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Gu Zongqin: Challenges and Opportunities Coexist in the Development of High-Efficiency Fertilizers in China. Author/Source: Sinochem News Network. Date: June 1, 2023. Clicks: 39. At the 2023 National Forum on the Development of High-Efficiency Fertilizer Industries and the Promotion of Fertilizer Traceability System Construction, held in Meishan, Sichuan from May 31 to June 1, Gu Zongqin, president of the China Nitrogen Fertilizer Industry Association, pointed out that fertilizers are important agricultural production materials and serve as a crucial support for ensuring food security and building a strong agricultural country in China. At present, China’s fertilizer industry still faces prominent issues such as structural overcapacity, a mismatch between supply and demand, a low proportion of high-efficiency fertilizer products, and a low level of development in the industrial chain; thus, the high-efficiency fertilizer industry is confronted with both challenges and opportunities. WeChat Image_20230601135813.jpg Gu Zongqin pointed out that although China has a solid foundation for the development of high-efficiency fertilizers, the competitiveness and reliability of its industrial and supply chains remain low, and the country still faces many challenges in the future. The main challenges include five aspects: low security in the industrial supply chain for high-efficiency fertilizers, insufficient innovation drivers within the industry chain, key technologies that still need to be developed and overcome, uneven product quality, and difficulties in market supervision. Gu Zongqin explained that in 2022, the prices of basic fertilizer products such as nitrogen, phosphorus, and potassium in the international market rose significantly. China is dependent on imports for potassium fertilizers, and their prices remain high due to influences from the international market. Nitrogen and phosphorus fertilizers also have high prices driven by the costs of raw materials such as coal, natural gas, sulfur, and phosphate rock, resulting in supply shortages in certain periods. Since the second half of last year, both the international and domestic markets have cooled down, leading to a gradual decline in the prices of basic fertilizers such as nitrogen, phosphorus, and potassium. The sharp fluctuations in the prices of basic fertilizer products such as nitrogen, phosphorus, and potassium have increased the operational risks for companies that produce high-efficiency fertilizers, and they have also disrupted the production of such fertilizers. Some companies that produce basic fertilizers suspend or even abandon the production of high-efficiency fertilizers because they earn substantial profits from basic fertilizers and do not need to engage in market promotion ； Some secondary processing enterprises withdraw from the market due to their inability to keep up with market trends and weak risk management capabilities, which results in operational losses; other enterprises reduce the production of high-efficiency fertilizers because they cannot obtain the necessary raw materials. Gu Zongqin pointed out that over the past decade, China’s fertilizer industry has entered a period of transformation and development ； In terms of changes in the number of enterprises, there are currently 522 enterprises engaged in raw material extraction, around 460 enterprises involved in primary processing, and about 5,760 enterprises engaged in secondary processing. In total, approximately 6,740 enterprises in this industry are involved in fertilizer production. The structure of China’s fertilizer industry chain takes on a pyramid shape, with relatively concentrated upstream enterprises and relatively dispersed downstream enterprises. At present, the development of high-efficiency fertilizers in our country is primarily driven by demand, with the driving force for innovation in such fertilizers weakening as it moves from the downstream to the upstream sector. The downstream enterprises are mainly small and medium-sized enterprises, and they are in a weaker position compared to the upstream enterprises, making it difficult for them to drive collaborative innovation with the upstream parties. For example, downstream companies need a raw material fertilizer to produce high-efficiency fertilizers, but since these companies are small, a small order is not enough to motivate larger firms to invest in the necessary technological upgrades. Gu Zongqin believes that the development of high-efficiency fertilizers in our country is still in its initial stage, with issues such as high production costs, product homogenization, unstable product performance, and product effects that do not fully meet market demands. Some key technologies still need to be developed and overcome. Areas such as the manufacturing technology for green, safe, and biodegradable coating materials for slow- and controlled-release fertilizers, low-cost automated coating technologies and related equipment, technologies for producing environment-friendly, stable, and efficient urease inhibitors, nitrification inhibitors, and bio-stimulants, combination technologies of urease inhibitors and nitrification inhibitors suitable for urea production processes, methods for verifying the efficacy and testing the quality of value-added fertilizers, intelligent water-fertilizer integration technologies suitable for efficient water-saving irrigation, manufacturing technologies for water-soluble fertilizers suitable for field crop cultivation and drone-based fertilization, as well as equipment for storing, transporting, and applying inexpensive and efficient liquid fertilizers, all require further improvement. Gu Zongqin explained that the quality of high-efficiency fertilizers in China varies greatly; fraud and the sale of fake products, as well as irregular labeling, occur from time to time. These problems are more pronounced in certain regions and for specific types of fertilizers, especially with regard to the products manufactured by small enterprises. There are mainly the following typical scenarios of counterfeiting. First is the reduction of nutrients. High-efficiency compound (mixed) fertilizer products reduce the amounts of phosphorus and potassium in them and overstate their contents; in inspections of such fertilizer products, deficiencies in the effective ingredients account for about half of all issues identified. The second is counterfeiting well-known brands. Intentionally confusing and imitating the trademarks and brands of well-known companies, using \"high-quality fakes\" on product packaging to take advantage of well-known brands, thereby making it difficult to distinguish between genuine and fake products and deceiving consumers. Third, the packaging labeling is not standardized. The mandatory standards for fertilizer labeling are not properly enforced; there are cases where such labeling is present when it should not be, or where it is present when it isn’t required, fertilizer product names are labeled arbitrarily, and the efficacy of the products is exaggerated or falsely described. Fourth is roaming around to sell. Some criminals choose to move around at the borders between provinces and cities to carry out fraud and sell their goods door-to-door, hiding from supervision by playing hide-and-seek. Fifth is concept marketing. Some engage in false advertising under the guise of new types of fertilizers, functional fertilizers, water-soluble fertilizers, slow- and controlled-release fertilizers, as well as pest control and disease prevention services; others try to persuade farmers by offering gifts or providing training to influence their decisions. Sixth is online fake product sales. Some use corporate websites, online stores on platforms, and WeChat groups for sales, and it is difficult to ensure the legitimacy of their business operations and the authenticity of their products, making it hard to take action against them. Such behavior should be regulated and suppressed, otherwise it will hinder the healthy development of high-efficiency fertilizers. Gu Zongqin pointed out that currently, the regulations related to fertilizer management in China are mainly scattered across laws and rules such as the Product Quality Law, the Regulations on the Administration of Industrial Product Production Licenses, and the Measures for the Administration of Fertilizer Registration; the relevant provisions lack specificity in terms of fertilizer supervision. As the general law in the field of product quality, the Product Quality Law does not provide specific provisions regarding penalties for illegal activities related to fertilizers, making it difficult for law enforcement officers to determine how to proceed and thus preventing them from imposing penalties. Some companies take advantage of loopholes in the policies; seeing that there are no mandatory standards set for the nutrient content of fertilizers, they give their products new names and establish their own corporate standards with relatively lower nutrient levels, making it difficult for regulatory authorities to take action against them. At the same time, the standardization management of fertilizers involves multiple industries and departments such as industry and information technology, the chemical industry, and agriculture; the system is chaotic and lacks coordination, with overlapping or even conflicting standards across different industries. The interplay of these factors creates significant difficulties in fertilizer regulation, making it hard to put an end to the practice of using fake and substandard fertilizers, which harms farmers. Although the development of high-efficiency fertilizers faces certain difficulties and challenges, Gu Zongqin believes that there are still many opportunities for their development in China. On the one hand, China’s policy orientation is conducive to the development of high-efficiency fertilizers ； On the other hand, the formation of a modern agricultural management system facilitates the promotion of high-efficiency fertilizers.