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Congressional Testimony
March 29, 2000, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 8600 words
HEADLINE:
TESTIMONY March 29, 2000 JAY J. VROOM PRESIDENT AMERICAN CROP PROTECTION
ASSOCIATION HOUSE AGRICULTURE FARM POLICY REVIEW
BODY:
Testimony of Jay J. Vroom President American
Crop Protection Association before the House Agriculture Committee on Current
and Future Farm Policy from the Agricultural Input Perspective March 29, 2000
Thank you, Mr. Chairman: I am Jay J. Vroom, President of the American Crop
Protection Association (ACPA). ACPA is the U.S. industry trade association
representing basic manufacturers, distributors, and formulators of crop
protection and biotechnology products. These companies serve American
agriculture from basic research and development of new products that protect
crops from pests and weeds to the manufacture and marketing of these tools to
our farmer customers. Our members include corporations and cooperatives, both
large and small, which operate in a competitive and changing agricultural world.
I am here today also representing ACPA's affiliate association, RISE
(Responsible Industry for a Sound Environment,) which represents our industry's
specialty, largely urban-use pesticides. While today's hearing focuses on
agricultural policy, I would be remiss if I did not point out the direct linkage
that exists between both the markets and regulatory environment of agricultural
and specialty pesticides. First, the market synergies of both sectors support
common investment in product discovery, testing and development. In many cases,
active ingredient molecules are used in ag and non-ag markets. Often the same
companies discover, make and sell these products, benefiting customers on both
sides of the equation. Together with RISE, we seek uniform and fair,
science-based regulation of all pesticide products, no matter what the market.
Additionally Mr. Chairman, I want to emphasize the essential public health
benefit of many specialty uses of pesticides to control disease vectors such as
the recent outbreak of mosquito- born encephalitis, to reduction of cockroach
"dust" that is a major contributor of childhood asthma. This Committee has
always paid close attention to the issues affecting specialty pesticide
regulation and use, and we ask that you continue to maintain that important
balance. By the way, we expect the synergies that have existed between the ag
and non-ag synthetic technologies and products will continue as new
biotechnology tools grow in both market arenas. We commend Chairman Combest and
this Committee for holding today's hearing about the impact of current and
future farm policy on the input sector. As you examine a wide variety of
alternatives to existing farm policy, we encourage you to continue considering
the implications for the suppliers of farm goods and services. As this Committee
knows well, crop protection provides essential inputs for American farmers that
enable them to produce sufficient food to feed a growing and hungry world.
Farmers need a variety of crop protection tools in order to select the best
match for their individual farming operations. Their needs can vary widely from
year to year, depending on crops grown and rotation schedules, weather, pest
populations, and product rotation to control pest resistance. Despite the wide
variety of crop protection tools on the market, when our customers experience
low prices and low profitability, so do we. Over the past several years, this
fact has caused flat to depressed sales of crop protection products. For
example, last year sales by ACPA members were down 8.6%. Many companies have
been forced to layoff a significant number of employees and some parent
companies are channeling investments into more profitable sectors, away from
crop protection. These trends will likely continue until profitability returns
to the American farm. Biotechnology & Stewardship Before I turn to the
subject of today's hearing, I would like to highlight two major opportunities
for American consumers: biotechnology and stewardship. As most would agree,
biotechnology holds tremendous promise. But, its future depends upon public
perception, our regulatory system, and demand in domestic and international
markets, farmer acceptance, and threats to overrule science from misuse of the
precautionary principle. ACPA s Biotechnology Committee is pleased to work with
growers and other stakeholders during these challenging times. In concert with
representatives of the entire food chain, from technology providers to growers
to food marketers, we will continue to promote sound public policy and inform
consumers about biotechnology. Mr. Chairman, as you and others on the Committee
know, agricultural biotechnology companies are about to launch a major,
nationwide public information effort -- in part as a response to suggestions
received from you and the entire committee. The program will be undertaken by a
new entity called The Council for Biotechnology Information, and I have been
named to serve on its North American Governing Board. The Board met for the
first time just before this hearing. I will be happy to answer any questions
about available details concerning the impending launch of this important effort
to provide to the American public a volume of more balanced and factual
information about today's modern crop biotechnology products and their potential
for the future. An immediate challenge we face is that current registrations for
all biotechnology products with plant expressed protectant qualities will expire
in 2001. We hope that the Environmental Protection Agency will do all it can to
ensure that registrations are renewed and renewal decisions made before seed
sales for the 2001 growing season begin in August 2000. We remain firmly
committed to providing relevant and useful information to regulators, our
customers and the public to ensure that American growers continue to provide
quality products for domestic and international markets. We look forward to
working with you in reaching our common goal of fair access to world markets for
American agricultural producers adopting this technology. Regarding stewardship,
the crop protection industry is making a significant commitment and investment
for long-established pesticides, new chemistry and genetically modified
products. We are committed to a partnership with the agricultural supply chain
and farmers in support of a stewardship program that provides for continuous
improvement in the manufacture, handling and storage of crop protection and
production products. Increasing the level of professionalism throughout the
supply chain to end-users is a key component. Through incentives and
encouragement, the goal of the program is to, via an industry voluntary program,
train and certify all users of crop protection and production products,
including farmers, in order to facilitate safe and effective use, even beyond
the high level of stewardship already in place today. The crop protection
industry also is making significant investments in e-commerce, including
development of common platforms and standards to enable all in the supply chain
to participate in a transparent and efficient way. Farmers will play a vital
role as technology partners while the Internet and electronic information
systems transform the way they purchase agricultural inputs and manage their
operations. The benefits of e-commerce technology include: start-to-finish
product/container tracking, immediate access to use and regulatory compliance
information, accurate and integrated field records with history of crops, crop
yield, inputs, input efficacy and precise, informed emergency response.
E-commerce is an evolving technology with an important role in our overall
commitment to stewardship. ACPA's affiliate association, RAPID, is a leader of
these technology developments in U.S. agriculture. Current and Future Farm
Policy Many farmers are experiencing serious financial problems due to low
prices and, for many, low crop yields resulting from natural disaster. These
valued customers have needed the emergency assistance Congress provided for the
last two years. However, pain continues to ripple throughout the farm economy,
our members included. For this reason, ACPA has supported the emergency market
loss and disaster payments to infuse cash into the farm economy to supplement
AMTA payments. AMTA payments were originally conceived to supplement reasonable
market prices, not severely depressed prices. Unless Congress wants to continue
to provide $6-8 billion a year in supplemental, unpredictable payments, it will
be necessary to develop new approaches and solutions. New policy approaches
should recognize that most of the principles of the 1996 Farm Bill were (and
are) sound: increased planting flexibility with less government intervention in
farm decisions that gives growers more choice and independence in their
operations. Farmers have more freedom to make planting decisions. However, the
elimination of AMTA payments scheduled by 2003 will leave production agriculture
without a "safety net" in the face of extremely low prices. Barring an
unforeseen turnaround in commodity prices, Congress will likely face continued
need to provide emergency assistance to growers. Various options to change farm
policy are surfacing, which will be considered in preparation for the 2002 Farm
Bill or before. As you deliberate these important options, we urge that you
provide a broad underpinning to support our customers, including ensuring that
all of a producer's production remains eligible for loan and that eligibility
for income support not be determined by farm size or income. We also recommend
that any alternative sources of farm support continue to recognize the
importance of pesticides and biotechnology in crop management and as a pillar of
IPM. In addition to farm policy, Congress has additional opportunities to help
improve the fundamental outlook for American agriculture. We encourage Congress
to help increase exports, build domestic demand, reduce agriculture's regulatory
burden, and provide affordable, workable risk management tools to growers. We
recognize and appreciate that this Committee is addressing many of these issues.
Hopefully, Congress will enact Permanent Normal Trade Relations
with China and support its accession to the WTO, which will help build new
foreign demand for U.S. production. Reform of U.S. sanctions policy, improved
agricultural trade policies in the WTO and retooled U.S. government export
credit programs also would help boost exports. With this Committee's action last
year on crop insurance and recent Senate approval, Congress is closer to sending
a bill to the White House that will increase affordable options for a broad
array of producers and crops. However, agriculture's regulatory burden has grown
heavier since passage of the 1996 Farm Bill. Regulatory obstacles threaten
unnecessary loss of pesticides, hinder our ability to provide farmers with new
products, and may impose millions of dollars in new user fees upon us, and
ultimately, our customers. Together with our customers we face: Capricious EPA
implementation of the Food Quality Protection Act (FQPA) Time delays to register
new pesticides at EPA Lost effective patent term and other threats to
intellectual property $30 million in proposed increase of EPA tolerance fees
TMDL's International harmonization challenges Threats to FIFRA preemption EPA's
new 6(A)(2) rule Despite these challenges, USDA has grown as a strong advocate
for American agriculture in efforts to gain sound, science-based FQPA
implementation, encourage new product registration; provide valuable data to EPA
for more reliable risk-assessments and generate analysis about agricultural
impacts of legislative and regulatory proposals. Yet USDA's role needs to expand
so that agriculture has an even stronger voice in EPA decisions. Food Quality
Protection Act FQPA requires EPA to impose new, more challenging safety
standards for pesticides and to reevaluate the maximum pesticide residues
permissible on food. ACPA supports the law s fundamental goals, including
additional protection of infants and children. However, FQPA should be
implemented according to the latest, most accurate and sound scientific
principles to prevent the unnecessary loss of pesticides. Unfortunately,
politics has overtaken science at EPA. The Agency frequently is using
theoretical "worst case" assumptions in risk assessments to decide the fate of
pesticides. This was most visible last August when EPA unnecessarily cancelled
42 crop uses of two major products, methyl parathion and azinphos methyl. This
will continue to happen until EPA is forced to fix the way that it implements
FQPA. The following describes some of ACPA's concerns over current FQPA
implementation: EPA is creating policy "on the fly" to implement FQPA. This has
involved several major, sudden capricious reversals and decisions on individual
products and on broader policies, without informing or consulting stakeholders.
Instead of giving ample time to generate new data called for by FQPA, EPA
penalizes pesticides for not having data . . .data EPA hasn t even required! EPA
is ignoring credible, reliable data about individual pesticides, and selectively
using questionable data from studies to help make what is often a political case
against products. EPA has not yet published current comprehensive data
requirements needed to determine whether a pesticide meets FQPA s new safety
standards. As a result, pesticide companies must frequently guess which tests to
conduct, and these may or may not satisfy EPA reviewers. EPA is making pesticide
decisions before finalizing and publishing the science policies upon which the
Agency says that it will base decisions. EPA s estimates about pesticide
exposure and risk are often inflated by unsupportable assumptions, judgements,
models and data, which do not resemble reality. This causes EPA to significantly
overestimate actual risk to farmers and consumers, forcing unnecessary
cancellation of uses and products. For example, the FQPA's requirement for
reliable exposure data on drinking water is being ignored by EPA and replaced
with highly inaccurate, worst-case computer predictions. This use of inaccurate
information is having a negative impact on the availability of new and old
products for the pesticide user community. The American public must be assured
that pesticides on the market are safe when used according to the label -- both
for farmers, consumers and others who apply them, and for the food supply. That
is EPA s job. But EPA is going beyond "regulating on the side of caution." In
fact, the Agency appears to be regulating on "phantom risk." The public advisory
committee on FQPA implementation (TRAC) expired last fall. Despite requests from
many food and agricultural groups, to date EPA has failed to reinstate TRAC to
ensure public input in the decision-making process. We remain hopeful that EPA
and USDA will soon announce a replacement for TRAC. Legislation introduced in
the U.S. House of Representatives and the U.S. Senate (H.R. 1592, H.R. 1334 and
S. 1464) would hold EPA to the original congressional intent for implementing
FQPA. These bills would not change the Act's safety standards or its protections
for children. Under H.R. 1592 and S. 1464 specifically, EPA would have to base
decisions on sound science, and when reliable data is not available, registrants
and others would have to provide it according to EPA guidelines. The legislation
would also establish a permanent advisory committee on FQPA implementation.
Currently, H.R. 1592 has 214 cosponsors, and we thank the 42 cosponsors from
this Committee (4/5 of the Committee) for your support. The Subcommittee on
Department Operations, Oversight, Nutrition and Forestry has held oversight
hearings, and the hearing record demonstrates the need for this legislation to
ensure that EPA implementation reflects congressional intent, not the Agency's
political positioning. Due to its jurisdiction over the Federal Food, Drug and
Cosmetic Act (FFDCA) and FQPA's pesticide tolerance reassessment, we are also
urging the Commerce Committee to hold oversight hearings on FQPA implementation.
Farmers Need New Pesticides: EPA Decisions Are Delayed Slow and unpredictable
EPA registrations of new pesticides and new pesticide uses are a significant
regulatory burden for the crop protection industry and our customers. Fewer new
pesticides are available since many move at a glacial pace through EPA approval
process, causing a bottleneck for new pesticide registrations. Having a wide
variety of pesticides on the market is beneficial to growers for several
reasons. Competition is enhanced. Customers have a broad range of choices from
which to select the most efficacious, cost-effective product that meets their
needs. They also can better manage development of resistance through pesticide
rotation. Furthermore, additional products entering the market are needed to
ensure an orderly transition for farmers to replacement pesticides for those
that may be lost or curtailed under FQPA and the 1988 reregistration program.
EPA has been unable to keep pace with registration applications. Actual
registration decision time is quite lengthy; on average, 4- 5 years, which is
far slower than in other developed nations with rigorous safety reviews like
ours. Also the number of decisions per year has dropped steadily over the past 5
years, and until recently the Agency was refusing to accept additional
registration applications for dozens of new pesticides. EPA just announced it
will accept some additional applications for registration later this year, but
it is unclear when the Agency will be able to act on these submissions. All
pesticides meeting the stringent standards for safety and use under the Federal
Fungicide, Insecticide, Rodenticide and Insecticide Act (FIFRA) should receive
EPA registration. EPA's responsibility is to grant a license to allow a
pesticide to be sold only when the Agency concludes it is safe to use according
to label instructions. Instead, EPA has established priority systems to
selectively act upon registration applications for products the Agency prefers
over others. We believe EPA should act expeditiously and responsibly to make
science-based registration decisions on all registration applications. Further,
several aspects of the competing priority systems are redundant and illogical.
The registration process could be expedited in several ways while still
preserving EPA's rigorous, important scientific scrutiny. Increased EPA
accountability to Congress about meeting specific performance standards with
increased efficiency would be an important step, for example. EPA's registration
process could be more efficient if it were streamlined and better organized. For
example, simultaneous investigation and review of the different science
components of a registration application could be conducted. To help Agency
personnel manage the workload, more outside science reviewers could be utilized
from EPA-accredited facilities. To fill "data gaps" created by FQPA, EPA could
update its Part 158 testing guidelines so registrants would clearly understand
which tests and methodologies to use before submitting registration
applications. Currently, after initial EPA review, much time is spent repeating
tests in a slightly different manner. Limited federal funding and an
increasingly complex risk assessment process are causing this registration
bottleneck. ACPA supports increased federal funding for EPA's registration
program to expedite registration decisions based on rigorous science, and to
eliminate discriminatory treatment between products eligible for registration.
We urge this Committee to express its support to the Appropriations Committee
for sufficient, targeted EPA resources to ensure this job gets done. As this
Committee is aware, ACPA's Board of Directors has authorized our Association to
pursue the concept of a fee for registration service package with EPA. We remain
guardedly optimistic that such a legislative proposal could gain Congressional
consideration in the near future, thus providing yet another answer to the
problem of gaining more timely registration decisions. We are committed to
working closely with organizations representing farmers, other customers and
other stakeholders in this process. Intellectual Property A perverse result of
EPA's lengthy registration process is erosion of effective patent protection for
crop protection products. The longer it takes EPA to register a product, the
less patent life remains for that product in the marketplace. Current patent
life technically is 20 years, but, effectively, only about 8 years since it
takes 12 years on average to bring a pesticide to market. Much of this 12-year
period is attributable to EPA's lengthy registration process. Patent protection
is important to American agriculture because it provides incentive for the
scientific research and development needed to bring new technologies and
products to our customers. It also helps to ensure product quality and
stewardship. New, high quality products meeting EPA's rigorous safety standards
help farmers increase yields and meet consumer demand without resorting to
production on marginal, environmentally-sensitive land. Farmers benefit by
increased value from their land, and consumers here and abroad enjoy abundant,
affordable food. This high yield, intensive use of our resources, coupled with
sound stewardship, will become increasingly important for the U.S. to remain a
principal supplier of food and fiber to a growing, hungry world population. When
lengthy registration delays eroded pesticide patent life in Europe, the European
Union (EU) adopted a Supplementary Protection Certificate (SPC) mechanism to
extend effective patent protection. With an SPC, the patent term is extended for
up to 5 years after the patent expires to compensate for patent time lost while
a manufacturer waited for registration approval. A similar law would benefit the
U.S. crop protection sector as well. Protection of intellectual property from
piracy is a critical challenge. Our industry, which submits millions of dollars
worth of proprietary data to EPA for product review, wants to ensure that all
countries abide by the World Trade Organization s Trade Related Aspects of
Intellectual Property Rights (TRIPs) requirements. TRIPs is the first
international intellectual property agreement that protects trade secrets,
especially proprietary data submitted by innovators to government. As of January
1, developing countries must abide by the TRIPs requirements. The United States
Trade Representative must vigilantly and aggressively monitor TRIPs compliance
by other countries. Importantly, a special March 2000 issue of Farm Chemicals
International focuses on intellectual property rights (attached). It is the
first and most comprehensive discussion to date of the benefits of intellectual
property to agriculture, including farmers, the farm input sector, the food
industry and consumers worldwide. The magazine also describes in detail the
challenges facing our industry's extensive investment in research and
development absent comprehensive, worldwide patent protection and data
compensation. New User Fees EPA has proposed a new $30 million per-year user fee
to pay for all tolerance actions by the Agency. While EPA's authority to collect
tolerance fees has remained virtually unchanged over the years, the Agency wants
to impose a near-800% increase in per tolerance fees (from $68,000 to $542,000).
EPA also proposes to make these new fees retroactive to 1996. For more than 40
years, section 408 of the Federal Food Drug and Cosmetic Act (FFDCA) has
authorized the collection of "such fees as will in the aggregate. . . be
sufficient over a reasonable term to provide, equip and maintain an adequate
service for the performance of the Administrator s function under section 408 ."
The impact of the new tolerance fee proposal is considerable. Many pesticides
have tolerance levels set for a number of different crops. A single pesticide
may be used on major and minor crops, perhaps having as many as 100 tolerances.
EPA proposes to assess its new, high fees for decisions on each tolerance. As
well, EPA predicts no gains in productivity from the new tolerance user fees.
Since nothing will be gained in the process, our additional regulatory costs
will be passed on to others, including our farmer customers. The additional
costs to industry will cause product lines to be dropped (especially for minor
use crops), depriving farmers of needed risk management tools, or farmers will
pay higher prices for the product, which will further pinch operating margins.
This all will be further exacerbated because the EPA proposal is retroactive.
Industry has submitted applications for products based on known financial and
marketing costs. Companies may now be billed hundreds of thousands -- perhaps
into millions -- of dollars in retroactive charges. Last year Congress approved
a 1-year moratorium on EPA's ability to implement the tolerance fee rule. We
urge Congress to continue this moratorium, especially given production
agriculture's financial distress. TMDL's EPA's proposed final rule on Total
Maximum Daily Load (TMDL) regulations is a vast over-reach that would impose
costly and illegal controls on non-point sources. The proposals would change
TMDLs from simple programs into a rigid enforcement tool for both point and
non-point sources. We are concerned that the rule would mandate the inclusion of
non- point source into the TMDL program and by definition, treat "threatened "
waters as "impaired," thus significantly adding to the cost and coverage of the
effort. The use of pesticides in silvicultural applications would be restricted
without justification and aquatic pesticides would be treated as chemical
wastes. ACPA joins in a large and growing group of national and state
organizations, as well as tens of thousands of individual farmers and ranchers,
who oppose this rule in its present form. We urge Congress to step up its
opposition to this proposal by insisting that EPA revisit the rule to address
the common issues raised by agriculture and the states. U.S.--Canada
Harmonization Lack of consistent and "harmonized" scientific testing and data
requirements for pesticide registrations in the U.S. and Canada have been a
major source of concern for the crop protection industry and our farmer
customers. The result has been slower registrations and slower access to new
products for farmers. ACPA is committed to working with the NAFTA Technical
Working Group (TWG) and our commodity partners to achieve harmonization of
regulatory processes. We believe that new product registrations will be
expedited, duplication of studies and analysis can be reduced, ultimately
providing greater market competition in both availability and pricing. In order
to get there, however, we need to continue working through the TWG to harmonize
guidelines, define the "core data set," and streamline the EPA registration
process. In an effort to expedite this process, ACPA is pleased to support the
Administration's request to make U.S.-Canada joint registrations one of EPA's
"registration priorities," in order to expedite the registration of new
products. We must note, however, that continually putting other priorities ahead
of the rest of the registration queue will slow down all registrations,
ultimately jeopardizing the availability of newer and safer products for our
nation's farmers. FIFRA Preemption FIFRA preemption, or primacy of the federal
pesticide label, is a key provision of FIFRA, under this Committee' s
jurisdiction. Recently, the U.S. Department of Justice (DOJ) and EPA
unsuccessfully sought to undermine federal preemption, even though over 200
state and federal courts have upheld it over the years. FIFRA expressly
prohibits states from imposing any requirements for pesticide labeling that are
in addition to or different from those imposed by EPA under FIFRA. By mandating
that each pesticide product be distributed with nationally uniform labeling
regulated solely by EPA, Congress sought to ensure that a single federal agency
in possession of the necessary data, expertise, and experience would determine
what warnings and other information should or should not appear on a pesticide s
label. Loss of FIFRA preemption would diminish farmer confidence in the
credibility of EPA's regulatory process and, in turn, consumer confidence in the
safety of the food supply. Pesticides are sold nationwide, and lack of federal
preemption would lead to different state labels for each product, resulting in a
barrier to interstate commerce. This at a time when our new, e-commerce economy
is taking the marketplace in exactly the opposite direction! Lack of preemption
could reduce the availability of crop protection products, especially for small
markets (minor use products), because of uncertainties and potential liabilities
that would be attributed to the labels of the pesticide registrants. A landmark
legal case recently upheld FIFRA preemption. Earlier this month the Supreme
Court of California soundly rejected EPA's arguments against preemption,
submitted through DOJ's amicus curiae brief and oral arguments in Etcheverry v.
Tri-Ag Service and Bayer Corporation. In rejecting the plaintiff's and EPA/DOJ's
claims, the Court held that other decisions finding that FIFRA does preempt
state tort claims were "numerous, consistent, pragmatic and powerfully
reasoned." This important legal victory upholding FIFRA cannot be overstated. We
appreciate this Committee's attention to this issue and continued vigilant
oversight. EPA's New FIFRA 6(a)(2) Rule Another important legal issue facing our
sector is EPA's final rule under FIFRA Section 6(a)(2) that establishes new
requirements to report adverse effects caused by pesticides, including all
"opinions" concerning the toxicity of a pesticide. The rule eliminates the
attorney-client privilege and attorney work product doctrine for such reporting.
As a result, registrants are required to report adverse opinions from testifying
and non-testifying experts retained by their attorney defending a product
liability action. EPA s new rule impairs the right of registrants to be
represented by counsel and to defend themselves against litigation, completely
prejudicing the legal process against them. The release of information
concerning attorneys strategies and opinions, as well as information gathered in
preparation for litigation, will drastically bias any proceedings against
registrants, as registrants cannot obtain any corresponding disclosure from
adverse parties. FIFRA registrants are placed at a severe disadvantage, as
protections provided to all other attorneys allowing them to fully investigate
and research a case, and hold frank attorney-client discussions, are not
available to defendants who happen to be FIFRA registrants. Only Congress has
the authority through explicit language to abrogate the work-product doctrine
and the attorney-client privilege. The work-product doctrine and attorney-client
privilege are simply too important and too firmly rooted in our system of
justice to permit an agency to eliminate or curtail the doctrine by regulation.
Nothing in the statutory 6(a)(2) language or the legislative history of FIFRA
even suggests an intent on the part of Congress to abrogate any common law
privilege, much less the well recognized protections provided by the
work-product doctrine or the attorney-client privilege. Because FIFRA does not
authorize abrogation of these common law privileges, EPA cannot issue a
regulation that has such an effect. In conclusion, thank you for the invitation
to testify before this Committee. ACPA and its member companies look forward to
working with you for a more prosperous American agriculture.
LOAD-DATE: March 31, 2000, Friday