturn in the global economy and policies in the advanced nations to decrease the use of pesticides has led to a slight decline in growth of the worldwide pesticide market. According to a survey by the UK Crop Protection Association, in 2001, the worldwide sales of pesticides amounted to US$27.1 billion, a decrease of 6.6% from US$29.0 billion in 2000. In terms of location, pesticide markets are mostly concentrated in North America (29.6%), Asia (25.4%) and Western Europe (21.9%). In Asia, the sales of pesticides are greater than the sales of human consumption medicine. Therefore, from a location perspective, developing pesticides in Asia is more of a niche than developing human consumption medicine. In terms of pesticide application, at present, weed control represents 40% ~ 50% of the world's pesticide market, while insecticides account for 30% of the world market, and bacteria killers fungicide take up 20%.

Agrow magazine points out, the worldwide production of biopesticides in 2000 was close to US$160 million. Of this, Bt (Bacillus thuringiensis) biopesticides accounted for more than 90%. Although the worldwide pesticide market is in decline, but under the future integrated pest management (IPM) concept, it is predicted that the biopesticide market will grow significantly. In Europe and the U.S., many new wide effect pesticide products have already hit the market and sales volume has increased annually. According to Chuck Benbrook Consulting Company's forecast, after 2013, genetically modified crops and biology additives will increase significantly at 7.5 times and 5 times, respectively. As of the end of 2001, 195 different biopesticide effective ingredients, roughly 780 different products have already been marketed. In addition, insecticides made from spinosad, the mass volume fermentation of Saccharopolyspora spinosa, can prevent damage from various lepidoptera. However, because of its toxicity towards bees and the nervous system, it had to follow the approval regulations for chemical pesticides and not biopesticides. However, the U.S. has already recommended it as an IPM product and thus future sales are unlimited. In Taiwan, it has also been registered for application against plutella xylostella (linnaeus).

(2) Domestic market

According to statistics from the Council of Agriculture, in 2001, the sales volume of pesticides in Taiwan was approximately NT$5.2 billion, a drop of NT$5.4 billion from 2000. Pesticides, bactericides, and weed killers account for 40%, 27%, and 27% of the total market, respectively, while other repellents represent 6% of the market. After entering WTO, it is predicted that total sales of pesticides in the domestic market will possibly continue to decline.

The biopesticide industry is still in its initial stage in Taiwan, relying mainly on imports from abroad. According to 2001 figures from the COA, the annual sales volume of biopesticides is around NT$30 million. Of this, microorganism pesticides (Bt insecticide) account for NT$13 million (43%), and growth regulators ''gibberellic acid'' roughly NT$10 million (33%). In addition, antibiotics bactericide account for NT$50 million, while the import sales volume of the newly registered spinosad insecticide is about NT$22 million, which is much more than the production value of Bt.

In recent years, the government has facilitated the R&D of biopesticides. Furthermore, the demand for biopesticides by organic fruit and vegetable farmers has increased, which will expand the market for local microorganism pesticide products. It is expected that within 3 years, R&D can be completed for 5 ~ 6 different types of microorganism pesticides and its production volume increased up to NT$150 million.

V. Technical Analysis

(1) Current technology situation

Within the industry, the development and manufacturing of local biopesticides is still in its initial stage. Currently, the technology for mass production and manufacturing techniques for Bt, bacillus subtilis, nuclear polyhedrosis virus, actinomycetes, baculovirus and Steinernema carpocapsae already exists. Among this, the technology transfer by the DCB to Kuang Hua Chemicals for the bacillus subtilis fungicide has received Taiwan's first domestically manufactured biopesticide production permission certificate.

In terms of academic research, at present, projects and research relating to local microorganisms such as nuclear polyhedrosis virus, Bt, bacillus subtilis, streptomyces saraceticus, trichoderma, gliocladium virens, pseudomonas fluorescens, verticillium lecanii, verticillium lecanii, metarhizium anisopliae, beauveria bassiana, nomuraea rileyi and paecilomyces are being conducted as well as fermentation mass production, additives formulation formula techniques and its toxic/pathogenicity testing.

In terms of mass production, the current ''Agricultural Biotech National Technology Phase 1 Project'' has invested in the and integration of a pilot production plant related facilities. The completed pilot production plant prototype already can support the fermentation mass production research demands for microorganism Biomass. The COA, in its ''Biopesticide R&D and Production Facilitation Project,'' has commissioned universities to develop the fermentation mass production technology for disease prevention microorganisms such as bacillus subtilis, actinomycetes, gliocladium virens, trichoderma and pseudomonas fluorescens, as well as insect damage prevention microorganisms such as metarhizium anisopliae, nomuraea rileyi. Among this, bacillus subtilis and actinomycetes can prevent the incidence of soil-borne diseases and over-ground diseases. This technology has already been transferred to five companies. Moreover, through a collaborated project between industry and academia, R&D has been completed to reorganize the insect-specific baculoviruses pesticides and steinernema carpocapsae insect pesticides.

In addition, the Pesticide Department of the COA has completed R&D for the mass production technology of nucleopolyhedrovirus (NPV) of spodoptera exigua and spodoptera litura, the fermentation mass production technology for bacillus thuringiensis endotoxin and bacillus thuringiensis (BT), as well as the container bag (space log) mass production technology for entomogenous (insect pathology) mycology. The DCB has completed the development of Bt, Steinernema carpocapsae and bacillus subtilis biopesticides, with the technology transferred to Taiwan Fertilizer and Ubi-Asia/Taiwan Biotech Co., Ltd., Fulon Chemical Industrial Co., Ltd. Kuang Hwa Chemical Co., Ltd.

(2) R&D trend

Table 2. Application Development Trend Biopesticides

Biopesticide Type Development Trend
Weed Killer Fungi herbicide (Alternaria, Chondosterum, Cephalosporium, Colletotrichum, Fusarium, Puccinia Phytophthora), bacteria herbicide (Pseudomonas, Xanthomonas)
Insecticide Bacillus thuringiensis, Bacillus popilliae, Beauveria bassiana, Metarhizium anisopliae, Tang's hirsutella thompsonii, Verticillium lecanii, Autographa Californica nucleopolyhedrovirus, Acmnpv, Nucleopolyhedrovirus (NPV) of spodoptera exigua and spodoptera litura, Laspeyresia pomonella (linnaeus) granulosis virus, Nucleopolyhedrovirus (NPV) of helicoverpa armigera, Nosema locustae, Steinernema carpocapsae. Insect sex pheromone . Saccharopolyspora spinosa.
Bactericide Fungi fungicide (Ampelomyces, Candida, Coniothyrium, Fusarium, Gliocladium, Phlebia, Pythium, Trichodera and Verticillium)
Bacteria fungicide (Agrobacterium, Bacillus, Burkhoderma, Aspergillus, Pseudomonas, Erwinia, and Streptomyces)

 

(3) Regulation policy

1. The U.S. Environmental Protection Agency has established guidelines for the quick approval of biopesticides. Most pesticides require 3 ~ 4 years after registration to receive approval, but under the fast speed preferential approval process for biopesticides, the approval period is greatly shortened. This is beneficial to the development speed of biopesticides. Today there are 195 different biopesticide effective ingredients, roughly 780 different products have already been marketed.

2. According to Taiwan's Pesticide Control Law, biopesticides also needs to apply for pesticide usage registration, including conducting domestic field testing and safety toxicity/biomedical information audit. In order to simplify and accelerate the registration process, the toxicity/biomedical information for ''natural ingredients'' and pesticides that are not directly applied to the vegetation, such as the Pheromone ''biochemical additives'' has already been simplified and provided free of charge. As for microorganism pesticides, Taiwan has referred to the regulations in Europe and the U.S. by establishing the ''toxicity/biomedical testing Information Factors for Agricultural Use Microorganism Pesticides.'' Furthermore, it has simplified the toxicity/biomedical information for domestically manufactured microorganism pesticides, requiring information on acute oral toxicity/pathogenicity or pulmonary toxicity/pathogenicity is provided. As for field testing requirements, since biopesticides, and especially microorganism pesticides, usually have a specific prevention target, therefore, domestic field-testing must be conducted for all biopesticides. Today there are 15 different biopesticide effective ingredients, roughly 80 different products have already been marketed.

(4) Domestic talent resources analysis

1. 67 persons in R&D

    (a) About 14 persons in the COA Pesticide Research Institute, 2 persons in the Agricultural Research Institute, and 1 person at the Kaohsiung Agriculture Research And Extension Station.

    (b) 50 persons at schools and other institutions

2. 90 persons in manufacturing (including production and management)

    (a) 20 persons in the COA Pesticide Research Institute

    (b) 10 persons at colleges and universities

    (c) 40 persons in biotech companies

    (d) 20 persons in pesticide factories

VI. Technical Analysis

(1) SWOT analysis

Biopesticide industry SWOT analysis as follows:

Strength Weakness

* Located in tropical and sub-tropical areas, 2/3 of the area is mountains, has highly complex microorganism resources.

* Rich academic related research resources, plenty of talent, already has many R&D products being mass produced.

* R&D local microorganism pesticides, product has uniqueness and competitiveness.

* Abide with government's policy to reduce use of chemical pesticides and its biotech industry policy, simplify the registration of local microorganism pesticides to accelerate time to market.

* Prevention of soil spread diseases, chemical prevention difficult, and biopesticide application effect clear, great business opportunities.

* Farmers' association, production and sales channels close relationship with farmers.

* Usage method and effect of biopesticides are all different, farmers' acceptance still not popular,

* Regulations for biopesticide plants are different from chemical pesticide plants, still insufficient.

* Research between industry and academia unable to closely join together.

* Businesses unwilling to invest.

* The stability technique for microorganism product's additives still needs to be researched and improved.

* Insufficient knowledge property protection.

Opportunity Threat

* In order to enhance competitiveness, development of organic agriculture is a natural trend; biopesticides will play an important role in the industry.

* Can prevent impact on environment when using local fungi (strain) for biological prevention, hence developing local biological additives is even more important and needed.

* Related R&D companies of small scale, unable to compete with foreign manufacturers.

* Pesticide makers lack R&D concept.

* Dumping of cheap biopesticides from Chinese mainland.

 

(2) Current development bottlenecks

Since farmers' usage is still unpopular, manufacturers are not promoting it aggressively, therefore, the pesticide industry in Taiwan is still in the obtaining dealership and vending rights as well as going after short-term profits. They have no concern or ability for R&D. In addition, based on Pesticide Control Law, biopesticides still needs to be applied for permission and pesticide plants must be registered for establishment. Due to the hazard of pesticides, county and city governments are strict on the registration of setting up biopesticide plants. Of the 17 domestic manufacturers involved in R&D, only 5 have pesticide plants have obtained establishment registration while most biotech companies still have not obtained registration permission. This has led to the situation where there is a lot of heated academic research and projects, but products being slow to the market. In the future, there is a need to rely on the government to integrate education and loosen the regulations for setting up biopesticide plants. In addition, support the development of quality agriculture, set up related policies (e.g. consultation, agricultural contract (deed and lease), etc.), and create demonstration farms to attract the participation of businesses and usage by farmers, advancing and promoting the development of biopesticide products.

VII. Current Industry Policy

(1) Research direction

1. Select and improve local and safe microorganisms that have industry application value to develop biology additives for protecting plants.

2. Improve the biopesticide mechanism-of-action research and mass production formula techniques; enhance test mass production of additives's product value and global competitiveness.

3. Conduct related projects or research on local microorganisms including nuclear polyhedrosis virus, bacillus subtilis, streptomyces saraceticus, trichoderma, gliocladium virens, pseudomonas fluorescens, metarhizium anisopliae, beauveria bassiana, nomuraea rileyi and paecilomyces.

4. Target microorganism and biology additive toxicity/biomedical, microorganism's antagonism gene, selection and transformation of anti disease and pest resistant genes as well as transplant applications.

5. Create experiments on the toxicity/ pathogenicity of microorganism pesticides.

(2) Consultation strategy

1. The Industrial Development Bureau, Ministry of Economic Affairs has placed the microorganism insecticide and microorganism bactericide industry as key new upcoming strategic development industries. Sections which are categorized as manufacturing industry and technical service industry can be given related preferential tax treatment. In addition, leading innovation products can be used to develop facilitation projects for consultation and assistance.

2. The COA invests about NT$15 million each year. Going forward, it will continue to R&D local microorganism pathogenic fungi that are safe on vegetation, easy to fermentation mass produce, are widely applicable, and competitive in the global marketplace.

3. ''Organic Agricultural Products Production Guidelines'' has listed pest control biopesticides as a microorganism material that needs to be reviewed. The COA, in its ''Advancing Into The 21st Century New Agriculture Proposals'' has used biopesticides to enhance the quality of agricultural products.

4. Facilitate the use of biopesticides through collaboration projects between industry and academia; promote the concept of organic agriculture to farmers.

(3) Review of current policies

1. According to Taiwan's Pesticide Control Law, biopesticides also needs to apply for pesticide usage registration, including conducting domestic field testing and safety toxicity/biomedical information audit. In order to simplify and accelerate the registration process, the toxicity/biomedical information for ''natural ingredients'' and pesticides that are not directly applied to the vegetation, such as the Pheromone ''biology additives'' has already been simplified and provided free of charge. As for the required toxicity/biomedical testing information for microorganism pesticides, Taiwan has simplified the toxicity/biomedical information for domestically manufactured microorganism pesticides, requiring information on acute oral toxicity/pathogenicity or pulmonary toxicity/pathogenicity is provided. The COA has already amended the law for natural ingredient pesticides, considering removing its registration process. However, the amendment was sent back after sitting for 2 years in the Legislative Yuan. The COA is now revising the Pesticide Control Law based on the administrative procedure law.

2. Although the current ''Pesticide Factory Establishment Standard'' has already simplified the facilities required by a biopesticide factory, however, county and municipal governments still use the definition applied to general chemical pesticides to define the factory environmental facilities for biopesticide factories. In order to encourage biotech companies to develop biopesticides, the COA has started to deal with this problem by amending the factory establishment standards for pesticide factories and simplifying the requirements needed to set up a biopesticide factory.

3. Today, biopesticides need to obtain a permission certificate before it can be marketed, but biofertilizers do not need to be registered. Therefore, a few opportunistic businesses are selling the microorganism bactericide that they researched and developed as biofertilizer or vegetation nutrients. This has affected the investment willingness of legitimate businesses.

4. In order to develop the future exporting of biopesticides, presently, only the DCB has obtained laboratory certification for toxicity/biomedical testing from the CNLA. It is recommended that the Pesticide Research Institute can obtain the laboratory certification for toxicity/biomedical testing as soon as possible in order to assist businesses receive toxicity/biomedical testing reports on microorganism pesticides that meet GLP requirements.

5. The government's supplement to R&D agencies and colleges is inadequate and dispersed. As the source of funding comes from various different units, research topics are often overlapped. Moreover, researcher's unwillingness to collaborate leads to slow findings and difficulty in commercializing the research results.

 
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