On 1 April, China MoA released the drafts of 5 supporting regulations for the newly promulgated pesticide regulation, which were currently under internal consultation among governmental departments including NDRC, MIIT, MPS, MEP, MOFCOM, NHFPC, SAIC, AQSIQ, SAWS, SFDA, SFB (State Forestry Bureau), SGB (State Grain Bureau), GSMC (General Supply and Marketing Cooperative) and all provincial agricultural departments. The 5 supporting drafts will be issued under ministerial regulation, which reflects the regulatory prospects of pesticide regulation, production, marketing, label and manual, as well as the accreditation of pesticide labs: Administrative Measures for the Registration of Pesticide; Administrative Measures for the Production of Pesticide; Administrative Measures for the Marketing of Pesticide; Administrative Measures for the label and Manual of Pesticide; Administrative Measures for the Experimentation of Pesticide Registration; Risk Assessment and Benefit Evaluation as a prerequisite for pesticide registration applications The “Risk Assessment Report” and the” Benefit Evaluation Report” are now required during application. The reports should be fully supported by the product chemical, toxicological, efficacy, ecotoxicological and environmental properties and should help demonstrate the safety, efficacy and economic advantages over registered product.  On the basis of hazard and toxicity of inert ingredient, MoA will maintain updates on the “List of Restricted/Prohibited Inert Ingredients(Adjuvant)”. If the inert ingredient was exclusively used for formulation, additional testing report on the inert ingredient will be required. All registered pesticides are subject to a safety risk surveillance system. Pesticide active ingredients which have been registered for over 15 years will be periodically revaluated by MoA. The number of registrations will be furt

“Decree 677-Regulation on the Administration of Pesticides” was a prelude to more far reaching regulatory/legislative/administrative reform in the Chinese pesticide sector. Comparing current regulations with pending regulations and the drafts of the 5 supporting rules, the impact on pesticide production is foreseeable. Clearer Division of Labor, Centralized Management and Fewer Certificates Under the new system enterprises wishing to engage in pesticide production should firstly notify the MIIT. Depending on the corresponding product quality standard, an enterprise should either apply to the AQSIQ for the production license or apply to the MIIT for the single product production approval. In the past multiple authorities were involved which lead to administrative overlap, redundancy and overall inefficiency. Pesticide Production Management under Chinese Current and New Regulations

China’s new pesticide regulation will take effect on on 1 June 2017 and 5 draft supporting rules have been released for departmental consultation, all of which support the pending new regulation. An analysis on the context, alternation and timeline of the new license requirements and regulations specified in the new pesticide regulation and supporting documents will provide important data to help minimize compliance failures. Pesticide Registration Existing Regulation(old) Data Requirement on Pesticide Registration (MoA order 10) New Regulation(draft) Administrative Measures for the Registration of Pesticide Alternation To be abolished with the effectiveness of new regulation Transitional Term Applications accepted prior to the new regulation will be reviewed under old regulation; Temporary registration issued prior to the new regulation will not be renewed; Note: Detail guidance on the administrative and technical requirements is still needed and MoA would release the supporting document separately Pesticide Production Existing Regulation(old) Rules for implementing the Production license on Pesticide (AQSIQ rules); Measures for the Administration on the Manufacturing of Pesticide-(order 23 of NDRC, being implemented by MIIT) New Regulation(draft) Administrative Measures for the Production of Pesticide; Transitional Term Enterprises that obtained the production license/manufacturing approval prior to the effectiveness of new regulation may continue to produce pesticide before the expiry; Enterprises that want to continue the production after the expiry of

Following the release of the new "Regulations on pesticide administration" in April 1, 2017, the general office of the Chinese Ministry of Agriculture (MOA) released the drafts of 5 supporting regulations for the newly promulgated pesticide regulation. Among them, the data requirements for pesticide registration application have undergone significant changes. Provisions of “Administrative Measures for the Registration of Pesticide (Draft for comment)”: Article 19th  The following application materials and data should be included in the application: test report, risk assessment report, benefit evaluation report, label or manual sample, product safety data sheets, related documents, qualification certificate of the applicant, statement of authenticity of the data. The documents or data cited in the application materials should be marked with the name of the study work, the name of the publication, the volume, the period, the page as well as the number of years, etc. Unpublished documents can be used as support data with the permission of the author. Foreign language materials should be translated into simplified Chinese. Paper documents and electronic documents shall be submitted at the same time. According to Article 19th of “Administrative Measures for the Registration of Pesticide (Draft for comment)”, the new requirements for pesticide registration not only covers traditional test data such as toxicological, efficacy, eco-toxicological and environmental impact, but also increases the data requirements of the risk assessment report and evaluation report for evaluation of pesticide products. This is to ensure conformity with Chinese national standards and uphold the ultimate goal of efficient pesticide management, ensure the quality of pesticides, protection of the quality and safety of agricultural products and the safety of human beings and livestock, as well as protection of agriculture, forestry and the ecosystem. Risk

Biopesticides are certain types of pesticides derived from such natural materials such as animals, plants, bacteria, and certain minerals. For example, canola oil and baking soda have pesticidal applications and are considered biopesticides. From the legislative/regulatory perspective, in China Biopesticide is considered as a type of pesticide category which belongs to biological pest control (kill or inhibit harmful organisms by biological measures). Different countries or regions have different definition and scope of biopesticides. Please refer to the table below for the scope of biopesticide in different countries or regions.

Risk assessment of pesticides has been given higher priority in recent years. Reform of Chinese pesticide regulations has seen increasing restrictions/prohibition place on many pesticides. In terms of the money an enterprise must spend during registration, registering a pesticide for use on vegetables offers no clear economic or market incentives to registrants when compared to registering a pesticide for use on grains. In addition there are no specific favorable policies afforded to pesticides registered for use on vegetables when compared to registering a pesticide for use on minor crops. An analysis of the registration status of pesticides designated for use on vegetables pesticides can help to predict which pesticides will be subject to revaluation and also help reflect the degree of competition in this niche market. Product analysis By then end of 2013, 7,473 formulations of 635 active ingredients/combinations had been registered on vegetable crops, of which 262 are single compound pesticides and 373 are multiple compound pesticides. Usage of these pesticides covers 94 crops and 123 pests/diseases. Insecticides accounted for 59% (4361) of registrations, followed by fungicides (2459), herbicides (469) and PGRs(148).

On February 8nd 2017, the State Council passed the draft of revised Regulation on Pesticide Administration. We forecast the new Regulation on Pesticide Administration will be issued in April or May, 2017. New management measures will come into effect, including Pesticide Production License, Pesticide Registration, Permission of Pesticide Experiment Institutions and Pesticide Distribution Permit. In order to ensure traceability throughout the entire pesticide supply chain, the Ministry of Agriculture will take full responsibility for pesticide production, registration, distribution and application. Our predictions for the new regulation are as follows: Old Regulation Prediction of New Regulation Chapter I General Provisions Article 2 Words like “destroying or wipe out” used in the context of pesticide efficacy were deleted in the new regulation. The aim of pesticide is to prevent or control diseases, pests etc. Pesticide with the ability of destroying or wiping out disease, pests etc. may pose unnecessarily high risk to the environment and human health. The supervision of highly toxic pesticides will be more stringent. Article 2.2 To prevent, wipe out or control storage diseases, pests, rodents and other harmful organisms. To prevent or control storage and processing places diseases, pests, rodents and other harmful organisms. Article 2.6 To prevent, wipe out or control organisms harmful to dikes and dams, railroads, airports, buildings and other facilities. To prevent or control organisms harmful to dikes and dams, railroads, dock, airports, buildings and other facilities. Chapter II Registration of Pesticide Article 7 The pesticide production (including technical material and formulated product

Pesticides are wildly used in agricultural production in China. The use of pesticides affects the environment significantly. Pesticides are introduced to the aquatic ecosystem in a variety of ways such as, leaching, evaporation and precipitation cycles, surface runoff etc. Chinese manufacturers produce a large amount of pesticides every year. Technical material production accounts for about 60% of global production capacity. This article will briefly introduce assessment of risk to aquatic ecosystems in China. Pesticide registration in China is based on tiered assessment whereby increased production volume incurs increased regulatory compliance requirements including the evaluation of pesticide impact to aquatic ecosystems. If primary evaluation is unacceptable, senior assessment is necessary. Environmental risk assessment consists of: Exposure assessment (predicted environmental concentration, PEC) Effect assessment (predicted no effect concentration, PNEC) Risk characterization (risk quotient, RQ). Exposure Assessment Exposure assessment is made up of primary exposure assessment and senior exposure assessment. For primary exposure assessment, a model is used to predict the surface water exposure level in which worst case scenarios are chosen for model parameters. Generally, the PEC is the maximal predicted environmental concentration, or the weighted predicted environmental concentration. For senior exposure assessment, modified parameters or field test data are often used in the exposure model, to find parameters similar to the actual situation. Actual monitoring data of common pesticides is also used as the exposure level. When using a model to analyze the exposure concentration, the areas of use, sites of application and methods of application should be considered to obtain the final PEC. During the exposure analysis, we need to find the appropriate endpoint, including soil adsorption coefficient, hydrolysis half-life, photolysis hal

A double digit decrease in exportation figures and a muted performance from China’s domestic market have reduced the profits of Chinese agrochemical producers; The full chain agronomic services offered by multinationals and domestic distributors have forced the traditional middleman out of the supply chain equation; Rising costs of compliance with China’s EHS regulations has transmitted to the agrochemical industry; Domestic products saw reduced or flat prices while imported products achieved 10 to 20 percentage growth; In 2015, China produced 1.33 million tons of pesticide active ingredients, down from 1.49 tons in 2014. Exportation fell by more than 10% in both volume and value terms. Influenced by complex factors including weather, regulatory policies and changing distribution channels, the domestic usage was slightly lower than expectation at 0.3 million tons, causing Chinese producers to feel the pinch of higher fuel and labor costs. Production and International Trade The largest percentage reduction occurred in herbicide and insecticide categories, decreasing the total production by about 11.7% compared to 2014, representing a 4-year low. Table1- Chinese Pesticide Production in 2015 (a.i., 000 tons)