MAJOR agro-chemicals groups are set to slug it out in a battle for

their share of a flat market. But a price war seems unlikely.

Almost exactly two years after organo-mercury compounds were banned in

Britain, cereals growers are facing an increasingly bewildering array of

seed and other treatments.

Bayer, Ciba-Geigy, and Zeneca, are among the big players all competing

for a share of the #415m-a-year crop protection market, of which seed

treatment comprises a small but useful #17m at trade prices.

The fact that this is almost double the 1992 level, when cheap but

effective organo-mercury compounds were allowed until March 31,

indicates the growing importance of this segment. Pricing has become a

key element in the battle, with most of the new relatively narrow range

treatments falling into the #38 to #44 per tonne band.

But as Bernd Naaf, director of the Bayer Crop Protection Business

Group, said at the unveiling of its offerings in this market in London

yesterday: ''We are going for competitive pricing, but we will not

undermine the pricing system -- and we hope that companies such as

Zeneca will not over-react.''

With about three out of every four tonnes of certified seed being sold

by merchants, it is expected that it is this sector that will come under

most commercial pressure from the agro-chemical firms.

Cereals growers, who face declining prices in the wake of both

European farm policy reform and the Gatt settlement, will have little

option but to pay the higher cost of treated seed from this and other

sources.

However, as Bill Rennie, until recently chief officer of the official

seed testing station for Scotland in Edinburgh, observed: ''It only

needs an increase of about 3% to 4% in yield to cover the cost of

treatment.''

Trials carried out at the station have indicated a good response for

Bayers' new products, which have gone through six years of field work,

Sibutol for winter and spring wheat, and Raxil S for winter and spring

barley.