Brazil’s agricultural distribution landscape is undergoing reshaping amid intensified competition and shrinking profit margins, with a risky shift in the sales model for crop protection technologies. Cássio Luiz Kirchner, Director of BASF Brazil’s Agricultural Solutions Business, has highlighted that “value erosion” has become a major threat to the sustainability of the country’s agrochemical retail model.
Sales Role Shift and Vicious Cycle
Kirchner noted that a growing number of sales representatives are moving away from their core roles as technical advisors and innovation promoters, directing almost all their efforts to price negotiations. This has created a vicious cycle: distributors sacrifice the value of products and services in pursuit of lower prices, the leadership authority of sales teams is weakened, and the entire supply chain is trapped in a low-profit, high-risk market situation.
He further pointed out that many sellers no longer defend the value of the technologies they represent. They have abandoned powerful tools such as technical arguments, agronomic data, and strategic differentiation, focusing solely on competing on price. This not only undermines their professional status and devalues the companies they represent but also drags the entire industry into endless price wars.
Market Changes and Value Erosion Risks
Brazil’s crop protection market is in the midst of profound changes. The expansion of cooperatives and rural retailers—whether to fill market gaps left by the integration of multinational companies or to meet their own organic growth needs—has intensified market competition. While this expansion has opened up new business boundaries, it has also led to overlapping distribution networks and sustained price pressure. In Kirchner’s view, the erosion of internal market value poses a greater threat than competition itself.
When companies and sellers reduce everything to price discussions and stop defending agricultural value, the entire system is weakened, profit margins collapse, and knowledge loses its importance. This issue is not limited to frontline sales staff but is often reinforced by leadership behavior. Many sales managers are unwilling to resist market pressure and choose to authorize successive price cuts instead of strengthening their teams through technical preparation and differentiation strategies. Each unwarranted authorization of price cuts makes sales staff believe that price is the only effective argument, causes managers to lose authority, and leads customers to learn to manipulate competitors against each other—further reducing the industry’s professionalism and profitability.
Over time, the relationship between suppliers and farmers has shifted from a trust- and knowledge-based partnership to a purely transactional exchange.
Impacts on Farmers and Industry Assets
Kirchner emphasized that when negotiations are limited to price alone, farmers will eventually suffer harm. While farmers have the right to seek the best terms, if sales no longer include technical services, reliable agronomic guidance, and strategic cost management, producers will lose the opportunity to improve productivity and efficiency in the long run.
As the profit margins of cooperatives and distributors are eroded, the industry faces the risk of losing its most valuable asset: the transfer of agronomic knowledge, which distinguishes the value-based distribution model from the commodity market.
Measures to Reverse the Trend and Global Context
To reverse this trend, Kirchner stated that leaders must have the courage to defend the value proposition of their businesses, invest in high-quality technical training, market education, and value-based negotiation strategies. The future belongs to enterprises that can explain why their products are important. Defending value is not arrogance but professionalism. Enterprises need to stop competing on who offers the largest discounts and start competing on who delivers the best results.
Kirchner made it clear that the sustainable growth of agricultural distribution will depend on restoring a culture of value creation, where technology, services, and agronomic insights take precedence over the temptation to close sales at any price.
Value erosion is not unique to Brazil but is particularly severe in markets experiencing integration and price fluctuations. Experts believe Kirchner’s comments reflect a broader shift in the global agricultural retail industry—moving from transactional sales to value-oriented agronomic partnerships. However, the challenge lies in implementation. With the expansion of distribution networks and intensified competition, maintaining profitability without losing market share will require “business courage and renewed leadership.”
Kirchner concluded that value erosion is not just about sales strategies; it is about culture. Only companies that rebuild this culture will be able to remain profitable and relevant in the next decade of agricultural retail.
