EPA-540/9-76-002
JANUARY 1976
INCREMENTAL COST IMPACTS
OF THE
1972 FEDERAL INSECTICIDE
FUNGICIDE AND RODENTICIDE ACT
AS AMENDED
1976
OFFICE OF PESTICIDE PROGRAMS
OFFICE OF WATER AND HAZARDOUS MATERIALS
ENVIRONMENTAL PROTECTION AGENCY
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INCREMENTAL COST IMPACTS
OF THE
1972 FEDERAL INSECTICIDE
FUNGICIDE AND RODENTICIDE ACT
AS AMENDED
By
R.E. Seltzer
Claude L. Fly
Edwin O. Schneider
FINAL REPORT
DECEMBER 1975
Contract No. 68-01-3181
For
Environmental Protection Agency
Strategic Studies Unit, OPP WH-566
401 M Street, S.W.
Waterside Mall, Room 507
Washington, D.C. 20460
ATTN: John Charbonneau
Project Officer
EPA-540/9-76-002
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EPA REVIEW NOTICE
This EPA Report has been reviewed by the Office of Pesticide
Programs and approved for publication. Approval does not
signify that the contents necessarily reflect the views, and
policies of the Environmental Protection Agency, or does
mention of trade names or commercial products constitute
endorsement or recommendation for use.
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PREFACE
This report describes the results of a study conducted by
Development Planning and Research Associates, Inc. for the
Strategic Studies Unit, Office of Pesticide Programs,
Environmental Protection Agency, Dr. John Charbonneau,
Project Officer.
Work on this project was conducted with -Dr. R. E. Seltzer
as Project Leader and with Dr. Claude L. Fly and Mr. Edwin 0.
Schneider as key project staff.
This report was submitted in fulfillment of Contract No.
68-01-3181. Work was completed as of December, 1975.
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TABLE OF CONTENTS
INTRODUCTION 1
PART I
IDENTIFICATION OF PESTICIDE CATEGORIES, USE TYPES AND
GEOGRAPHIC AREAS THAT MAY BE MOST AFFECTED BY PROVISIONS
OF 1972 FIFRA AS AMENDED 7
Pesticide Categories and Their Relative Importance
in the united states' 7
me Pesticide usefs~ 7
me users ana Uses - General 11
Quantities Used by Different Groups 11
Regions of Greatest Impact 13
potentials tor txpansion of Agricultural Lands and
pesticide use20
Present and Potential Land Use in the United States 20
Potential Usability of Land Resources 20
The Present Use of Land Classes in the States 25
Potentials for Expansion of Croplands 25
Worldwide Potentials for Expanding Cropland 25
PART II
ECONOMIC IMPACTS SOLELY ATTRIBUTABLE TO THE INCREMENTAL REQUIRE-
MENTS OF 1972 FIFRA AS AMENDED 29
Incrementa1 Costs of Pesticide Registration and Reregis-
tration So'lely Attributable to Section 3 1972 FIFRA as
Amended 31
Incremental Tests Required for Registration or Re-
registration Under 1972 FIFRA as Amended 31
Limitation of Incremental Testing Required by 1972
FIFRA as Amended 35
Estimated Incremental Costs - Registration of New
Active Ingredients 36
Estimated Incremental Costs - Reregistrati on of
Active Ingredients 36
Estimated Incremental Costs, Registration or Re-
registration of New or Existing Formulations 38
Estimated Costs - Required Relabeling 38
Summary, Incremental Costs of Registration and Re-
registration of Pesticides Solely Attributable to
Requirements of 1972 FIFRA as Amended 41
Section 3cl0 Impacts 42
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TABLE OF CONTENTS (Continued)
Economic Impact of Section 4 - Use of Restricted Use
Pesticides by Certified Applicators 44
General 44
Categorization of Commercial Applicators of
Pesticides 44
Standards for Certification of Commercial Applicators 44
Standards for Certification of Private Applicators 45
Standards for Supervision of Non-Certified Applicators
by Certified Private and Commercial Applicators 45
Types of Costs - Section 4 45
Economic Impact - Section 4' 46
Economic Impact - Section 5, Experimental Use Permit 49
Requirements 49
Comparison - Requirements 1972 FIFRA as Amended with
1964 FIFRA 50
Economic Impact 51
Impacts of Delays in Granting Experimental Permits 53
Economic Impact - Section 7, Registration of Establishments 54
Section 7, 1971 FIFRA as amended, requires the
following 54
Economic Impact, Section 7 59
Economic Impact - Section 8, Books and Records 61
Requirements 61
Evaluation of Requirements 64
Economic Impact 66
Economic Impact - Section 9, Inspection of Establishments 68
Requirements 68
Procedures 68
Economic Impact 68
Economic Impact - Section 12-G, Use Inconsistent with
Labeling 73
Requirements 73
Recommendation of Knowledgeable Expert 74
State Reaction to Recommending L-ss-Than-Label Rates 74
Types of Economic Impacts of Less-Than-Label Rate
Application Regulations 74
Quantitative Economic Impacts of Less-Than-Label
Rate Application Regulations 75
ii
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TABLE OF CONTENTS (Continued)
Economic Impact of Section 19 - Pesticides and Pesticide
Container uisposai ana storage79
Introduction 79
Procedures not Recommended for Disposing or Storage 79
Recommended Procedures for Disposal of Pesticides 80
Recommended Procedures for the Disposal of Containers
and Residues 81
Recommended Procedures and Criteria for Storage of
Pesticides and Pesticide Containers 81
Disposal of Pesticide-related Wastes 83
Enforcement of Recommended Procedures for Disposal
and Storage 83
Economic Impact of 24 c - Authority of States 88
Introduction 88
Summary - Direct Incremental Costs Associated with the
Implementation of Specified Sections of 1972 FIFRA as
Amended 89
Registration of Pesticides - Section 3 89
Applicator Certification - Section 4 91
Experimental Permits - Section 5 91
Registration of Establishments - Section 7 91
Books and Records - Section 8 92
Inspection of Establishments - Section 9 92
Use Inconsistent with Labeling - Section 12-G 92
Pesticides and Pesticide Container Disposal and
Storage - Section 19 93
Economic Impacts of 1972 FIFRA.as Amended on Users of
Pesticides 94
Agricultural User Costs 97
Industrial User Costs 102
Household User Costs 102
Governmental User Costs 102
Summary - Economic Impacts on User Groups 106
Economic Impacts on Consumers of Final Products Resulting
from Incremental Requirements of \V/2 FIFKA as Amended108
Role of Pesticides in Food and Fiber Production 108
Price Relationships, Prices Paid by Farmers, Farm
Prices and Consumer Food Prices 111
Estimated Quantitative Impact of Section 3, 1972
FIFRA as Amended, on the Consumer 111
m
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TABLE OF CONTENTS (Continued)
Inflationary, Energy, Employment and Societal Impacts of
Incremental Requirements of 1972 FIFRA as Amended 118
Inflationary Impacts 118
Energy Impacts 118
Impacts on Productivity 119
Impacts on Employment 120
Impacts on Competition 121
Summary 122
The Minor Crop Problem 123
PART III
ESTIMATE OF TOTAL COSTS REQUIRED TO REGISTER NEW ACTIVE INGREDIENTS
AND TO REREGISTER EXISTING ACTIVE INGREDIENTS AND PRODUCTS AS
REQUIRED BY SECTION 3, 1972 FIFRA AS AMENDED 126
Background 126
Required Tests and Test Costs 126
Estimated Additional Costs to Industry for Registration and
Reregistrati on of Pesticides 131
Additional Costs for Registration of New Active
Ingredients 132
Additional Costs for Registration of New Formulations 133
Additional Costs for Reregistration of Active Ingredients 133
Additional Costs for Reregistration of Formulations 136
Summary - Additional Costs of Registration or
Reregistration 139
Economic Impacts of Additional Registration and Reregis-
tration Costs on Users of Pesticides 141
Economic Impacts of Additional Registration and Reregis-
tration Costs on Consumers 143
Inflationary, Energy, Employment, Productivity and
Competition Impacts of Additional Costs of Registration
and Reregistration of Pesticides 144
iv
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TABLE OF CONTENTS (Continued)
Page
PART IV
SUMMARY - COSTS AND COST IMPACTS 145
Cost Impacts - Pesticide Industry 145
Cost Impacts - User Groups 147
Cost Impacts - Consumers 149
PART V
LIMITATIONS OF THE ANALYSIS 150
Major Limitations 150
Validity of the Analysis 153
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LIST OF TABLES
Table Title Page
1 Synthetic organic pesticides, production and sales,
United States, 1963-1973 8
2 Trends in U.S. imports and exports of synthetic organic 9
pesticides, 1963-1974
3 Relative distribution of utilization and wholesale value 10
of pesticides, 1970-1973
4 Distribution of pesticides use among user groups, 1971 12
5 Summary of cropland distribution by regions 14
6 1971 Pesticide use by agriculture in 10 regions of the 15
U.S.
7 Minor crops grown in the U.S. 16
8 Acres of citrus, fruits and nuts by regions 17
9 Regional distribution of harvested crop acres, 1972-73 18
10 Land use distribution in the United States, island • 21
possessions and trust territories
11 Distribution of land use capability classes in the 22
states, possessions and trust territories
12 Present land use in the United States by types of 23
use and land classes
13 Present land use, maximum potential land use and esti- 24
mated probable land use by 1985-2000
14 Estimates of percent of 1971 crops treated with pesticides 26
15 World population/land ratios and arable lands per capita 27
16 Incremental costs associated with the reregistrati on of 34
active ingredients under 1972 FIFRA as amended
17 Economic impact Section 4, 1972 FIFRA as amended, cash 47
costs associated with implementation of Section 4
*
18 Illustrations of situations where less-than-label rates 77
of application of pesticides are recommended
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LIST OF TABLES (continued)
Table Title Page
19 Method of disposal of containers used by farmers 85
20 Summary, direct incremental costs associated with the
implementation of specified sections of 1972 FIFRA as 90
amended
21 Comparison of wholesale and farmers' price of pesticides 95
22 Summary of direct incremental costs of 1972 FIFRA as
amended, to manufacturers, and formulators, applicators 96
and farmers
23 1971 Pesticide use by crops in the United States 98
24 Estimated cost impact on agricultural pesticide users
of incremental requirements of 1972 FIFRA as amended, 100
assuming complete pass-through of costs
25 Estimated incremental cost, 1972 FIFRA as amended to 101
agriculture, by regions
26 Estimated cost impact on industrial pesticide users of 103
incremental requirements of 1972 FIFRA as amended
27 Estimated cost impact on household and institutional
users of pesticide, of incremental requirements of 104
1972 FIFRA as amended
28 Estimated cost impact on governmental pesticide users, 105
of incremental requirements of 1972 FIFRA as amended
29 Percentage of total variable production and harvesting
costs accounted for by pesticide materials, represent- 110
ative crops
30 Wholesale and consumer price indexes, 1959-1974 112
31 Cash receipts, estimated total variable production costs 115
and pesticide costs, U.S. crop production, 1973
32 Representative minor crops, acreage, production and value, 125
United States, 1973
33 Data requirements and estimated test costs, pesticide 127
registration
34 Estimated total additional cost of data development to 134
register a new active ingredient 1972 compared with 1976
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LIST OF TABLES (continued)
Table Title Page
35 Estimated additional costs for reregistrati on of
active ingredients as required by 1972 FIFRA as 137
amended
.36 Summary, additional update costs above 1972 test re-
quirements, associated with registering and reregister- 140
ing pesticides as required by Section 3, 1972 FIFRA
as amended
37 Estimated annual economic impacts on pesticide users
resulting from additional update pesticide registration 142
and reregistration requirements
38 Summary, direct incremental 1972 FIFRA and update costs
associated with the implementation of specified sections 146
of 1972 FIFRA as amended
39 Summary, annual cost impacts on user groups due to
direct incremental requirements of 1972 FIFRA and to 148
"update" costs of registration, 10-year period
40 Summary, annual cost impacts on consumers due to
direct incremental requirements of 1972 FIFRA and to 148
"update" costs of registration
LIST OF EXHIBITS
Exhibit
No. Description Page
1 Restricted pesticide, illustrative label format 39
2 General pesticide, illustrative label format 40
3 Format, pesticides report for pesticide-producing 56
establishments
4 Price indexes, farm and food 113
5 Changes in indexes of consumer prices for all foods
and prices paid by farmers for production items, 114
1965-1974
6 . People supplied farm products per U.S. farmer, 1950- 120
1975
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ECONOMIC IMPACTS - FEDERAL INSECTICIDE
FUNGICIDE AND RODENTICIDE ACT OF 1972, AS AMENDED
I. INTRODUCTION
The Federal Insecticide, Fungicide and Rodenticide Act of 1972 (FIFRA),
as amended (PL 92-516, 92nd Congress, H.R. 10729, October 21, 1972) pro-
vides for substantial changes in the regulations concerned with the classi-
fication, registration, application and use of pesticides in the United
States.
Although the Federal Government has been concerned with the regulation of
the pesticide industry for over 65 years, the principal legislative actions
that have resulted in the body of regulatory acts and regulations which
confront pesticide manufacturers, reformulators, applicators and users
today originated with the Federal Insecticide, Fungicide and Rodenticide
Act of 1947 (the basic Act).
A brief chronology of the evolution of laws and regulations affecting the
development and registration of pesticides and related materials follows:
A. Evolution of Laws and Regulations Affecting the Development and Regis-
tration and Use of Pesticides and Related Materials
The regulation of the manufacture, sale or transportation of pesticides
dates back to 1910 when the original Federal Insecticide Act was passed.
However, the requirement for Federal registration of pesticides is of more
recent origin, first required by the Federal Insecticide, Fungicide and
Rodenticide Act (FIFRA) of 1947.
A brief chronology of the evolution of these laws and regulations is as
follows:!/
April 26, 1910 - Original Federal Insecticide Act.
An Act to prevent the manufacture, sale or transportation
of adulterated or misbranded insecticides and fungicides.
Administered by USDA.
June 25, 1938 - The revised Federal Food, Drug, and Cosmetic Act.
Enacted to prohibit the movement in interstate commerce
of adulterated and misbranded food, drugs, devices and
cosmetics, this law charged the Food and Drug Adminis-
tration (FDA) with the responsibility of keeping poisonous
— This chronology is adapted from materials appearing in a report prepared
by The University-EPA-USDA Ad Hoc Subcommittee, dated August, 1973, entitled,
"The Development of Data Required for Registration of Pesticides for Specialty
and Small Acreage Crops and Other Minor Uses."
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Insecticides, as well as insects, out of food products.
It included provisions for setting tolerances for
poisonous ingredients, if they could be justified, but
the procedure was cumbersome and often time-consuming
and expensive.
The law did not provide for advance clearance of safety
of food additives. It left it up to the FDA to discover
their use, and to make tests to prove them "poisonous
or deleterious" to the satisfaction of the court when
action was required to remove them from the market.
1945 and 1946 - Many new insecticides (organic) appeared on the market.
Legal tolerances were not announced, indicating to many
that the ponderous tolerance procedures of the Food,
Drug and Cosmetic Act could not handle the flood'of new
materials. In addition, the labeling requirements of
the 1910 Insecticide Act were obsolete.
June 25, 1947 - The Federal Insecticide, Fungicide and Rodenticide Act
(FIFRA)
This act extended the scope of the 1910 Act to include
rodenticides and herbicides and required for the first
time premarketing registration of products to be shipped
interstate. It thus set up the system of label claims
and registration. It provided that a complete copy of
the label and a statement of all claims to be made for
the material must be submitted to the Secretary of Agri-
culture and must be approved before the material is registered
for sale (in interstate commerce). It also provided a system
of fees to support the procedures involved. The act was en-
forced by the USDA, Agricultural Research Service, Plane
Pest Control Branch, Pesticide Regulation Section.
1950 - The continued flood of new materials emphasized the need
for residue tolerances. According to the provisions of
the 1938 Food, Drug and Cosmetic Act,.supporting evidence
for the tolerances had to be established at public hearings.
Accordingly, hearings were started on January 17, 1950, and
were completed on September 15, 1950. Such a mountain of
evidence was presented that several more months were re-
quired to digest it.
1951 - Growing public concern over the addition of chemicals to
food products led to the appointment of the Delaney Com-
mittee, known formally as the House Select Committee to
investigate the use of chemicals in foods and cosmetics.
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June, 1952
November, 1952
March 26, 1953
January 11, 1954
July 22, 1954
The Delaney Committee submitted its report to the 2nd
session of the 82nd Congress. The report was in three
parts: (1) a majority report, indicating that present
laws were inadequate and new lav/s were needed, (2) a
minority report, indicating that present laws were
adequate but needed streamlining, and (3) a supplementary
report indicating that one of the most important hazards
involved was in the use of pesticides in the home garden
on materials intended for home consumption. It was
pointed out that this particular hazard is beyond the
reach of law and is susceptible only to education of
the general public.
The Food Protection Committee of the National Research
Council published a comprehensive report, dealing with
the use of chemicals in food. This report considered
the present and future food needs of the nation and
siressed the vital role that chemicals play in meeting
these needs. It pointed out that the losses from hazards
involved in using chemicals are rather minor compared
to the losses involved in not using them.
Rep. A. L. Miller introduced a bill, H.R. 4277, which
provided for the regulation of pesticides and tolerances.
This bill was heralded by the industry as a basis upon
which a workable law could be built.
Rep. Miller submitted a new bill, H.R. 7125, (a revised
H.R. 4277 of the previous session). It was referred to
the House Committee on Interstate and Foreign Commerce
and became known as the Miller Pesticide Residue Amend-
ment, since it was introduced as an amendment to the
Federal Food, Drug, and Cosmetic Act.
The Pesticide Chemicals Amendment (The Miller Pesticide
Residue Amendment), amended the Federal Food, Drug and
Cosmetic Act to provide for a system of fees to support.
the procedures involved, became Public Law 518 of 83rd
Congress. It became effective for new chemicals a
year from the date of signing, and was effective for
tolerances established as a result of the 1950 and sub-
sequent hearings.
It established new and more expeditious procedures
for obtaining tolerances for exemptions for pesticide
chemicals. Though administered by HEW, it specifically
assigned to the Secretary of Agriculture the determin-
ation of usefulness of a chemical for all, any or none
of the uses for which tolerances or an exemption are
sought. And it required the USDA to express an opinion
as to whether proposed tolerances are reasonable and
whether residues are likely to result from proposed
patterns of use.
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September 6, 1958 -
March 27, 1962
May 12, 1964
Food Additives Amendment to the Federal Food, Drug
and Cosmetic Act (Public Law 929 of 85th Congress).
It established procedures, principles and appeals
procedures for obtaining regulations from HEW pre-
scribing safe conditions of use for food additives.
A food additive was defined as any substance the
intended use of which may reasonably be expected to
result directly or indirectly in its becoming a
component of or otherwise changing the character-
istics of any food. The law specifically excluded
pesticide chemicals, pesticide residues on crops
(raw agricultural commodities) and pesticide residues
in processed food when such residues result from
legal uses of pesticides on crops. These pesticides
are regulated under Public Law 518 (The Miller Amend-
ment).
This food additives amendment included the Delaney
clause on carcinogens: no additive shall be deemed
safe if it is found to induce cancer when ingested
by man or animals.
Declaration of Certain Forms of Plant and Animal Life
and Viruses to be Pests. Thus, it extended the scope
of the Federal Insecticide, Fungicide and Rodenticide
Act to cover some kinds of pesticides not previously
subject to the Act.
An Amendment to FIFRA eliminating registration under
protest. This amendment provided that the registrant
could request an advisory committee or public hearing
when registration of his product was refused, cancelled
or suspended. The Secretary of Agriculture was also
given the authority to require, by regulation, the
USDA registration number of the label.
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October 21, 1972 - The Federal Environmental Pesticide Control Act
(FEPCA) of 1972 (1972 FIFRA as amended).
It significantly amended the FIFRA of 1947
and is administered by the Environmental Protect-
ion Agency (EPA). The major provisions of this Act
are as follows:
* Administered by the Environmental Protection Agency;
* Requires all U.S. pesticides to be Federally-registered or approved;
* Classified pesticides for general or restricted use, the latter--
because of hazard to the individual or the environment—to be applied
only by or under the supervision of certified applicators;
* Establishes State applicator certification programs (for commercial
and private applicators) and cooperative enforcement programs;
* Prohibits the misuse of pesticides (any use inconsistent with the
label is a crime, whether or not personal or crop injury results or
residue exceeding the tolerance is found at harvest), adds civil, to
increased criminal penalties, and otherwise strengthens enforcement;
* Shortens administrative review procedures;
* Requires pesticide producing establishments to be registered and
to regularly submit information on production and sales volume:
* Authorizes indemnification of certain owners of pesticides which
are suspended, then cancelled; and
* Authorizes the EPA Administrator to establish pesticide packaging
standards, regulate pesticide and container disposal, issue experi-
mental use permits, conduct research on pesticides and alternatives
and monitor pesticide use and presence in the environment.
All provisions of 1972 FIFRA as amended must be effective within four years,
or by October 21, 1976.
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B. Organization of the Report
The analysis of the impacts of 1972 FIFRA as amended as presented in
this report includes three separate and distinct parts:
Part I - Identification of pesticide categories, use types
and geographic areas that will be most affected.
Part II - Economic impacts solely attributable to the in-
cremental requirements of 1972 FIFRA as amended.
Part III - Estimates of the total costs of registration and
reregistration of pesticides, including "catch-up"
costs required to comply with registration require-
ments of 1972 FIFRA as amended.
Part IV - Summary costs and cost impacts.
Part V - Limitations of the analysis.
C. Scope of Work
In compliance with Executive Order 11821 and RFL 256-7, the Environmental
Protection Agency is voluntarily preparing economic impact statements for
its most significant regulatory actie^. This study attempts to evaluate
the economic impacts of 1972 FIFRA as amended on the pesticide industry,
pesticide users and consumers and will describe inflationary impacts which
may result.
Specific tasks included are as follows:
1. Identification of pesticide categories, use types and geographic
areas that will be most affected.
2. Evaluation of economic impacts on the pesticide industry.
3. Quantification, under varying assumptions, of any cost increases
to pesticide users.
4. Quantification, under varying assumptions, of any cost increases
to consumers of final products.
5. The overall assessment of all costs and benefits to society
attributable to the implementation of selected sections of
1972 FIFRA as amended.
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PART I
IDENTIFICATION OF PESTICIDE CATEGORIES, USE TYPES
AND GEOGRAPHIC AREAS THAT MAY BE MOST AFFECTED BY
PROVISIONS OF 1972 FIFRA AS AMENDED
A. Pesticide Categories in the United States
Table 1 illustrates the trends in the production and value of synthetic
organic pesticides in the United States, 1963-1973. Over the 11-year period,
production increased a total of 69 percent and value of production rose by
236 percent. The average manufacturers' value per pound of pesticides in
1963 was $0.58 compared to $1.16 in 1973, reflecting increasing manufacturers
costs. Production rose rapidly during the early 1960's and has continued
to increase, but at a slower rate, since 1966.
Sales increased by 84 percent, a net increase of 547 million pounds vs.
525 million pounds gain in production, the difference beinq made up from
increased imports. Value of sales increased 264 percent representing
increased f.o.b. manufacturers' prices and other increased costs. A
particularly rapid increase was noted in both volume and value of sales
1972-1973, volume sold 1973 increasing 17.4 percent over 1972 and value
increasing 23.1 percent.
Volume of U.S. exports of pesticides increased by 76 percent 1963-1973 and
99 percent 1963-1974 (Table 2). In 1974, exports totaled 674 million
pounds, valued at $566.6 million. Imports of pesticides are relatively
less important, about 28 million pounds in 1973 and 1974.
Table 3 shows the relative distribution of utilization and wholesale value
of pesticides, 1970-1973. As seen from these data, fungicides constitute
12-14 percent of the sales, herbicides 35-37 percent and insecticides,
rodenticides and other pesticides represent approximately 50 percent of
the total volume of sales.
B. The Pesticide Users
The use of pesticides has become a way of life in America and everyone
benefits in some way from their use. The users of pesticides can only be
listed in a general way and the relative volumes used by these major
categories shown. When over 35,000 products are distributed among
215,000,000 people in amounts ranging from boxcar loads down to a few
grams (as in a drugstore or supermarket), any attempt at precise accounting
can be time-consuming and voluminous.
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Table 1. Synthetic organic pesticides: Production and sales, United
States, 1963-73 I/
Year
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
Quantity
(1,000 Ibs)
763,477
782,749
877,197
1,013,110
1,049,663
1,192,360
1,104,381
1,034,075
1,135,717
1,157,698
1,288,952
651,471
692,355
763,905
822,256
897,363
959,631
928,663
880,914
946,337
1,021,565
1,198,568
Change
from
pervious
year
(Percent)
4.6
2.5
12.1
15.5
3.6
13.6
-7.4
-6.4
9.8
1.9
11.3
2.8
6.3
10.3
7.6
9.1
6.9
-3.2
-5.1
7.4
8.6
17.4
Value 2/
(1,000 $)
nn — — — — — — — — — -
444,046
473,815
576,787
715,362
959,260
1,028,469
953,592
1,058,389
1,282,630
1,344,832
1,492,770
QilU t-AJJUl LJ
369,140
427,111
497,066
583,802
787,043
849,240
851,166
870, 3i4
979,083
1,091,708
1,343,581
Change
from
previous
year
(Percent)
3.9
6.7
21.7
24.0
34.1
7.2
-7.3
11.0
21.2
4.8
11.0
6.6
15.7
16.4
17.4
34.8
7.9
0.2
2.2
12.5
11.5
23.1
J7 Includes a small quantity of soil conditioners.
2/ Value of production calculated: unit value x quantity; sales value
as reported by the Tariff Commission.
International Trade Commission (formerly Tariff Commission), Chemical
Division, "Synthetic Organic Chemicals, United States Production and
Sales".
8
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Table 2. Trends in U.S. imports and exports of
synthetic organic pesticides, 1963-1974 \j
Imports
Year
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
Pounds
3.0
3.0
3.0
3.1
6.4
6.8
6.0
'13.3
20.7
23.5
28.8
28.3
Dollars
1.7
1.9
2.0
2.2
5.6
6.0
5.5
10.6
19.6
25.2
32.3
42.7
Exports
Pounds
338
361
306
375
411
472
409
404
423
388
596
674
Dollars
121.1
134.5
133.2
173.6
195.7
241.5
203
220.3
251.6
228.2
365,5
566.6
Source: The Pesticide Review, ASCS, USDA, 1973 and earlier issues, plus
unpublished update data.
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Table 3. Relative distribution of utilization and wholesale value of pesticides, 1970-1973 I/
Classes
Fungicides
Herbicides and plant
hormones
Insecticides, fumigants
rodenticides, conditioners
TOTAL (millions)
Vol
14.
35.
50.
880.
1970
Value
6 7.5
0 57.2
4 35.3
9# $370.3
Vol
14.
33.
52.
946.
1971
Value
0 7.5
5 57.5
5 35.0
3# $979.1
19!
Vpl.
12.6
34.6
52.8
1,021.6#
72
Value
7.5
57.6
34.9
$1,091.7
1973
Vol. Value
12.0 8.
37.0 56.
50.0 35.
1,198.6# $1,343.
0
0
0
6
I/ Source: Table 3, 1973 Pesticide Review, ASC5, USDA plus unpublished update data.
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The following outline serves to point out the wide variety of uses and
users:
1. The Users and Uses - General
(a) Plant Growth Management
Crop Production
Field crops and pasture
Orchards and vineyards
Home gardens
Commercial vegetable farms
Ground Maintenance
Military installations
Parks & recreation areas
Transport & utility areas
Lawns and ornamental sites
Fiber Production
Field crops
Forestry
Greenhouses
Florists
Nurseries
Experimental
(b)
Industrial Commercial and Other Indoor Uses
Industrial & Commercial Other Indoor
Product protection
Wood products preservation
Health and Sanitation
Institutional
Household
Governmental
Public & Business Bldqs.
(c) Animal - Fish - Poultry - Wildlife Mgmt.
Livestock Mgmt.
Feedlot pests
General livestock uses
Predators
Rangeland control
Aquatic Environment
Aquatic weeds
Species control
2. Quantities Used by Different Groups
Poult^y Production
Health
Rodents and insects
predators
Wildlife Environment
Diseases
Pests
No attempt is made here to expand in detail within all these categories.
The production of food and fiber utilized 59 percent of all active in-
gredients according to the 1973 Pesticide Review.l/Therefore, the agricul-
tural uses will be treated in more detail. Other uses contribute to health,
to better living conditions,%to recreation, to an improved cultural environ-
ment and to pest control in industrial and commercial enterprises. General
data in Table 4 show an approximate distribution of total use.
-The Pesticide Review - 1973, Agricultural Stabilization and Conservation
Service, U.S. Department of Agriculture
11
-------
Table 4. Distribution of pesticides use 1n 1971 among user groups
Pesticide Users
The Agricultural Sector
The Household Sector
Institutional, Industrial
& Commercial Sector
Wood Products and
Preservation
}\} Transportation on the
Utilities Sector
The Governmental
Sector
Undistributed
States Totals
Fungicides
41.73
(33.0)
10.00
46.00
—
(24.27)
155.00
Herbicides
227.91
(NA )
36.90
-
42.15
(NA )
307.00
Insecticides
- millions of
169.77
103.83
15.40
—
—
(NA )
289.00
All Other
pounds
54.71
(NA )
28.80
—
..
(NA )
•s
83.51
Total Active
Ingredients
494.109
135.39
91.10
46.00
42.15
24.25
833.00
A.I.
- (X)
59.00
16.25
10.94
5.52
5.06
2.91
(2.91)
100.00
Sulfur Petrol eu
112.09 221.53
(NA ) (NA )
(gal) 81
474.56
•
(150.+) 696.09
Other Materials
in Carriers Preservatives
lions of pounds
(see below) (see below)
(NA)
46.0 (dry)
.12 •= 1,017.5i?
138.0 (gal)
(557.0)
557.0 (1,063.5)
Data Sources: 1972-1973 Pesticide Review, USDA-ERS-Agri. Econ. Report #252, July, 1974 and EPA 540/1-74-001,1974.
Note: Figures in parentheses are estimated.
-------
a. Data on agricultural usages are fairly complete and, since 59 percent
of the pesticide active ingredients are used in agricultural production,
gives a fairly good picture of the distribution among classes of pesticides.
b. Household uses accounted for 16 percent of the active pesticide in-
gredients distributed to users in 1971, chiefly insecticides, fumigants,
disinfectants, fungicides and repellents. This level of use checks fairly
well with an unpublished study made in New Jersey and Connecticut by Kaplan _!/
which showed 15.9 percent of the pesticide active ingredients were used in
and around homes. Agricultural usage was 50 percent of the total in New
Jersey and 65 percent in Connecticut; Government use was 3.9 percent in the
two states vs. 2.9 in the U.S. as shown in Table 4. Industrial use was 18
percent as compared to 21.5 percent in Table 4.
c. The Industrial-Commercial-Institutional Sector appears to be second in
total usage of pesticides accounting for about 22 percent of the total.
Maintenance of sanitary, healthful working conditions accounts for a goodly
share of this; however, product preservation, especially wood products,
uses large quantities. Transportation and utilities systems used over
42 million pounds of herbicides in 1971 to control vegetation along right-
of-way areas. In addition, over one billion pounds of liquid preservatives
(chiefly tar and creosote) and 40 million pounds of other preservatives
were used by this sector in various ways.
d. Governmental uses accounted for only 3 percent of the total, as drawn
from these studies. Military installations, central agencies locations,
government parks, range and forest areas were the prime users.
C. Regions of Gr ?test Impact
Tables 5 through 9 show the distribution of crops and uses of pesticides
by the 10 Agricultural Regions described in ERS-USDA Agric. Econ. Report
252, July, 1974.27
While the greatest total use of pesticides is in the Corn Belt, roughly
104 million pounds, there are much higher concentrations of sensitive and
high value crops in other regions. The Pacific Region has a high concentra-
tion of citrus, apples, vegetables and other fruits and nuts, the South-
eastern Region has high production of citrus, other fruits and nuts plus
such crops as peanuts and cotton. Large acreages of cotton, a large user
of pesticides, are in the Southern Plains and the Delta States Regions.
Also, the Lake States raise large quantities of apples, other deciduous
fruits and such crops as berries, cranberries and vegetables. Considering
the relative impact on these high value, more sensitive crops and the
chances that restricted use or minor use chemicals might become unavail-
able, costly or delayed in availability, one may expect these regions to
I/ Kaplan, Unpublished Report on Pesticide Usage Study, New Jersey
Epidemiologic Studies Program, April 9, 1975.
— Farmers Use of Pesticides, Economic Research Service, U.S. Department
of Agriculture, Agricultural Economic Report 252, July 1974.
13
-------
Table 5. Summary of cropland distribution by regions
REGIONS
PACIFIC
MOUNTAIN
NORTHERN PLAINS
SOUTHERN PLAINS
LAKE STATES
CORN BELT STATES
DELTA STATES
APPALACHIANS
SOUTHEAST
NORTHEAST
TOTAL ACRES
207,274,240
551,722,880
196,641,920
215,844,489
127,000,320
166,328,960
95,579,520
128,142,720
128,064,000
116,514,560
% Potential
CROPLAND 17
13.0
9.1
62.2
26.9
43 o2
50.7
20.2
20.1
1402
21.9
ACRES. CROPLA
^Potential
26,945,600
50,206,800
122,311,300
58,062,100
54,864,100
84,328,800
19,307,000
25,756,700
18,185,000
25,516,700
JJD ACRES. RE)
; Vcroplanc
13,815,000
25,890,000
70,805,000
30,850,000
34,760,000
79,148,000
16,392,000
16,629,000
11,899,000
10,272,000
3CVP TTTTl 4.
rUrCitMJ f , \
1 narvested ;
27 51.27
51.56
57.89
53.13
63.36
93-86
84.90
64.56
65.43
40.26
U.S. TOTALS JL/ 1,933,113,600
100.0
485,484,000 313,680,000 64.61
3/
-^ This value needs rechecking as the values in percentages came from an economic survey
report by R. C. Otte, SCS National Land Use Policy, 1973 and are not verified against
the USDA-SCS National Inventory latest reports.
=* Sources are ERS-USDA Ag. Econ Report 252, July, 1974, 1974 Annual Summary of Statistical
Reporting Service CrPr 2-1(75), Jan. 16, 1975 and USDA Annual Crop Reports Summaries.
Data from 48 states...Alaska and Hawaii are omitted. Regions include the following states:
Pacific - Calif., Ore. and Washington
Mountain - Ida., Mont., Wyo., Colo., Utah, Nev., Ariz., New Mexico
Northern Plains - N. Dak., S. Dak., Neb., Kansas
Southern Plains - Okla., Texas
Lake States - Minn., Wis., Mich.
Corn Belt States - la., Mo., 111., Ohio
Delta States - Ark., La., Miss.
Appalachian States - Ky., Tenn., W. Va., Va., N. Car.
Southeast - S. Car., Ga., Ala., Fla.
Northeast - Md., Del., N. J., N. Y., Pa., Conn., R. I., N. Hamp., Vt., Mass., Me.
-------
Table 6. 1971 Pesticide use by agriculture in ten regions of U.S. (000 pounds - active ingredients)
Resrions
Pacific
Mountain
Northern
Plains
Southern
Plains
Lake.
States
Com Belt
Delta
States
Hortheast
Appalachian
Southeast
3/
U. So Totals
An
Pesticides
55,1*9
1^,675
39,026
45,071
36,091
103,568
64,186
21,947
36,140
78,033
494,109
I/
Fungicides
(Adi.)
7,271
316
527
843
1,370
5,585
211
7,431
4,000
14,120
41,727
Herbicides
12,824
7,573
28,475
15,248
29,990
77,147
24,538
8,179
12,622
ll,3.->
227,906
Others
Insecticides & Uses Miticides
13,313
5,941
8,252
20,355
4,731
20,245
35 538
6,051
10,693
44,450
169,770
21,741
945
1,772
8,625
118
591
3,899
236
8,625
8,153
54,706
1,054
43
_
2
10
28
_
136
27
721
2,021
Defoli-&
desic-
Fumieants cants
n,859
369
1,381
2n
__
5
38
30
3,418
3,653
28,959
5,282
105
_—
7,167
_ —
344
3,290
—
178
1,352
17,718
Grovrth
Rodenti- Regular- Repel
cides tors lents
2 169
< .5 304
<-5 54
< »5 «~
<.5 19
<«5 95
^^j ^^^
8 64
3,695
1,151
15 '5,551
___
—
, j
_ ^
_ „
~
a^
-------
Table 7. Some minor crops grown in U.S. I/ (000 acres)
CroD
Broom Corn
Castor Beans
Chufas
Dm (oil)
Hops
Mint (oil)
Popcorn
Sunflower seed
Wonr.seed (oil)
Others (Miscl.)
U. S. Totals
— Taken from
(1969 and 1
N. E. Aopal. S.E.
1 2 3
- (others - 1
- (others = 0
0.15
- (all others
- (all others
(others « 0.2)
0.4 9.2
0.5
0.03
11.0 6.8 4.8
11.4 16.0 5.7
Delta
d
-9)
.8)
0.06
» 0.3)
- 1.5)
-
-
' -
3.3
3.4
Table 62, Pg. 81, "Crops, Nursery and
973 data) 48 states.
Corn Lake North
Belt States Plains
567
_
_
-
.
-
T?.6 16.6
m.6 3.0 27.1
65.6 71.3
_
7.3 25.8 6.2
133.0 111.0 104.6
Greenhouse Products, U.S.
South Mt.
Plains States
8 9
37.1 68.4
35.6 2.1
-
-
2.9
7.8
0.7
0.7
-
7.9 6.5
81.3 88.4
Dept. Commerce, Vol .
Pacific U. S.
10 Total
107.3
33.5
0.2
2.7 3.0
21.2 25.7
70.3 108.4
157.2
3.4 143.5
0.03
4.3 83.2
101.9 672.0
II, June, 1973
-------
Table 8. Acres of citrus, fruits and nuts by regions—
No
1
2
3
4
5
6
7
8
9
10
48
Regions
Name
Northeastern
Appalachian
Southeastern
Delta States
Corn Belt
Lake States
North Plains
South Plains
Mountain
Pacific
States Total
Citrus
0
0
886,141
932
0
31 ,687
39,532
223,408
1,181,700
Apoles
168,895
76,405
5,524
2,545
42,830
80,962
2.488
2,104
20,381
122,742
356,031
Other
deciduous
fruits
63,965
17,556
64,820
8,367
16,881
101,201
2,365
12,410
21,182
435,177
743,654
Other
fruits
nuts
89,600
14,800
191,900
81,300
16,000
38,200
300
145,800
19,700
983,000
1,581,600
TOT? 1
1 \J l«\A t
322,450
103,751
1,143,385
93,144
75,751
220,363
5,153
193,000
100,795
1 ,764,327
4,032,149
-' Tables compiled by ERS-USDA .
-------
Table 9. Regional distribution of harvested crop acres 1972-73 (000 acres)
CO
Croo
Corn - grain
Corn-silage
Sorg. grain
Sorg. silage
Rice
Wheat (all)
Other grains
Cotton
Peanuts
Potatoes
Soybeans
Sugar beets
Tobacco
All hay & for.
All other
field crops
Citrus
Apples
N.E.
1
2,161
1,682
-
-
.
584
1,128
-
-
250.7
586
44.6
3,380
42.7
_
168.9
Other dec. fruits 64.0
Other fruit
& nuts
Vegetables
Other minor
crops
Sum. -all crops
% cropland in
ea. region
Calc. total
croplands*
Regional
totals*
y Statistics
— Percentages
89.6
411.5
11.4
* 10.6
21.9
25.5
116.5
from USDA
by R. C.
Appal ,
2
3,556
631
138
63
-
675
458
616
269
S.E.
3
3,050
190
80
40
-
339
356
.,190.5
783
53.0 49.2
4,573
-
672.
4,753
35.
_
76.
17.
14.
134.
16.
18.
20.
25.
128.
and U.S
3,424
-
7 141.8
1,574
6 279.6
883.1
4 5.5
6 64.8
8 191.9
9 401.1
0 5.7
0 13.1
1 14.2
8 18.2
1 128.1
Corn Lake
Delta Belt States
456
234 31,690 9,300
65 1,330 2,059
205 547
77 58
1,215 5.2 -
335 3,607 2,605
' 95 2,647 5,320
2,835 173
10
4.3 22.7 176.4
8,980 29,260 5,324
29.6 218
0.2 17.1 10.2
1,899 9,458 8,526
385.0 12.0 611.0
0.9
2.5 4t.9 81.0
8.4 16.9 101.2
81.3 16.0 38.2
51.5 241.1 610.7
3.4 133.0 111.0
16.5 79.4 35.7
20.2 50.7 43.2
19.3 84.3 54.9
95.6 166.3 127.0
North
Plains
7
10,330
2,195
6,162
432 .
-
24,201
8,436
-
-
145.6
3,024
188
_
15,478
212.0
_
2.5
2.4
0.3
1.2
104.6
70.9
62.2
•
122.3
196.6
South
Plains
8
727
127
7,646
121
549
8,660
1,266
5,726
427
18.
625
21
_
4,675
28.
31.
2.
12.
146.
232.
81.
31.
26.
58.
215.
7
1
7
1
4
8
5
3
1
9
1 •
8
Mt.
States
9
1,836
610
783
40
-
8,559
3,983
405
8
391
-
389
_
8,323
400.2
39.5
20.4
21.2
19.7
158,0
88 4
.26.1
9.1
50.2
551.7
Pacific
10
297
262
287
11
401
4,304
1,804
942
-
193.
-
373
_
3,682
330.
223.
122.
435.
933.
928.
101.
15.
13.
. 26.
207.
5
2
4
7
2
0
3
9
7
0
9
3
U.S.
Total
63,181
9,201
15,853
842
2,170.2
53,859
25,493
11,863
1,497
1,305.1
55,796
1,213.5
3£5.6
61,748
2,336.4.
1,133.5^
524.9^
744.1^
- *
1,531.6^
3,170.8
661.4
317.0
/* /
jU
*3 /
485.5^'
1,933.1
. Dept. Commerce Reports. . . '
Otte from S.C.S.
Land Use Policy Review, 1973.
2J USDA Statistics & USDA-SCS National Inventory Surveys indicate that
but not harvested-! 5,
total croplands
000,000-30,000,000; Idle or fallow 45,000,000-50,000,000
Native pasture and range and
4/
— Data from Washington
* N^tPt St'tt.
5/12-75
grazed woodlands may occupy another 775,646,000
by phone
may
include
as much as
and Cropland Pasture-65,000
acres.
(1) Planted
,000 acres;
from Paul Andrilenas, ERS.USDA.
-all o»*nris. O.lr. t.otil croplands and Recional Totals -
x 105
-------
be most affected. It would be difficult to place the regions in priority
orde'r as each may have its own place in the agricultural sector. On the
basis of total acreage of high-value or sensitive crops produced, they
would rank in the following order: (1) Southeast (2,282,300), (2) Pacific
(2,023,000), (3) Appalachian (1,171,000), (4) Lake States (813,000), (5)
Northeast (678,000) (Table 9).
A ranking made by state specialists did place the Corn Belt states high
on the list as well as the Delta states. The lowest and least mentioned
regions were the Northern Plains and the Mountain States, even though
(see Table 5) the Northern Plains has the largest potential crop acreage
and second highest harvested acreage and the two regions combined have
nearly 30 percent of the total lands in the 48 states (Table 5). Producing
dominately small grains and hay, these two regions have less need for
concentrated pesticide usage (Table 9).
Ranked according to total pesticides usage, the top five regions would be
in order: Corn Belt, Southeast, Delta, Pacific and the Southern Plains
(Table 6). The Southeast Region is the greatest user of fungicides
(cotton, tobacco, and fruits); the Corn Belt the greatest us°r of herb-
icides (corn and soybeans) and the Southeast leads also in the use of in-
secticides. The Southern Plains leads in the use of defoliants and desic-
cants (chiefly on cotton and sorghums) with the Pacific Region second
in quantity of use. The Pacific leads in the use of fumigants with the
Appalachians and Southeast in a near-tie for second place.
Again, studying minor crops which could be more severely affected by with-
drawals, delays in registration r. - too severe restrictions in pesticide
usuage, the ranking could be Cc .'It, Lake States, North Plains, Pacific
and Mountain States (See Table In this case, one crop, broomcorn,
is responsible for putting the . ;ain States into the top five and pop-
corn and sunflower seed produce ., acreage-wise, places the Northern
Plains into this group. The monetary value is not given here—only acre-
ages of minor crops.
Fruits and nuts are relatively expensive crops and require large amounts
of pesticides (43,512,000 pounds or 8.8 percent of the total). Ranked in
order by total acreages are Pacific, Southeast, Northeast, Lake States and
South Plains (Texas) (see Table 8).
Out of all this, one might say the top two most likely impacted regions
would be the Pacific and Southeast with the Northeast and Delta states and
the Corn Belt and Lake states competing for second and third place group-
ings. The Southern Plains and Appalachian states while having critical
and special problems of their own would likely be in the next lower bracket.
The Mountain States and Northern Plains states pose by far the fewest prob-
lems of any of the agricultural regions. Thus, the two regions likely to
be most severely impacted and the two regions likely to be least affected
seem fairly apparent.
19
-------
D. Potentials for Expansion of Agricultural Lands and Pesticide Use
The everpresent problem of man, land and food and the increasing pressure
for expanded food production forecasts an increasing need for agricultural
chemicals. Conferences on these problems are so numerous and the cry for
action so demanding that a hard look at some basic facts is needed to
obtain a true perspective of the problem. Several sets of data are pre-
sented in the following tables which will enable one to see the potentials
for expansion of food production in the United States and in the world.
1. Present and Potential Land Use in the United States
Table 10 summarizes the present land uses and available land areas for
the United States and its possessions. It is clear that the crop-
land portion of our resources is limited and occupies only 20.5 percent
while range and pastured woodland occupies 42.6 percent of the total
land area. There is abundant land for raising livestock that will not be
used for crops because of topographic or climatic restrictions.'
A large part of our land is suitable only for meat production. Major
pest control programs need to consider the needs for nearly one billion
acres of grazing lands and nearly one billion acres of trees (1/3 overlap)
in contrast to less than one-half billion acres of cropland. Table 13
shows however that very minor amounts of pesticides are used on these
vast resources. Also, a pest control program for cropland in Alaska
with only 3/10,000 percent is meaningless but would be really significant
in Puerto Rico where 62 percent is cr. -Hand. Integrated, pest control
programs need to consider these basic Tacts as well as the specific pest
or crop.
2. Potential Usability of Land Resources
The USDA Soil Conservation Service has for many years used a system of
classifying land as to its use capabilities, coupling this with the needed
conservation arid environmental protection measures needed to obtain maxi-
mum sustained use with minimum erosion losses. Table 11 shows this
classification of the United States, its possessions and territories.
Classes I, II and III constitute the lands suitable for continuous culti-
vation with increasingly difficult management required from I to III;
Class IV is marginal for cropland use but can be intermittently used under
very careful control; V, VI and VII are classes suited only to grass or
free cover with VII being the most hazardous to use. Class VIII is waste
land or non-productive of agricultural goods. Only 674 million acres
fall in the first three classes or 29.7 percent and, of this, the top
grade land of Classes I and II is only 15.5 percent or about 1/7 of our
land resources. It is on this land with intensive farming practices
that the United States' production of food and fiber is the envy of the
world.
20
-------
Table 10.
Land use distribution in the United States, Island possessions and trust territories—
(acres)
AREAS
U. S. 48 STATES
ALASKA
Hawaii
PUERTO RICO
GUAM
SAMOA
VIRGIN ISLANDS
CORN ISLANDS
CANAL ZONE
TRUST TERRITORIES
TOTALS
Grand Total = 2,318,$
TOTAL LAND
AREA
1,896,958,720
359,506,680
4,100,000
2,199,000
131,000
48,640
84.,000
1,280
237,^
5,375,760
2,268,642,520
)37,406 acres.
CROPPED
LAND
465,000,000
12,000
465,000
1,367,000
35,ooo
15,000
16,000
200
5,000
20,000
466,935,200
PASTURE &
RANGE
633,000,000
363,000
796,000
152,000
54,000
—
21,000
180
5,000
634,391,180
WOODLANDS
GRAZED 1
301,000,000
30,000,000
300,000
75,000
7,000
5,000
7,000
100
. —
835,000
332,229,100
FOREST LAND
WT GRAZED
31^,958,720
119,031,680
939,000
150,000
25,000
24,640
20,000
200
192,440
1,000,000
436,341,680
URBAN-IND.
TRANSPORT
123,000,000
100,000
350,000
225,000
5,000
2,000
6,000
500
25,000
20,000
123,733,500
WASTE
LANDS
60,000,000
210,000,000
1,250,000
230,000
5,000
2,000
14,000
100
10,000
3,500,760
275,011,760
WATER AREAS
37,287,680
12,797,200
11,360
22,000
4,680
360
1,126
. — -
116,480
54,000
50,294,886
fNJ
1 / No complete source of data was available for all items, particularly for the islands, and estimates are based on
such data as was available. Sources used include: The 197- World Almanac; 1967 USDA Land Resources Inventory;
An Inventory of land and Water Resources by C.H. Wadleigh and AA Klingebiel, ASA Special Publ. 7,1966; Major
Land TJses of the United States, ARS-USDA AIB 168, 1957; Basic Natural Resources Considerations in Land Use by
W. H. Johnson, SCSA Land Use Policy Report, 1973.
-------
Table 11. Distribution of land use capability classes in the states, possessions and trust territories—
(Areas in 1000s of acres)
ro
ro
AREAS TOTAL LAND rTA<,q T
ocooooooooo SURFACE CUSS X
UNITED
ALASKA
Hawaii
PUERTO
GUAM
SAMOA
VIRGIN
STATES (48)1
(49th)
(50th)
RICO
ISLANDS
CORN ISLANDS
CANAL ZONE
TRUST TERRITORIES
,896,958
559,506
4,100
2,199
131
; 48
.7 51,590.0
•7 ~ ••*»••
.0 1Q.O
.0 20.0
.0
.64
CIASS II
300,768.7
5.0
50.0
60.0
5.0
_ -
84.0 — -
1
.28
,237.44
— .
5.0
5,375.76
CLASS IH
319,947.9
10.0
500.0
787.0
25.0
10.0
10.0
— -
20.0
10.0
CLASS IV
225,895-9
20.0
50.0
500.0
10.0
5.0
10.0
20.0
10.0
CLASS V
45,768.8
40.0
240.0
50.0
5.0
1.0
5.0
20.0
5«»o
CLASS VI
415,687.6
58,800.0
1,000.0
200.0
40.0
5.64
20.0
0.59
62.0
500.0
CLASS VII
477,299.8
90,63JU7
1,000.0
352.0
41.0
25.0
25.0
0.59
100.44
1,350.76
CLASS VIII
60,000.0
210,000.0
1,250.0
230.0
5.0
2.0
14.0
0.1
10.0
3,500.7
WATER
SURFACE
37,287.7
12,797.2
11.36
22.0
4.68
0.36
1.126
- —
116.48
54.00
TOTALS
2,268,642.52 51»620.0 300,893.7 321,319.9 226,520.9 46,134.8 476,315.8 570,826.2 275,011.6 50,295.00
FOOTNOTES: I/ Specific data is available for non-Federal lands in the 48 states. All other values are adjusted from
general information on land use, relative character of the land areas and geography...unverified.
Top-grade land ( Classes I + H) is estimated at 15°5% of the land area; land non-usable for food or
fiber is estimated at 20$-; The maximum cropland ( Classes I + H + III) is estimated to be reduced
by urban-industrial development, farm wastage, idle lands, cropland pasture to leave about 500 million
acres as potential; deducting 320 M. now harvested, leaves 180 M. acres as maximum cushion for e*.
pansion of crop acres in the future.
-------
Table 12. Present land use in United States and possessions by types of use and land classes
(acres X 1,000)
ro
to
TYPES OF LAND USE
CLASS I CLASS n
A. 27,3^3.3 189,798.4
TOTAL CROPLAND B. 41,225.6 189,858.4
Cropped and A> 23,343.3 162,798.4
Harvested B< 35^00.00 164, 195.0
Cropland A. 3,000.0 19,000.0
Pasture B. »..( no estimate)
Idle or Fallow A. 1,000.0 8,000.0
B. 1,500.0 8,500.0
GRASSLANDS A. 3,661.9 43,571.7
B. 4,432.9 48,736.6
WOODLANDS A. 3,6l9«0 43,570.0
Grazed B. 4,319.0 48,735.0
FOREST A. 0.5 1.7
Not Grazed B. 1.0 2.5
OTHER (Urban,Indus- *' I'fj!?"* i?'Si ?
trial,Parks, Trans-c* A»WA-3 O.:>°A.*
portation, Homes)
WASTELANDS... (Include s rocks, barren areas,
LAND USE CAPABIllTl CLASSES ( USDA SCS)
CLASS III CLASS IV CLASS V CLASS VI CLASS VII
148,101
154,487
109,517
114,240
18,000
20,583
21,500
65,380
67,380
77,011
77,872
822
1,383
20,019
20,196
.3
.1
.9
.0
oO
.4
.0
.4
.4
.0
.9
.8
•5
.9
.0
dunes, lake
INLAND WATER AREAS ...(estimated inland water areas
49,740.0
55,740,0
28,740.0
32,200.0
9,000.0
12,000.0
13,500.0
5M37-9
73,827.9'
57,000.0
76,500.0
521.6
1,345.4
7,781.6
19,107.6
1,722.0
1,845.0
222.0
235.0
1,000.0
500.0
500.0
10,762.5
11,533.7
(n.e.)
500.0
28,843.5
30,411.1
1,722.0
1,845.0
14,953
17,779
2,953
3,500
7,000
5,000
6,000
166,627
265,000
51,300
63,802
88,867
109,214
7,263
20,520
.7
.1
.7
.0
.0
.0
.0
•3
.0
.0
.2
.9
.0
.2
•5
& sea shores, marshes, ic elands
including permanent streams and
lak
5,924.7
6,000.0
424.7
430.0
5,000.0
500.0
500.0
139,229.7
163,479.7
50,000.0
60,499.2
142,192*0
293,984.2
8,887.0
46,863.1
, tundra,
CLASS VIII
.....
.....
TOTALS
437,583.4 !/
466,935.2 2j
325,000.0
350,000.0
65,000.0
....
2,274.2
(excluded)
6,538.1
(excluded)
18,429.7
(excluded)
275,011.8
etc.)
47
52
485
634
290
332
448
436
123
275
50
,
583.4
,000.0
,
,
,
,
,
,
•
»
,
645.6
391.2
000.0
229.1
988.1
341.7
734.9 iy
011.8
295.0
TOTAL LAND AREAS A. 36,195.2 290,478.2 311,335.^ 169,181.1- 43,050»0 277,712.1 296,233.4 27,240.0 1,452,873.0
B. 51,620.0 300,893.7 321,319.9 226,520.9 46,134.8 476,135»8 570,826.2 275,011.8 2,268,642.5
FOOTNOTES;- i_J Based on the national Soils Inventory of privately owned lands, USDA Bull.317,1962; Wadleigh & Kilin-
gebiel, ASA Spec. Publ.7,1966; A. A. Klingebiel, Proc. l6th Agr. Res. Institute, 1967; and USDA Agric-
ultural Handbook 455; 1973-
2 / Extrapolated from above to cover all U.S. lands in states and possessions using World Almanac; Land
Use by W. M. Johnson, SCSA Land Use Policy Report, 1973; ARS-USDA AIB 168, 1957 and other sources.
3 / These lands not further divided so acres of parks, wilderness areas having some livestock or wild-life
use are not differentiated.
-------
Table 13. Present land use, maximum potential land use and
estimated probable land use by 1985-2000
LAND USE
CROPLAND (total)
PRESENT LAND USE / MAXIMUM CROP USE / PROBABLE CROP USE/CHANGES IN USE
acres X 106 % acres X106 % acres X10 % acres X106 ^
CROPLAND (total)
Cropped
Idle + Fallow
Cropland Pasture
, ,Harvested
PASTURE & RANGE
GRAZED WOODLAND
FOREST(Not Grazed)
URBAN-Industrial
Trans., other
WASTELANDS
WATER AREAS
466.9
350.0
30.0
65.0
313.7
634.4
332.2
436 o4
123 o7
275.0
50o3
15.09
1.30
3.75
13-53
27.36
14.32
18,82
5.33
11.86
2.17
700.
525.
50.
125.
472.
524.
229.
395-
0
0
0
0
J v *" ^ V /
3
7
6
144.0
275-
50.
0
3
22.64
2.16
5-39
6) 20.37
22.61
9.90
17.06
6.21
11.86
2.17
600.0
450.0
50.0
100.0
405,0
5^9.3
279.7
395-6
144.0
275.0
50.3
19
2
4
.40
.16
•31
186
100
20
35
.6
.0
.0
.0
17.47 91o3
23
12
17
6
11
2
.68
.06
.06
.21
.86
.17
85
52
40
20
0
0
.1
•5
.8
•3
.0
.0
+ 39*97 U
+28.57
+66.67
+53.84
+29.10
-13.41_2_
-15.80
- 9.34
+16.41A
0.0 J_
0.0
TOTALS (U.S.&
Possessions)
2,318.9 100.0 2,3l8o9
100.0 2,318.9 100.0
FOOTNOTES:- 1 / Future changes to adjust land use to properly usable classes of land and
to conserve and protect soil resources would envisage retirement of 53>^94
-------
3. The Present Use of Land Classes in the States
In spite of our enviable record, however, we have not made the best use of
our land resources in harmony with their use capabilities. The silt-laden
streams are evidence of continuing erosion where conservation practices
either have not been applied or are inadequate. A look at Table 12 will
shed light on this situation. In the first place, not all cropland is
planted and harvested: of the 437,583,400 acres shown as cropland, only
325,000,000 were indicated as harvested in 1967 (317,000,000 in 1972),
65,000,000 was planted to pasture crops and 47,583,000 was fallow.
Also, 22,600,000 of Classes V, VI and VII were being tilled and 49,740,000
acres of Class IV were being tilled. All of these present difficult
problems of management and contribute to wind and water erosion. For best
use of the land there needs to be a shift of 22.6 million acres of land
not suitable for crops and say 30 million of the Class IV lands to grass
or tree production.
But because of the pressure for more production, the U.S. Department of
Agriculture released in 1973-76 60,000,000 acres of land, which had been
in grass and trees, for increasing the acreages of grains, feed crops
and soybeans.
4. Potentials for Expansion of Croplands
As shown in Table 13, we face the need to retire to grass or trees about
53.5 million acres of poorer lands. However, we have enough lands in
Classes I-III and new lands in Class IV to provide replacement and more.
Our maximum potential is about 700 million acres but a probable cropland
total by 1985-2000 A.D. is 600 million with 450 million actually cropped
or a net increase of about 28.5 percent.
It is thi's net in.rease that will exert an expansion on the pesticide
industry. Using the present (1971-72 data) level of usage on an acreage
basis, this would mean an increase of 156,800,000 pounds of pesticides in
the agricultural sector alone by 1985.
Depending on how successful our integrated pest control programs are, this
could be decreased considerably. The next Table, 14, shows that we are
actually treating about 47 percent of the cultivated land. (This table is
subject to much more detailed analysis and is only indicative, not absolute)
However, increased pesticide use could result both from bringing in new
land and from the need to expand usage on our present land. Both deserve
consideration in planning future use and regulation of pesticides in agri-
culture.
5. Worldwide Potentials for Expanding Cropland
A final Table, 15, is included here to point out that the rest of the world
has far more resources than the United States but is much less efficient
in their use.
25
-------
Table 14. Estimates of percent of 1971 crops treated with pesticides
ro
Total
Crop Acres
Crop x 1000 A.
Corn 72,382
Cotton 11,888 .
All fruits & nuts 3,223.1
( Alfalfa 27,787)
Hay (All forage) 6l,748
_ (Cropland pasture. .,65,000)
Range and
pasture • •( 775,646)
Peanuts 1,497
Potatoes Ii305ol
Rice 2,170
Sorghums 16,695
Soybeans 55,796
Sugarbeets 1,217.5
Tobacco 888.6
Wheat 53,869
Other grains 25,. 493
1-Iisc. Crops 2,336.*
Vegetables . 3,170.8
Pesticide Use-'
Total
127,035 1.76
127,040 10.61
100,497 31.18
2,903 0.047
8,669 0.01
40,764 27.25
9,072 6.95
7,985 3.68
11,538 0.69
42,140 0.75
2,977 2.45
14,317 16,11
14,771 0,27
12,873 0.50
14,202 6,07
32,991 :iQ.4o
Max. Use zr
Avg. Chem.
Acre x 1000
35,993 h
6,384 i
1,245 f
480 i
5,988 h
1,164 h
517 h
1,758 h
3,395 h
9,152 h
242 h
716 m
19,268 h
7,504 h
814 h
699 i
Accum. Max.
All Ingredients
of 1 Class
Aero x 1000
80,384
17,990
5,413
2,776
7,532
2,043
998
2,646
11,525
37,684
1,539
954
25,505
12,512
3,139
3,160
Estimated Percent
At a Reasonable Use
% by Max.
Chen.
50.0*
46.0*
1.7*
0.7*
77.8*
40.0*
81.056
20o056
16,056
20.0*
81oO*
36.0*
30.0*
33oO*
28.0*
Totals 2/ (cropland313,680.0 Jj 588,578 1.79 — — —
Est. No.
Repeats
2
4
5
2
1
5
3
2
2
2
2
5
1
11/3
3
H-
2
.......
Estimated — '
Treated Land
Avg, Ibs.
1.11
2.94
7.0
0.5
1.0
6.0
3»o
2+
1.25
0.75
2+
3.4
0.75
0.75
2.7
3+
2.0
r,st.«
80*
90*
90*
5*
JL)fe
Q0«
70*
85*
30*
50*
60*
95*
36*
5C*
75*
85*
47*f
I/ Active ingredients including sulfur but not petroleum.
2/ The average application por trip is estimated from principal .chemicals used and their recommended rates. Further study is
needed here to check average number of applications and average rate for all cheraicals used.
3/ Excluding pasture and range, fallow and idle and cropland pasture.
L/ Symbols: h = herbicides, f = fungicides, i = insecticides, m = miscellaneous chemicals.
-------
Table 15. World population/land ratios and arable lands per capita—
ro
REGION.
NCRTK AMERICA ^
LATIN AMERICA
WESTERN EUROPE
E. Europe + USSR
AFRICA
ASIA (less USSR)
OCEANIA
WORLD TOTALS
POPULATION World GROSS AREA World ARABLE LAND World GRASSLANDS World pR^TS1' World
(millions) % acres X 10* % acres X 106 % acres X 10* % acresXU10* %
1 237.0
265.0
344,4
360.0
3^-5
2,055.8
19.37
3,632.1
DEVELOPED REGIONS 1,028.0
LESS DEVELOPED
REGIONS
FREE WORLD
CCMMUNIST BLOC
2,604.6
2,452.9
1,179.0
6.52
7.29
9.47
9.90
9.48
56.56
0.53
100.00
23.65
73.65
69-35
30.65
^,733-5
5,663.5
932.3
6,208.0
7,492.0
6,803cO
2,103.0
33,935.3^
13,643.0
19,251.0
24,105.1
8,788.9
13-95
16-69
ZW
18.29
22.07
20.04
6.19
100.0
41.5
58.5
74.9
25.1
566.0
252.0
2..0
68.0
583.0
1,073.0
69.0
3,741.0 -
1,563.0
1,908.0
2,451.5
1,019.5
11.95
7.2
7,0
19.8
16.8.
30.9
2.4
^ 100.0
45.0
55.0
70.6
29.4
688»0
913.0
140.0
967.0
1,463.0
1,077.0
1,104.0
6,352.0
2,899.0
3,453-0
4,946.0
1,406.0
10.8
14.4
2.2
15.2
23.0
17.0
17.4
100.0
45.6
54.4
77.9
22.1
850.0
850.0
280.0
1,495.0
1,125.0
1,350.0
300.0
6.250.0
2,925.0
3,325.0
4,150.0
2,100.0
13.6
13.60
4J&
23.92
18.00
21.60
4.80
100.0
47.0
53.0
66.4
33-6
Acres:
per capita
3.6
3.2
0.8
4.15
3-25
0.67
15.8
(1.7)
(2.8)
(1.28)
(1.7)
(1.8)
FOOTNOTES:- \J North America includes only Canada, United States and Possessions. Mexico- is included with the
Latin American countries.
2 / The total world figure is probably in error due to compounding of some figures...data sources are
not always clear as to countries or portions included or excluded.
_3/ Sources include UNFAO reports on world conditions, 1974 World Almanac, ERA bulletins,of food prod-
ustion sources and acreages and others.
General Estimates, indicate that only about 2.5 billion acres are harvested annually.
-------
North America has less than 12 percent of the world's cropland, yet the
United States and Canada ship nearly 80 percent of all agricultural ex-
ports and have done so for a decade or more. Our potential resources in
relation to population are comparable to South America, Africa and the
Communist Bloc (excluding China). Western Europe has little more crop-
land per capita than Asia but provides a much higher standard of living
for its people. Much higher productivity per capita, enabling imports
provides Western Europe with the second highest standard of living in
the world.
The world is using, at various levels of efficiency, nearly 3.75 billion
acres of land. Land potentially available for agricultural use is estimated
to be 6.25 billion acres. The present use of pesticides in food production
throughout most of the world is far below that used in the United States.
With limited supplies of viable land and continuing population growth,
pressures on the food supply will continue to demand increasing intensifica-
tion in agricultural production. Thus, the outlook for pesticide usage
is for continuing increased demand, necessitating careful evaluation of
systems of control and long range regional and world-wide planning of in-
tegrated pest control programs.
28
-------
PART II
ECONOMIC IMPACTS SOLELY ATTRIBUTABLE TO THE
INCREMENTAL REQUIREMENTS OF 1972 FIFRA AS AMENDED
As indicated in the introduction to this report, 1972 FIFRA as amended is
but the latest in a series of acts, orders and regulations concerned with
the control of the pesticides industry in the United States. As a result,
a substantial part of the total body of regulations governing the pesticide
industry was already in place prior to enactment of the 1972 FIFRA as amended
This part of the report has as its objective the evaluation of those
economic impacts due solely to the incremental requirements resulting from
1972 FIFRA as amended. Further, the evaluation is limited to those sections
of the Act which may have economic impacts on the industry, pesticide users
and consumers.
1972 FIFRA as amended includes 27 sections as follows:
Section Ru1es & Regulations Description
Reference
1. Short title and table of contents
2. Definitions
*3. FR. July 3, 1975 Registration of pesticides
*4. FR. Oct. 9, 1974 and Use of restricted pecticides, certified
Mar. 12, 1975 applicators
*5. Fx. Apr. 30, 1975 Experimental use permits
6. Administrative review, suspension
*7. FR. Nov. 6, 1973 Registration of establishments
*8. FR. Sept. 18, 1974 Books and records
*9. Inspection of establishments, etc.
10. Protection of trade secrets, etc.
11. Standards applicable to pesticide
applicators
*12. FR. May 5, 1975 Unlawful acts
13. • Stop sale, use, removal and seizure
14. Penalties
29
-------
Section (con'd) Description (con'd)
15. Indemnities
16. Administrative procedure, judicial review
17. Imports and exports
18. Exemption of Federal agencies
*19. FR. May 1, 1974 Disposal and transportation
20. Research and monitoring
21. Solicitation of public comments; notice
of public hearings
22. Delegation and cooperation
23. State cooperation, aid and training
*24 Authority of States
25. Authority of Administrator
26. Severability
27. Authorization for appropriations
Each of the sections was reviewed and a determination was made of those
sections which could result in direct economic impacts. These sections,
designated by *, include sections: 3, 4, 5, 7, 8, 9, 12-G (use inconsistent
with labeling), 19 and 24-C (State registrations for local needs).
Guidelines and regulations governing these sections were reviewed and
analyzed and those requirements which represented additions solely attrib-
utable to 1972 FIFRA as amended were identified.
On the basis of these incremental requirements, estimates were made of the
added costs which may result to the pesticide industry, pesticide users,
consumers and society in general.
Data and information necessary for this analysis were developed from a
number of sources. Principal sources included:
. The Environmental Protection Agency
. Contacts with pesticide manufacturers and formulators and
industry trada associations
. Private pesticide testing laboratories
. State Agricultural Experiment Stations and Cooperative Agri-
cultural Extension Services
. U.S. Department of Agriculture
. Published and unpublished research reports and data series from
Federal and State agencies and private research firms.
30
-------
I• Incremental Costs of Pesticide Registration and Reregistration Solely
Attributable to Section 3,1972 FIFRA as Amended
Most of the efforts and costs required to register and reregister pesticides
under 1972 FIFRA as amended are not the direct result of increased testing
and registration requirements specifically imposed by the Act, but stem
from testing and registration requirements currently in force.
At the time that all products are reregistered under 1972 FIFRA as amended,
some registrants will find it necessary to update their product files to
meet existing registration or reregistration requirements and may, in
addition, be required to provide information on those additional, or in-
cremental tests specifically required by 1972 FIFRA as amended.
This section considers only those incremental testing requirements and costs
which are specifically required by 1972 FIFRA as amended. The costs specified
are only those associated with performing those additional tests required by
1972 FIFRA as amended and do not include any costs which will be incurred in
updating product files to meet current registration or reregistration re-
quirements.
A. Incremental Tests Required for Registration or Registration Under
1972 FIFRA as Amended
The requirements for registration of new pesticides or for reregistration of
existing pesticides which are solely attributable to 1972 FIFRA ds amended
are stated by EPA in the Guidelines and Regulations for Section 3 and are
specified by EPA as follows:
\
1. Registration of new active ingredients (AI)
The additional tests required arc as follows:
a. Teratological studies
b. Oncogenicity studies
c. Chronic feeding studies
d. Reproduction studies
e. Mutagenesis studies
f. Chronic fish residue studies
2. Reregistration of existing active ingredients
The additional tests required are as follows:
a. Teratological Studies
b. Oncogenicity studies
' c. Chronic feeding studies
d. Reproduction studies
31
-------
However, it is proposed that in the future, reregistrations will require
the same tests as specified for new registrations. The following quote from
the Federal Register, Vol. 40, No. 129, Thursday, July 3, 1975, page 28250
states EPA's position in this regard."
"EPA realizes that full compliance with the data requirements
imposed on new registrations would be desirable for reregis-
tration as well. By October, 1976, however, EPA must reregister
in excess of 30,000 pesticide products. It would be administratively
impossible to require all of these products to satisfy the data
requirements for new registration. Five year renewals of regis-
tration, however, will be processed on a staggered basis; it is
at this junction that the then current data requirements for new
registration will apply to all products previously registered
by the Agency."
Thus, it would appear that within five years, reregistration of .certain
products for which use patterns or exposures may pose the possibility
of mutagenic or chronic fish residue hazards may require the six tests
listed in (A-l) above.
3. Registration of new pesticide formulations
No additional testing requirements for the registration of new
pesticide formulations are imposed by 1972 FIFRA as amended.
Provided that registration requirements have been met by all
active ingredients used in the formulation of these products,
EPA generally will base registration of pesticide formulations
on test data for those AI which are incorporated in the pesticide
formulations for which registration is sought. (Federal Register
Vol. 40, No. 129, Thursday, July 3, 1975, page 28248). If the
AI have h?en cleared and registered by EPA, then no additional
test data will be required for registration of those products
which use these AI in their formulation.
4. Reregistration of existing pesticide formulations
No additional testing requirements for the reregistrati on of
existing pesticide formulations are imposed by 1972 FIFRA as
amended provided that registration requirements have been met
by all active ingredients used in the formulation of these
products. EPA generally will base reregistrati on of pesticide
formulations on test data for those AI which are incorporated
in the pesticide formulations for which registration is sought.
(Federal Register Vol. 40, No. 129, Thursday, July 3, 1975,
page 28248). If the AI's have been cleared and registered by
EPA, then no additional test data will be required for reregis-
tration of those products which use these AI in their formu-
lation.
32
-------
A listing was developed, by EPA Office of Pesticide Programs, of the tests
which would be required for reregistrati on of all active ingredients. Two
general categories of testing were specified:
a. Incremental required tests only
b. "Other" data required to update registration.
A sample of 660 AI, out of the total of approximately 1,400 including salts
and esters, was reviewed to determine the tests which would be required. In-
cluded in this sample were all AI (248) for which FDA tolerances on agricultural
pesticides, had been established. Also included in the sample were all other
major or significant AI. Consequently, extrapolation from this sample to the
total of 1,400 AI would result in a maximum of testing requirements and would
tend to overstate the economic impacts of registration and reregistrati on,
since it is probable that the remaining pesticides would not require as ex-
tensive test data as those in the sample.
The test requirements for reregistration, as indicated by this sample, are
shown in Table 16. This table indicates those tests which are purely incre-
mental as the result of requirements of 1972 FIFRA as amended.
The final line in Table 16, designated as "total expanded" represents an
estimate of the total cost of providing the incremental tests required for
reregistration of all AI. This cost is an approximation and was based on
the following rationale:
a. 660 represents approximately 47.1 percent of the total of 1,400
AI currently registered with EPA.
b. Included in the 660 AI in the sample are all agricultural pesticide
AI for which FDA tolerances have been established, plus all other
"major" pesticide AI. Since testing requirements for "non-toler-
ance" pesticides, i.e. those which do not require FDA tolerances,
are less restrictive, it would be expected that a smaller pro-
portion of the remaining AI, not included in the sample, would
require the full range of testing.
c. Although approximately 1,400 AI are registered with EPA, not all
are actively produced and this group would probably not be re-
registered. In addition, another group (estimated by EPA at 350)
are not AI in the technical sense that they do not perform alone.
On the basis of this reasoning, it is believed that linear expansion of the
number of product tests as shown in the sample (Table 16) provides a maximum
estimate of the incremental tests and testing costs required by 1972 FIFRA
as amended required for reregistration of active ingredients. However, the
expanded cost will be used in estimating reregistration costs for the industry.
33
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Table 16. Incremental costs associated with the rereglstration of active Ingredients under 1972 FIFRA as amended-'
(Incremental required tests only - does not Include materials or administrative costs)
Pesticide
category
Insecticides
Herbicides
Rodent! cldes
Fungicides
Disinfectants
Total
AI
reg. AI
1n 1n
cat. sample
221 165
407 232
84 16
270 72
427 175
1 ,409 660
Teratogenlc
No. A.I.
Sample
67
57
1
19
113
257
Proj-* $/test
89 $7,000
100 7,000
5 7,000
71 7,000
276 7,000
541 7.000
Test data required
Reproduction Oncogenlc-'
Total
No
. A»I. ,._.._, No. A.I.
proj!$ Sample Proj^ $/test proj!$ Sample Proj^
(000)
$ 623
700
35
497
1 ,932
3,787
29
42
0
8
2
81
(000)
39 $23,500 $ 916 52 69
74 23,500 1,739 32 56
0 - 00
30 23,500 705 21 79
5 23,500 118 32 78
148 23,500 3,478 137 282
-» Tests required and number of active Ingredients for which Incremental testing will be required, provided
Data were developed from review of registration requirements of 660 active Ingredients out of a total of
Included 1n the 660 were all pesticides with FOA tolerances and all other pesticides where "significant"
•J These tests are normally performed together, cost of the combined tests per AI 1s estimated at $100,000.
•J Projection - No. A.I. Total „ Hn , . . r,mn1n noprH.n tnPt
Total
$/test proj.$
(000)
$34.000 $2,346
34,000 1,904
34,000 2.686
34,000 2.652
34,000 9.588
No.
Feeding^
A.I.
Sample proj-' $/test
. 26
39
1
3
24
93
35 $66.000
68- 66,000
5 66,000
11 66,000
59 66,000
178 66.000
Total
proj . $
(000)
$2,310
4.488
330
726
3.894
11.748
Total
projected
test
costs
(000)
$ 6,195
8,831
365
4,614
8,596
28.601
by Office of Pesticide Program, EPA.
approximately 1,400 registered with EPA.
human or environmental hazards were Identified.
No.
-------
It must be emphasized that this statment of incremental tests is limited
to only those additional tests which are specifically required by 1972
FIFRA as amended. All other tests needed to classify a pesticide accord-
ing to Sec. 3 and in existence prior to date of enforcement must be met in
full in order to register or reregister pesticides.
B. Limitation of incremental testing required by 1972 FIFRA as Amended
Not all pesticides will require all of the incremental tests required by
1972 FIFRA as amended. The tests specified, teratological, oncogenicity,
chronic feeding, reproduction, mutagenesis and chronic fish residues are
generally applicable primarily to those products where use patterns indicate
the possibility of direct or indirect (e.g. through livestock feeding)
hazards to humans or where chronic fish residues may be expected. In
general, those products which will require these tests are those for which
FDA tolerances have been established. A computer listing, made in July, 1975
by the Office of Pesticide Programs, EPA, of those active ingredients used
in agricultural pesticides, for which FDA tolerances have been established,
resulted in a listing of 248 active ingredients. It is believed by EPA
that this accounts for nearly all of the AI for which FDA tolerances exist
and that the total number of AI for which the specified incremental tests
would be required would not exceed 300--out of a total of approximately
1,400 registered with EPA.
In addition, under certain circumstances and upon petition by an applicant,
waivers of data requirements may be granted for registration or reregis-
tration by the Administrator. Conditions for waivers are stated in the
Federal Register, Vol. 40, No. 129, Thursday, July 3, 1975, page 28248, as
follows:
"Waiver of a data requirement is permissible only if the Adminis-
trator determines (1) that the composition, degradability, pro-
posed patterns of use or other chemical or physical properties
of the pesticide, relating to an evaluation of the effects on man
or the environment, are fundamentally different from the prpperties
considered by the Agency in establishing the data requirements of
these regulations or the Registration Guidelines, and therefore
(2) that the data are not necessary in order for him to determine
whether such specific pesticide or product will generally cause
unreasonable adverse effects on man or the environment. Generally,
an applicant must initiate the process and submit a written state-
ment setting forth his reasons for requesting a waiver from a data
requirement. In the case of reregistration, however, the Adminis-
trator may initiate the waiver of a data requirement by so indi-
cating in his solicitation of applications for reregistration."
35
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C. Estimated Incremental Costs - Registration of New Active Ingredients
As indicated in Section A, 1, 1972 FIFRA specifies six additional tests,
not previously required for those AI where use patterns indicate the possi-
bility of direct or indirect hazards to humans or where chronic fish residues
may be expected. The costs of performing these tests were obtained from com-
mercial testing laboratories and do not include the costs of pesticides used.
Therefore, the reported test costs have been increased by 10 percent to allow
for materials used and administrative costs of registration incurred by the
applicant. The Registration Division of EPA reports that approximately ten
new chemicals (AI) are registered per year. If all six tests were required
on each of these AI, the incremental costs, due to 1972 FIFRA as amended,
of registering each new AI would be as shown below.
Representative 2/
Test test cost I/ 10% contingency— Total test cost
Teratogenic $ 7,000T700 $ 7,700
Oncogenie )3/
Chronic feeding) 100,000 10,000 110,000
Reproduction 23,500 2,350 25,850
Mutagenic 5,000 500 5,500
Chronic fish
residues 10,000 1,000 11,000
Total $145,500 $14,550 $160,050
— These costs were obtained from private commercial testing laboratories.
It is recognized that the test cost will vary with the product and the
proposed uses, but the costs shown are reported as "representative" for
the tests indicated.
2/
— To allow for cost of pesticides used in testing company review of testing
programs and for company administrative costs of registration incurred by
the company seeking registration.
3/
— These tests are normally performed together.
Based on an average cost of $160,050 per new AI, if 10 new AI required
the full range of tests, the annual incremental costs of registering new AI,
due solely to the incremental requirements, of 1972 FIFRA as amended, would
be $1,600,500. Given the test costs specified above, this would be the
maximum cost since, based on current registrations, not all AI will require
all tests.
/
D. Estimated Incremental Costs - Registration of Active Ingredients
At the present time, 1972 FIFRA as amended requires four additional tests,
not previously required (see Section A, 2 this report), for reregistrati on
of those AI where use patterns indicate the possibility of direct or indirect
hazards to humans or where chronic fish residues may be expected. Table 16
shows the costs of commercial laboratory testing required for reregistration
of existing AI. Again, these commercial laboratory test costs do not in-
clude the cost of pesticides used in the testing process nor the company
administrative costs involved in reregistration. Therefore, these costs
have been increased by 10 percent to reflect these items.
36
-------
Although incremental reregistration requirements for AI beginning October 21,
1976 initially may require only the four tests shown in Part A of Table 16,
EPA has indicated (see Section A, 2 of this report) that within the next five
years additional tests for mutagenesis and chronic fish residues may be
required for reregistration in the same manner as they are required for
registration of new AI. Therefore, reregistration costs must be calculated
for two periods, 1976-1981 and 1981 and thereafter.
Based on Table 16, the estimated incremental reregistration costs for
active ingredients attritutable solely to 1972 FIFRA as amended, would be
as follows:
October 1976 - October 1981
Test Lab Test Cost + 10% No. AI Total Cost
Teratogenic $ 7,700 541 $ 4,165,700
Oncogenic-/ 37,400 282 10,546,800
Chronic feeding^ 72,600 178 12,922,800
Reproduction 25,850' 148 3,825,800
Total - • $31,146,100
— These tests are normally done together at an estimated lab test cost of
$110,000.
Additional Additional testing, after October 1981
Test Lab Test Cost + 10% Est. No. AT- Total Cost
Mutagenic $ 5,500 282 $ 1,551,000
Chronic fish residues 11,000 178 1,958,000
Total - - $ 3,509,000
Discounting this value from 1981 back to 1976 at 10 percent gives a 1976
present value of $2,179,000.
— Estimated by DPRA, mutagenic estimated at approximately same number as
oncogenic, chronic fish residues estimated at same number as chronic
feeding tests.
37
-------
E. Estimated Incremental Costs, Registration or Registration of New or
Existing Formu'lations
As explained in Section A, 3 and 4 of this report, no additional testing
requirements for the registration or reregistrati on of pesticide formulations
are imposed by 1972 FIFRA as amended, provided that registration requirements
have been met by all active ingredients used in the formulation of these
products. Based on this premise, there would be no additional tests or
testing costs, attributable solely to 1972 FIFRA as amended, required for the
registration or reregistration of pesticide formulations. The only direct
costs would be those administrative costs involved in the reregistrati on
process.
F. Estimated Costs - Required Relabeling
Production Cost
1. Labels must be similar
\
One of the important aspects of 1972 FIFRA as amended is to bring
all labels on pesticides, disinfectants, etc. into a common for-
mat. The consumer will know where to look for information regardless
of the type of product. All precautionary statements, ingredient
statements, antidotes, use directions, etc., will be in a precise
location. Illustrative label formats are shown in Exhibits I and 2.
•
2. Cost of label changes
The impact on the manufacturer of AI or reformulator includes those
expenses in producing new art work, plate production, litho masters,
etc., but not the package or printing costs. Certain amounts of
office time are also required but were not included in the cost
estimate.
A study of 17 reformulators and 4 basic manufacturers indicated
that the cost of production of a new label for the reformulator
was $406 and $377 for the basic AI manufacturer. Since some
products have more than one label (e.g., for different size con-
tainers), the reformulator study showed a cost of $524/product.
Data were not available to calculate the per product cost for the
Basic AI producer. Costs varied considerably, from $100 for a
paste-on label to-over $1,000 for .litho masters-for aerosols, 5
gallon cans or 55 gallon drums.
A label cost estimate of $500/product was used as representative for
the 35,500 products. It is recognized that each year approximately
5,500 labels are amended, requiring a change in the label. This
change is normally only a small change in the wording, requiring at
most one new (black) plate at a nominal cost. To reflect this change,
credit has been allowed for one-fifth of the label cost, or $100 on
5,500 labels. Thus total label cost would equal 35,500 labels at
$500 or $17,750,000 minus credit for amended labels (5,500 x 100)
$550,000 for a total label cost to industry of $17,200,000.
38
-------
10
©L/
(8s) t
PRECAUTIONARY STATEMENJS
HAZARDS TO HUMANS
l& DOMESTIC ANIMALS)
DANGER
Do fH»l bdtir.t t|t'iy mill Oo not o»l
in ffy«» AkQid CO"t»C» With «h.n W»*i
• mttk O* '*t|i"*IOf Ol • l»p» PJ»l«J l»y
th« U S Cu'«iu 0* Mtuti to' OfePvitO
P'0i*cl>O". fo1 imifptncy •it*ntar«t* inK.hxor Do not
Ul« O*<">*t IbCh «f 2 *AM C'V* Al'O
p.nf Jmj » product *l 1O*-C to lt»n. bp'v vhin rwr«
o>' i» ii»*eni on
ooui
tf.
hu
titr.
i",:
RESTRICTED USE PESTICIDE
FOR RETAIL SALE TO AND APPLICATION ONLY BY
CERTIFIED APPLICATORS OR PERSONS UNDER THEIR
DIRECT SUPERVISION
M
'' A WJ
NlHWl
ACTIVE INGREDIENT:
PESTOFF TRI SALICYLIC ACID
INERT INGREDIENTS:
TOTAL:
59.50%
40.50%
100.00%
THIS PRODUCf CONTAINS 3.5 LBS OF PESTOFF PER-GALLON
KEEP OUT OF REACH OF CHILDREN
DANGER - POISON
I
STATEMENT OF PRACTlCAL-TREATMENT
1^ 9WALI.OWCO Mrtuct vomi
Mrvm »iit
• t'f»V»'<'#'> rrnmii
ON SKIN In
SEE SIDE PANEL FOR ADDITIONAL
PRECAUTIONARY STATEMENTS
MFC BY A 2 CHEMICALS
TOWN. STATE
5 )l''} ESTABLISHMENT NO. 00475 ^
J/EPA REGISTRATION NO. 1357-42 ([',
DIRECTIONS FOR
ncsTfucrrD USE
CONTINUED
Adhid. *nd m N?.» Vo"
Snout U.«". eoM'Oi
ChjM, vtfifn t*rd>r*B 't not*c«d O*
wurn •nittlt «r>t>r" A"»lli W^wl
A.iun AMI.IV I 7 u-fii p" •»••
Culling o> 7>#«og Oo not •0pi*
mo'i ti>n occ* P«> *«**oo Apoly
'only IO l.»'fH pl«ni#d to pw'« ll*l(Vfl
Ftnil pt
D« PnlO
I CLOVCA *idl »"«i «irt' ML, «id
>U| tirtf 'U( *ilk| **d
7lk, *t.|t 'it, ti.ff ML, >M| 'ik, *id
MINIMUM CALLONACC ncoumc
M(N1 1«n gfilon o' l.n.«nrO iy»f
FIELD CORN Co'n Root^o'/nt Ut*
\ . 3 p.ntt oi (i. Pvtiu r->* 13.000
!>(>•*> 4*«l It •<:<• vxlh 40 ^..h
IPtooQ' Apjity. *l ('l»"1.og. *t * 7
NET CONTENTS ONE GALLON
*H
Exhibit 1. Restricted pesticide, illustrative label format.
-------
I* STATIWCNTt
MdMnDS tO MUUAHJ
U OOuCfTIC ANIMALS)
f f,; AL HA/*«0$
MvjiCAi en CHIUICAI
WA«*,**G.!,-««•«'••••««, I'M
S'OK Uit
CCNCKALCLASSI'lCAHON
MCtNlftVSTAUMCNI
l» A»'1ICAIVD
0* •« •"*• «^« "-I*-'— •** •*
>1CKAO(
OiRlCliOHS
PRODUCT NAME
ACtlvt iNCREDIfNTS
rttrofr IHISAIICVUCACIO - tovn,
INfMlNOMOlfHIf ' MM*.
IOIAI. lobiwi
THIS MOOUCI CONTAINS 1J US Of W10M MM GALLON
KEET OUT OF REACH OF CHILDREN
CAUTION
Ul tlPt FANIL f OK ADDITIONAL
PftCCAUTlOMAAY StATCMCNTS
M*0 »V A Z CHf UlCAU
MTABL1SMMCNT NO. OCMH
IfA KEGIlYftATtOM NO. tMT-4*
fllOCLOVCH »« ht, •*">»,•*
UINIMUU CAUlONAGC
flKOCOHN
* J 000 >.»•»* <*•) |
KIT CONTINTSONI GAUOH
Exhibit 2. General pesticide, illustrative label format.
-------
3. Losses due to over-supply of labels on October 21, 1976
Losses on labels will result from inventories of labeled con-
tainers in the hands of formulators and manufacturers at the time
that change-over to the new labels is required. Containers such
as printed bags (5, 25 or 50 pounds), shipping cartons, litho-
graphed cans, etc., are normally ordered in large quantities
several months in advance of delivery. Manufacturers and formu-
lators cannot estimate their sales exactly and must maintain
adequate container inventories. A $600 inventory loss per pro-
duct would represent only 600 to 1,200 containers and this would
be a minimal inventory of containers, especially considering that
one product may have several different sizes and types of con-
tainers.
Since it is reported that 5,500 labels are amended each year,
based on 35,500 total number of registered products, label inven-
tory losses would be incurred on 30,000 products. On this basis
losses on inventories of labeled containers would be 30,000 products
at $600 each or $18,000,000.
£. Summary, Incremental Costs of Registration and Reregistrati on of Pesticides
Solely Attributable to Requirements of 1972 FIFRA as Amended
Based only on the incremental testing requirements of 1972 FIFRA as amended,
which apply only to active ingredients, the incremental costs of 1972 FIFRA as
amended would be as follows:
1. "One time" costs
Item Cost
a. Reregistration
(a) 1976-1981 $31,146,000
(b) additional cost i/
2 tests, beginning 1981 2.179,000^
(c) Total reregistrati on costs $33,325,000
b. Label costs
(a) Production of new labels 17,200,000
(b) Loss on labels discarded after
October 21, 1976 18,000,000
(c) Total label costs 35,200,000
c. Total "one-time" costs $68,525,000
2. "Continuing" annual incremental costs
a. . Registration of "new" AI $ 1,600,500
- Discounted cost.
41
-------
H. -Section 3c1D Impacts
Section 3clD states "if requested by the Administrator, a full description
of the tests made and the results thereof upon which the claims are based,
except that data submitted in support of an application shall not, without
permission of the applicant, be considered by the Administrator in support
of any other application for registration unless such other applicant
shall have first offered to pay reasonable compensation for producing the
test data to be relied upon and such data is not protected from disclosure
by section 10(b). If the parties cannot agree on the amount and method of
payment, the Administrator's determination shall be made on the record after
notice and opportunity for hearing. If the owner of the test data does not
agree with said determination, he may, within thirty days, make an appeal
to the Federal District Court for the district in which he resides with
respect to either the amount of the payment or the terms of payment, or
both. In no event shall the amount of payment determined by the court be
less than that determined by the Administrator." ]_/
The impact of Section 3clb must be considered from two viewpoints:
* The incremental dollar cost which would result to the industry
as a whole.
* The possible impacts on industry organization, structure and
competition.
1. Dollar impact, industry aggregate - No industry aggregate dollar impact
is projected. Although users of A! data may have to make "reasonable
compensation" to owners of such AI data, such payments would represent
intra-industry transfer payments and the overall cost to the total
pesticide industry should remain essentially unchanged.
2. Impacts on industry organization, structure and competition - It is
possible that formulators, particularly small pesticide formulators,
would be adversely impacted as a result of 3clD. The degree to which
such firms are impacted would depend primarily on three situations:
a. The degree to which owners of AI, primarily manufacturers,
would grant to formulators permission to use AI test data
free of charge.
b. If charges are made, the "reasonableness" of such charges
and the degree to which formulators may have to appeal
"unreasonable" charges through the Administrator, EPA or
through the courts.
c. The degree to which owners of AI may resist access to AI test
data.
- Public Law 92-516, Federal Insecticide, Fungicide and Rodenticide Act
of 1972, as amended, Section 3clD.
42
-------
If charges for use of AI data are high or if formulator access to AI data
are denied by owners of such data, then Section 3clD would tend to prevent
registration for affected products by those who do not own AI data for such
products.
This could result in forcing such formulators to drop such products, could
force certain formulators out of business and could result in a reduction of
competition in the industry. The number of products and firms impacted can-
not be determined until these situations actually occur.
43
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II. Economic Impact of Section 4 - Use of Restricted Use Pesticides by
Certified Applicators
A. General
This section deals with the certification of applicators of restricted
use pesticides and the necessary training, retraining, certification and
overhead necessary to operate the plan as mandated in Section 4 of
1972 FIFRA as amended. The certification or approval of the State Plan
to do the above duties such as administrate, train, certify and enforce
is mandated in the Act. The State Plan approved must conform to and be at
least equal to or can exceed the Federal Standards. The basic thrust of
FIFRA.as amended as passed by Congress is the classification of pesticides
into restricted and general classification according to their hazard and
use and the use of restricted pesticides only by certified commercial or
private applicators.
B. Categorization of Commercial Applicators of Pesticides
1. Categories of Applicators (171.3)
Applicators (other than private) using or supervising the use of restricted
use pesticides are categorized for certification purposes as follows:
a. Agricultural Pest Control
1. Plant
2. Animal
b. Forest Pest Control
c. Ornamental and Turf Pest Control
d. Seed Treatment
e. Aquatic Pest Control
f- Rights-of-way Pest Control
g. Industrial, Institutional, Structural and Health-related
Pest Control
h. Public Health Pest Control
i. Regulatory Pest Control
j. Demonstration and Research Pest Control
State systems of categories should adapt these category identifications
'as needed along with justifiable other categories and subcategories.
•
C. Standards for Certification of Commercial Applicators
Competence in the use and handling of pesticides is determined through
an examination or other appropriate means approved by the Administrator.
»
44
-------
The areas of competency shall be in
1. Label and labeling comprehension
2. Safety
3. Environment
4. Pests
5. Pesticides
6. Equipment
7. Application techniques
8. Laws and regulations
D. Standards for Certification of Private Applicators
The private applicator must possess a practical knowledge of the pest
problems and pest control practices associated with his agricultural
operation; proper storage, use, handling and disposal, and his related
legal responsibility. His practical knowledge shall be in these areas
and by some means certified to be acceptable by the State and Federal
laws.
He must demonstrate competence in the following areas:
1. Recognization of common pests
2. Understanding of the label and label information
3. Application procedures according to label instructions
and warnings
4. Recognization of local environmental situations
5. Recognization of poisoning symptoms and procedures to follow
in case of accident.
E. Standards for Supervision of Non-Certified Applicators by Certified
Private and Commercial Applicators
The supervising certified applicator must understand the requirements
of the supervisory role and must demonstrate a practical knowledge of
Federal and State supervisory requirements.
F. Types of Costs - Section 4
1. Applicators
The applicator will have to travel to the location
for training. Contacts were made by letter with all states
regarding applicator certification programs and replies were
received from 37. Most states propose to offer training
through the Cooperative Extension Service on a county or
regional basis. To reflect this localized training pro-
gram, 25 miles travel each way (50 miles round trip) were
estimated for each applicator.
45
-------
2. Cost of Education and Training and Certification
The education and training of applicators will, in nearly all
instances,, be assigned to the State Cooperative Extension Ser-
vice. It will be necessary for them to create a program for
training all applicators. The cost for training commercial
applicators will be much greater than for private applicators.
In most instances the State Department of Agriculture, or a
related department, will have the duty to examine, grade and
certify the commercial applicators. Costs reported by the States
were the basis for estimating these incremental costs.I/
3. Increased Record Costs to Commercial Applicators
Commercial custom applicators will be required to keep more records
and keep them for ready access to inspection for two or more
years. The increased cost over that which they are keeping
now is estimated to be $100 for each of 100,000 commercial
custom applicators. This includes the large aerial and pest
control companies affected.
4. Cost of Monitoring and Enforcement
Contacts made with the States, revealed that they expect an
average annual expenditure of $210,000 per state to monitor
and enforce applicator certification requirements of 1972
FIFRA as amended. This will include the travel of State personnel
in their monitoring activity and collection and analysis of data or
samples for enforcement if infringements of the Act are noted.
5. Cost of Continuing Education
It is estimated that there will be 10 percent more new appli-
cations (private and commercial) to educate, train and even-
tually certify each year. In addition, the present certified
private and commercial applicators will need upgrading education,
maintenance instruction and refresher courses. Contacts with
the States indicated that these costs would average $50,000 per
per state per year based on present ideas on the way in which such
programs would be maintained.
G. Economic Impact - Section 4
Details of the estimate of the cost directly attributable to Section 4
are given in Table 17. No allowance has been made for time lost by private
or commercial applicators, nor for subsistence involved in their participation
in training programs or testing and certification requirements. As a result,
the estimate is for cash costs only—costs which are directly attributable to
training, testing and certification. In summary, these costs are as follows:
- H.R. 8841, November 19, 1975 provides that private applicators may be
certified without examination on submission of affirmation that they have
completed an approved training program.
46
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Table 17. Economic Impact - Section 4
Cash costs associated with the implementation of Section 4 were estimated as follows:
Type of Cost Basis Cost
A. Initial Costs of Implementing Program
1. Costs to applicators
a. Private applicators
Transportation to training 50 miles @ 12$ « $6.00 x 1.5 million applicators $ 9,000,000
Cost of educational materials $0.50 per applicator x 1.5 million applicators 750,000
Cost of certification $2.00 per applicator x 1.5 million applicators 3,000,000
Total cash cost, privata applicators $12,750,000
b. Commercial applicators
Transportation to training 50 miles @ 12* = $6.00 x 192,000 applicators $ 1,152,000
Transportation to exam 50 miles @ 12$ •» $6.00 x 192,000 applicators 1,152,000
Cost of educational materials $3.00 per applicator x 192,000 applicators 576,000
Cost of certification $40.00 per applicator x 192,000 7.680.000
Total cash cost, commercial applicators $TO,560,000
c. Total cost to applicators $23,310,000
2. Cost to States for education and training programs and applicator certification
a. Private applicator program
State cost of education and training $9.00 per applicator x 1.5 million applicators $13,500,000
State cost of certification $5.00 per applicator x 1.5 million applicators 7,500,000
Less cost of educational materials charged to applicators (la) - 750,000
Less certification fees charged to applicators (la) -3,000,000
Net cost to States $17,250,000
b. Commercial applicator program
State cost of education and training $33,00 per applicator x 192,000 applicators $ 6,336,000
State cost of certification $34.00 per applicator x 192,000 applicators 6,528,000
Less cost of educational materials charged to applicators (Ib) - 576,000
Less certification fees charged to applicators (Ib) -7,680,000
Net cost to States $ 4,608,000
c. Total net cost to States $21,858,000
3. Total initial cost of implementing the applicator certification program
a. To applicators (la + Ib) $23,310,000
b. To States (2a + 2b) 21,858,000
c. Total initial cost $45,168,000
B. Reoccnrring Costs - Annual Basis
1. Increased cost of commerical, custom applicators, record keeping and retention
Cost of keeping and retaining records $100 per applicator x 100,000 custom applicators $10,000,000
2. Cost to States for monitoring and enforcement
50 States x $210,000 per state $10,500,000
3. Maintaining, updating and revising applicator training Information and training programs
50 states x $50,000 per state ' $ 2,500,000
4. Continued training of applicators, based on attendance at workshops, etc. every other year
Applicators' costs, 1/2 of training costs indicated under (1) if programs for updating
operator competence are carried out and applicators attend training sessions every second year 5,739,000
5. Total reoccurrlng costs S28.739.ooo
-------
Initial costs of implementing program
a. Cost to applicators
(1) Private $12,750,000
(2) Comme re i a1 10,560,000
(3) Total 23,310,000
b. Cost to States for training and certification 21,858,000
c. Total initial cost "$45,168,000
Reoccurring annual costs
a. Record keeping, custom applicators $10,000,000
b. State monitoring and enforcement 10,500,000
c. Updating and revising training programs 2,500,000
d. Continued training of applicators 5,739,000
e. Total reoccurring costs $28,739,000
48
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III. Economic Impact - Section 5, Experimental Use Permit
r
A. Requirements
Section 5 of the 1.972 Federal Insecticide, Fungicide, and Rodenticide Act
as amended states in general that any person wishing,to accumulate infor-
mation necessary to register a pesticide under Section 3 of the act may
apply to the administrator at any time for an experimental use permit to:
(1) register a pesticide not previously registered v:ith the agency,
(2) register another use not previously approved for a registered
pesticide.
A substance or mixture of substances being tested under limited circum-
stances to determine if there is pesticidal value need not have an Experi-
mental permit until there is determined that a "pesticidal value exists"
for a particular use.
1. Information required on applications
The following items of information are required on applications for experi-
mental permits
a. General requirements
(1) Name and address of applicant
(2) Registration number of product if registered
(3) Purpose or objectives of the proposed testing
(4) Name, street address, telephone number and qualifications
of all participants in the program.
(5) Name and street address of all cooperators if available at
the time an application is submitted or soon thereafter.
(6) All previous tests conducted to determine toxicity and
effects in or on target organisms at the site of application,
phytotoxicity and other forms of toxicity or effects on non-
target plants, animals, and insects at or near the site of
application and adverse effect on the environment.
(7) Proposed method of storage and disposal of unused experi-
mental use pesticide and containers.
(8) Such other pertinent data requested by administrator.
b. Requirements for tolerance
If used in a manner that a residue can reasonably be expected in
or on food or feed, the applicant must:
49
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(1) Submit evidence that a tolerance or exemption from a
requirement has been established for residues in or
on such food or feed or
(2) Submit petition proposing establishment of tolerance or
exemption for tolerance or
(3) Certify that produce from the experimental program will
be destroyed or fed only to experimental animals.
c. Additional requirements for unregistered pesticide products
(1) Complete confidential statement of composition
(2) Complete chemical and physical properties of each active
ingredient for determining the active ingredients
(3) Appropriate data on decomposition of residues on treated
crop or environmental site or other information for de-
termining entry of persons into treated area
(4) Toxicity tests relevant to potential for causing injury
to users or exposure to people.
B. Comparison - Requirements 1972 FIFRA as Amended with 1964 FIFRA
The 1964 FIFRA provided for temporary permits for shipment of limited
quantities of a product for further testing, usually on a larger scale, to
determine its limitations. Information required to get the experimental
permit included: (1) certification that the food or feed will not be
offered for consumption, except by experimental animals if illegal residues
exist, (2) name and address of shipper and points of origin, (3) proposed
date or dates of shipment, (4) composition of the material, (5) quantity
to be shipped, (6) available data or reference to data on toxicity, (7)
nature of the experimental program, (8) percentage of material to be supplied
without charge to the user, (9) statement "for experimental use only" and
(10) proposed lahr-ling. The requirements of 1964 FIFRA were such that ex-
perimental permits could be easily and readily obtained and potential pesti-
cides could be tested broadly on an experimental basis. In addition, many
testing programs were under the direction of State and Federal agricultural
experimental stations or State agricultural extension services and no per-
mits were required for such testing programs. As a result, many products
were labeled without the need for experimental permits.
1972 FIFRA as amended requires, in general, the same types of information
as was required in 1964. However, certain provisions of the 1972 Act differ
from 1964.
1. No specific exemption is granted to "Federal or State agencies
authorized by law to conduct research in the field of economic
poisons." This would mean that under 1972 FIFRA as amended,
all State Agricultural Experiment Stations, State Agricultural
Extension Services and USDA Agricultural Experiment Stations would
now be required to get experimental permits. In the past, many
pesticide firms conducted pesticide field tests through or "in
cooperation with" experiment stations and extension services,
without experimental permits, and under 1972 FIFRA experimental
permits would be required.
50
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2. Requirements are added for information on disposal of pesticides
and containers.
3. Increased requirements for data on chemical and physical properties,
toxicity and phytotoxicity, qualifications of participants,
residue decline data and environmental data. In general, the
amount of detail required in the application has been increased.
4. Pesticides under experimental use permit may not be sold or dis-
tributed other than through participants and may be used only
at the application site of a cooperator.
5. State agencies may issue experimental permits for testing within
the State, but all provisions of Section 5 will apply equally to
State plans.
C. Economic Impact
The number of experimental permits issued is expected to increase as pro-
visions of 1972 FIFRA as amended are enforced. EPA reports that prior to
1975 approximately 100 experimental permits were issued annually. They
expect the number to increase to 150 in 1975 and 400 or more by 1976. This
increase will result from two factors:
1. More complete enforcement of the experimental permit requirements.
2. The requirement that Federal and State agencies now obtain ex-
perimental permits.
The incremental impact of 1972 FIFRA, would be associated with item 2,
permits required by Federal and State agencies, and by the increased data
and detail required as described in Part B of this report.
The economic impacts on industry associated with the experimental permit
system arise from two sources:
1. More complete enforcement and monitoring of rules and regulations
regarding experimental permits as opposed to enforcement under
1964 FIFRA. The fact that such activities will be stepped up will
result, in increased costs to industry. However, the increased
cost is a result of enforcement of provisions required by 1964
FIFRA as well as by the 1972 Act and thus is not a true incremental
cost attributable only to the new requirements of 1972 FIFRA.
2. The incremental requirements of Section 5, 1972 FIFRA as amended.
51
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The determination of the quantitative incremental impact of Section 5 can
only be approximated, but it is evident that large plot testing of a pesti-
cidal material previously done by Federal or State agencies in cooperation
with industry without a permit, will now require a permit.iy EPA reports that
prior to 1974 only about 100 experimental permits were issued each year but
by 1976 they expect that 400 or more permits will be issued. It is assumed
that approximately half of these additional permits will result from tests
previously conducted by Federal and State agenices without the requirement
of a permit. In effect, this arrangement permitted industry to conduct
field tests on products without extensive toxicological and ecological
testing required by experimental permits. .If, as a result of these tests,
a candidate product appeared to have commercial value to the point that as a
decision is made to proceed with registration, then the necessary toxicologica"
and ecological tests could be completed, an experimental permit applied for,
and the data obtained under the experimental permit would be used in regis-
tration. Under the 1972 FIFRA experimental permit program, firms are re-
quired to develop data necessary to get an experimental permit earlier in
the registration process.
It is known that a relatively high proportion of pesticidal products field
tested are dropped and are never registered. If it is assumed that out of
400 experimental permits issued, 250 products are dropped prior to reaching
registration, then the cost of obtaining these 250 experimental permits
represents an incremental cost of Section 5 to the industry. This assumption
is based on the following reasoning. If, in the past, these products could
be screened by State and Federal agencies without experimental permits, then
only the top candidates would be tested under experimental permit. It is
also recognized that in order to accomplish such screening, certain tests
required for an experimental permit (composition, chemical and physical
properties, human toxicity, etc.) would have already been done. However,
many of the tests required for toxicity on target organisms, non-target
plants, animals, insects and adverse environmental effects and residual
effects would not have been done at that time.
For those products for which registration is completed (estimated 150 out
of 400), experimental permit testing requirements would provide input for
Section 3, registration, requirements. For those 250 products dropped,
the cost of these tests would be lost. _
Industry estimates place the cost of testing required for issuance of an
experimental permit at $100,000 to $300,000. This includes the general
chemical and environmental tests required, toxicology, tolerance require-
ments, residue tests, disposal plans, details on proposed testing program,
sites, quantities and other information required for the experimental
permit. A part of this information would have been required prior to 1972
FIFRA for testing done without experimental permits. For purposes of this
analysis, it is assumed that this would be equal to approximately half the
present estimated costs of getting an experimental permit.
H.R. 8841, November 19, 1975 provides that public or private research
and educational institutions may be issued experimental permits by the
Administrator under such terms and conditions as the administrator may
require, provided that such pesticide may be used only for'purposes of
experimentation.
52
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If it is assumed that the incremental costs required for an experimental
permit vs. non-permit field testing is $100,000 per product, and if it is
assumed that 250 candidate products, out of 400 tested under experimental
permits, are dropped prior to registration, then the incremental cost re-
sulting from Section 5, due primarily to the fact that all field tests
must now be done under experimental permits, would be $25,000,000.
D. Impacts of Delays in Granting Experimental Permits
A matter of concern to industry is the time required from the submission
of an application for an experimental permit until the permit is issued
by EPA. In the comments received from industry on Section 5, 40FR 18781,
it was stated, "The proposed regulations indicated that the Agency would
require at least 90 days to process applications for experimental use per-
mits. Several commentators indicated that a 30 or 60 day limit would be
more appropriate. The Agency recognizes the importance of processing
applications in a timely manner and has established special procedures for
the review of applications. Because of the heavy workload in implementing
the new law, the Agency cannot guarantee that applications will be acted
upon in any specified period of time. In any event, applications will be
processed as expeditiously as possible."
Industry's concern stems from their need to get field testing underway in
the shortest possible time, once a decision to proceed has been made. If
processing of experimental permits is delayed, either because of backlog
of applications or because of requests for additional test data to support
the application, then the firm may miss a crop season and completion of ex-
perimental testing may be delayed 12 months. In a study conducted for
EPA ]_/ it was reported that current industry experience (1974) indicated an
average of 7 months may be required for obtaining an experimental permit.
If unusual delays are encountered in obtaining an experimental permit, and
registration of the pesticide is delayed, then the firm may lose the sales
volume for as much as a year. Although this does not constitute a cost
directly attributable to the requirements of 1972 FIFRA as amended, it does
represent an issue of major concern to the pesticide industry.
Evaluation of the Possible Impact of Pesticide Legislation on Research
and Development Activities of Pesticide Manufacturers, Arthur D.. Little,
Inc., Feb., 1975.
53
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IV. Economic Impact - Section 7, Registration of Establishments
A. Section 7,1972 FIFRA as amended, requires the following
"(a) Requirement. - No person shall produce any pesticide
subject to this Act in any State unless the establishment in
which it is produced is registered with the Administrator.
The application for registration of any establishment shall
include the nan:? and address of the establishment and of the
producer who operates such establishment.
"(b) Registration. - Whenever the Administrator receives an
application under subsection (a), he shall register the
establishment and assign it an establishment number.
"c) Information Required. -
"(1) Any producer operating an establishment registered
under this section shall inform the Administrator within
30 days after it is registered of the types and amounts of
pesticides -
(A) which he is currently producing;
(B) which he has produced during the past year; and
(C) which he has sold or distributed during the past year,
The information required by this paragraph shall be kept '
current and submitted to the Administrator annually as required
under such regulations as the Administrator may prescribe. "
"(2) Any such producer shall, upon the request of the Ad-
ministrator for the purpose of issuing a stop sale order
pursuant to section 13, inform him of the name and address
of any recipient of any pesticide produced in any registered
establishment which he operates." I/
The proposed regulations for Section 7 were published July 24, 1973 in the
Federal Register (38FR 19841) and subsequent to receipt of comments, the
final regulations were published in the Federal Register November 6, 1973
(38FR 30558). The regulations include the following sections:
Sec. 167.1 Definitions
Sec. 167.2 Registration procedures
Sec. 167.3 Duration of registration
Sec. 167.4 Labeling requirements
Sec. 167.5 Pesticide reports
I/
Pub. Law 92-516, Sec. 7, page 15.
54
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Sec. 167.2 provides "All establishments, as defined in this part,
which produce any pesticide or device subject to the
provisions of this section, must be registered pursuant
to the requirements of these regulations: Provided,
however, that those persons who produce pesticides solely
for application by themselves are not required to be
registered."
Information required is as follows:
1) Name and address of the company
.2) Type of ownership
(3) Names and address of all producing establishments.
The Agency will provide the company with a registration
number for each establishment.
Amendments (change of ownership or address) must be submitted
by the company within 30 days of such changes.
Sec. 167.3 provides that registration will continue in effect provided
pesticides reports are submitted annually.
Sec. 167.4 provides that the only Establishment Registration Number
which shall appear on the label is that of the final establish-
ment at which the product was produced.
All products released for shipment by October 21, 1974
must bear the Establishment Registration Number regardless
of the date of production. However, the Agency permits
labeling by stickers, tags or stencils to minimize diffi-
culties in adding Establishment Registration Numbers, par-
ticularly to products already in inventory. After the new
label format is promulgated, the establishment number must
appear as directed in the regulations.
Sec. 167.5 requires that pesticides reports be submitted annually for
each establishment and that the reports include*
a. Name and address of establishment
b. Types of pesticides produced
c. Past year's amount of production and sales or distri-
bution of each product
d. Amount of current production of each product (inter-
preted to mean the amount of planned production in the
calendar year in which the pesticides report is sub-
mitted, including new products not previously sold or
distributed). Exhibit 3 is a copy of the report
form and instructions.
55
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Exhibit 3.
.^n'fff. u-s- ENVIRONMENTAL PROTECTION AGENCY
^*«afc;T» PESTICIDES REPORT FOR PESTICIDE-PRODUCING ESTABLISHMENTS
%.^M!U^^ (Section 7, Federal Insecticide, lfunf.icidc, und Rodcnlicidc Act,
f\ w0,tJ> os amenrfod, 56 Stat. 973-999)
MOTE: Read all instructions before completing.
The information reported on this form is treated
1. ESTABLISHMENT NAME
STREET
CITY STATE
6
7
8
9
10
11
12
Form Approved
OMB NO. IS8-R0109
as confidential.
2. EPA ESTABLISHMENT NUMBER
3. SIGNATURE OF ESTABLISHMENT OFFICER
ZIP CODE 4. TITLE 5. DATE (Mo.
, n , n
A. PRODUCT NO. "\COOE B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
•
PKODUCT
CLASSIFICATION (
G. AMT PRODUCED PAST YEAR
I , 1 , , 1 I I
D. PRODUCTION TYPE
(Specily it other)
H. AMT SOLD/DISTR'D PAST YR
I , 1 , , 1 , ,
MARKET PRODUCED FOR I
. AMT PRODUCED CURRENT YR
1,1 ,1,1
F. USE CLASSIFICATION
(Spocily il other)
J. UNIT OF MEASURE
L a LBS. G = GALS
A. PRODUCT NO. \_CODE B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
c
PRODUCT " ' '
CLASSIFICATION (
G. AMT PRODUCED PAST YEAR
I I 1 , I 1 ,
D. PRODUCTION TYP
(Spocily il other)
'
-
H. AMT SOLD/DISTR'D PAST YR
I , 1 , I 1 I
E
MARKET PRODUCED FOR
1. AMT PRODUCED CURRENT YR
1,1 I 1 I I
F. USE CLASSIFICATION .
(Spocily il other)
J. UNIT OF MEASURE .
L = LBS. G = GALS |
A. PRODUCT NO. ^\cooe B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
f~
PRODUCT " "
CLASSIFICATION
G. AMT PRODUCED PAST YEAR
I , 1 I , 1 I ,
D. PRODUCTION TYPE ,
(Specily II other)
H. AMT SOLD/DISTR'D PAST YR
I 1 1 1 , 1 I ,
E
MARKET PRODUCED FOR
1. AMT PRODUCED CURRENT YR
I 1 1 I I 1 I ,
F. USE CLASSIFICATION .
(Specily il other)
J. UNIt OF MEASURE .
L n LBS. G = GALS |
A. PRODUCT NO. \co°E B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
-
PRODUCT " "
CLASSIFICATION (
G. AMT PRODUCED PAST YEAR
. . 1 . I 1 I I
D. PRODUCTION TYPE ,
(Specily il other) i
H. AMT SOLD/DISTR'D PAST YR
1 I i I , 1 , ,
MARKET PRODUCED FOR
1. AMT PRODUCED CURRENT YR
, , 1 I I 1 . ,
F. USE CLASSIFICATION
(Specify it other) 1
J. UNIT OF MEASURE
L = LBS. G = GALS
r
A. PRODUCT NO. \CODE B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
r-
PRODUCT
CLASSIFICATION
G. AMT PRODUCED PAST YEAR
, , 1 I , 1 I I
D. PRODUCTION TYPE
(Specily il other)
H. AMT SOLD/DISTR'D PAST YR
I 1 1 I I 1 I I
E,
MARKET PRODUCED FOR
1. AMT PRODUCED CURRENT YR
, I 1 I I 1 . ,
F. USE CLASSIFICATION
(Specily II other)
J. UNIT OF MEASURE
L = LBS. G = GALS
r
r
A. PRODUCT NO. \COOE B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
•*
CLASSIFICATION
G. AMT PRODUCED PAST YEAR
, I 1 , I 1 , I
O. PRODUCTION TYPE
(Specily il other) 1
H. AMT SOLD/DISTR'D PAST YR
I 1 1 I I 1 I I
E.
MARKET PRODUCED FOR"
1. AMT PRODUCED CURRENT YR
, I 1 , , 1 , I
F. USE CLASSIFICATION
(Specily II other)
J. UNIT OF MEASURE
L = LBS. G = GALS
r
A. PRODUCT NO. \COOE B. PRODUCT NAME
1 1 1 1 1 1 1 1 1 1 1 1 1
PHOOUCT
CLASSIFICATION (
O. AMT PRODUCED PAST YEAR
1 1 1 1 1 1 1 1
D. PRODUCTION TYPE
(Specily il other) p^
H. AMT SOLD/DISTR'D PAST YR
, I 1 , , 1 I .
E.
MARKET PRODUCED FOR
1. AMT PRODUCED CURRENT YR
, I 1 , I 1 I ,
F. USE CLASSIFICATION
(Specily il other)
J. UNIT OF MEASURE
L » LBS. G * GALS
r
r
f~| CONTINUED ON ATTACHED SHEET
FOR EPA USE ONLY
13. SIGNATURE 14. EPA OFFICE 15. DATE RECEIVED 16. DATE REVIEWED
, n , n . , n i R : i
EPA Form 3540-16 (12-73)
56
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Exhibit 3.
'.INSTRUCTIONS FOR PESTICIDES REPORT FOR PESTICIDE-PRODUCING ESTABLISHMENTS (EPA Form 3540-^6)
Section 7(c) of the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (86
Stat. 987), requires any pesticide producer operating an establishment registered under
Section 7(a) of this Act to inform the Administrator of the Environmental Protection
Agency of the types and amounts of pesticides currently being produced, the types and
amounts produced in the past year, and the tyoes and amounts sold or distributed in the
past year. To comply with this requirement, the Pesticides Report is to be completed
and the original and first copy returned to the Regional Office of the Environmental
Protection Agency having jurisdiction over the state in which the establishment is
located (i.e., that office indicated on the accompanying transmittal letter).
ITEM
1 ESTABLISHMENT NAME, STREET, CITY, STATE, ZIP CODE, AND TELEPHONE NTIMBER Enter the
name and address (using the standard two-letter Postal Service state abbreviation)
of the reporting establishment. Item must read as shown on the Notification of
Registration of Pesticide-Producing Establishments. Enter the telephone number,
including area code, of the reporting establishment in the blank space directly
above Item 2, "EPA Establishment Number."
2 EPA ESTABLISHMENT NUMBER Enter the establishment registration number assigned to
the reporting establishment.
3 SIGNATURE OF ESTABLISHMENT OFFICER An individual authorized to sign official
documents for the establishment should enter his signature.
4 Self-explanatory
5 DATE Enter the date in roonth-day-year sequence.
Subitems A through J must be completed for each pesticide produced at the reporting
establishment. This includes all EPA registered pesticides, pesticides produced while
product registration is pending, pesticides produced under an Experimental Use Permit,
pesticides produced for export only, and pesticides produced for shipment in intrastate
commerce. If an establishment produces a product registered by a different company,
the reporting establishment should include that product on its report. Pesticides sold
or distributed by, but not produced at the reporting establishment, should not be
reported. A pesticide produced under various distributor labels should be reported only
as a single product and should not be reported separately for each distributor label.
A PRODUCT NUMBER/CODE
1 If product is registered, enter EPA product registration number; e.g., product
registration number 123-1 would appear as |0|0|1| 2| 3 j^ ]J I I I | I I I
Enter "1" under "Code".
If product has EPA product registration pending, enter EPA file symbol: e.g.,
file symbol 123-REG would appear as |omil|2| 3^R|E|G| I I I I I
Enter "2" under "Code".
3 If product is produced under an Experimental Use Permit, enter EPA permit number:
e.g., permit number 123-EXP-111G wquld appear as [ 0|0|1| 2|T^ E[X|P|-| 1| 1| 1|GJ
Enter "3" under "Code".
4 If product does not come under any of the above, leave product number blank
and enter "4" under "Code". In this case a Chemical Formulation Report must
also be completed (instructions below).
B PRODUCT NAME Enter the name of the product. Must be thr: same as on the registered
label. Maximum 60 characters.
C PRODUCT CLASSIFICATION Enter the one classification cod. best describing the product
01 Insecticide 05 Aleaecide 09 I . fnfectant, sanitizer,
02 Fungicide 06 Nematocide p.i'i ilcide, etc.
03 Rodenticide 07 Plant regulator 10 Aniifouling paint
04 Herbicide 08 Defoliant or desiccant
57
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Exhibit 3.
D PRODUCTION TYPE Enter the code best describing the type of production.
1 Technical material (for manufacturing use only) 3 Repackaging
2 Formulation or blending A Other (specify)
E MARKET PRODUCED FOR Enter the code best describing the market for which the
pesticide is produced.
1 United States 3 Export out of United States
2 United States and export out of United States only
F USE CLASSTFTCATION Enter the code for the use assigned to the pesticide. This
subitcm cannot be completed until pesticides have been classified under Section
3(d) of the Act (86 Stat. 981).
1 General Use 2 Restricted Use 3 Other (specify)
G AMOUNT PRODUCED PAST YEAR Enter the amount (pounrts or gallons) of the product
produced for distribution or shipment at the reporting establishment in the
calendar year immediately prior to the year in which this report is submitted.
Foreign establishments should renort only the amount produced for shipment to the
United States. All amounts should be entered in the following manner: e.g., 10,000
should appear as I I I I |l|n|o|0|0|
H AMOUNT SOLD/DISTRIBUTED PAST YEAR Enter the amount (pounds or gallons) of the
product sold or distributed (i.e., released for shipment) by the reportinc estab-
lishment in the calendar year immediately prior to the year in which this report
is submitted, regardless ofi~Vhen the product was actually oroduced . Foreign
establishments should report only the amount sold or distributed in the United States,
I AMOUNT PRODUCED CURRENT YEAR Enter the amount (pounds or gallons) of the product
to be produced at the reporting establishment in the calendar year in which this
report is submitted. Foreign establishments should report only the amount intended
for shipment to the United States. In all cases, this figure will be considered
an estimate of the current year's production.
J UNIT OF MEASURE Enter the unit of measure used in subitems G, H, and I:
L-pounds Ogallons
If a continuation sheet is required, reproduce the form or otherwise provide the
required information in identical format. Number all continuation sheets in the
upper right-hand corner. Items 1-5 must be repeated on any continuation sheet.
It is a violation to know5ngly falsify all or part of any information submitted on
the Pesticides Report or Chemical Formulation Report (Section 12(a)(2)(M), 86 Stat.
991). The Pesticides Report will be treated as confidential.
INSTRUCTIONS FOR CHEMICAL FORMULATION REPORT
In addition to completing subitems A through .1, a Chemical Formulation Report must
be submitted for any pesticide produced at the reporting establishment meeting the
following criteria:
1 Pesticide is not registered with EPA;
2 Pesticide does not have EPA product registration pending; and
3 Pesticide is not produced under an Experimental Use Permit
e.g., an unregistered pesticide croduced solely for export out of the United States.
The Chemical Formulation Report must include:
1 A list of the chemical names for each active and each inert ingredient used in
the formulated product and the percentage of each by weight (total must equal
100%);
2 The EPA Establishment Number assigned to the reporting establishment;
3 The item number (6,7,8...) on the Pesticides Report and page number, if
necessary, corresponding to the product for which the chemical formulation is
given; and
A The name of the product exactly as it appears in subitem B of the Pesticides
Report.
The Chemical Formulation Report will be treated as confidential.
58
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B. Economic impact, Section 7
Registration of establishment is, in itself, a one-time effort since regis-
tration will remain in effect provided the annual pesticide reports are
submitted as required in Sec. 167.5 of the Section 7 Regulations.
Registration, in itself, requires the name and address of the company, type
of ownership and the names and addresses of all producing establishments.
Application for registration is made on the EPA Application for Registration
of Pesticide-Producing Establishments form. The industry effort in effecting
such registration is considered to be nominal and no cost is assigned.
The principal economic impact of Section 7 will result from the effort re-
quired to complete and submit the annual Pesticides Report as described in
Reg. Sec. 167.5 in A above. A separate report must be submitted for each
establishment for each product produced in that establishment to include
data product classification, production type, market produced for, use classi-
fication, amount produced past year, amount sold/distributed past year and
amount produced current year. Data needed to produce this report are required
by Section 8, Books and Records, of 1972 FIFRA as amended and are specified
in the Section 8 Regulations (39FR 33514) section 169.2 which requires records
on quantities of pesticides produced, received, shipped or delivered and in-
ventories. These records will provide data necessary for completion of items
G, H and I of the Pesticide Report. Items A, B, C, D, E and F do not require
data but are descriptive of the product, its market and use and should present
no problem.
It is recognized that the effort required to produce the information required
for the annual pesticide report will vary by firm according to the number of
establishments within the firm for which reports must be prepared and also
with the number of products produced at each establishment. In addition, the
procedures used by the firm to maintain there records will influence the effort,
and the cost, necessary to extract the data required by the Pesticides Re-
port. Those firms, primarily the larger companies, which have computerized
record systems, may be able to extract the required information rapidly and
relatively inexpensively as compared to smaller firms dependent on manual
record systems.
Although data for items A through H on the Pesticide Report could be deter-
mined largely by a senior clerk, item I (amount produced current year), may
require sales forecasts and would require the judgment of product managers
within the firm. In addition, the completed report would need to be reviewed,
approved and signed by an officer of the firm.
There are approximately 35,500 pesticide products registered with EPA. EPA
Pesticides Enforcement Division reports that there were as of July 1975,
approximately 3,398 firms operatfng 5,352 establishments registered with EPA.
This would indicate that there are* as an average, approximately 10 products
produced per firm and 7 products produced per plant in the pesticides in-
dustry.
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With 3,398 firms and 5,352 establishments, this would mean an average of
1.6 plants per firm. However, a high proportion of the firms in the industry
are single-plant firms.
Since no data exist on the costs to industry for preparing EPA Pesticide
Reports as required by Section 7, contacts were made with firms in the in-
dustry to get their estimate of the effort and cost which would be required
to complete these data and to prepare the required reports.
The following assumptions have been made in estimating the costs of preparing
Section 7 Pesticide Reports from data which the firms must maintain as a re-
quirement of Section 8.
(1) Compilation and analysis of information and data required for
items A through H plus J and background data for I.
(a) To be done by a senior clerical employee, salary $12,000
per year or $46 per day with 100 percent overhead on
direct labor (to cover all personnel benefits, company
general and administrative costs and other overhead items),
resulting in a cost of $92 per day for this employee.
(b) Time required by (a) to compile and summarize information
and data required = one day per product or $92 per product.
(2) Review of background data for item I (amount produced per current
year) and development of production estimates if necessary plus
review and approval of report.
(a) To be done by an officer of the company or by a senior
managerial employee, salary $26,000 per year or $100 per
day plus 100 percent overhead, resulting in a cost of $200
per day for this employee.
(b) Time required - two hours per establishment or $50 cost.
Based on these assumptions, the industry aggregate cost for preparing Section
7 Pesticide Reports, is estimated as follows:
Clerical time, 35,500 products x $92 per product = $3,266,00p
Managerial review time 5,352 establishments x $50 = $ 267,600
Total estimated Section 7 costs to industry $3,533,600
Average cost per firm = $1,040.00
Average cost per establishment = $ 660.00
Average cost per product = $ 99.54
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V. Economic Impact - Section 8, Books and Records
A. Requirements
Section 8 of the Act provides that " the Admin-
istrator may prescribe regulations requiring pro-
ducers to maintain such records with respect to
their operations and the pesticides and devices
produced as he determines are necessary for the
effective enforcement of the the Act." The
regulations, as proposed, set forth the scope
and types of books and records required to be
maintained by producers of pesticides and de-
vices, the periods of time that such books and
records are to be retained, and the procedures
to be followed in the inspection of such books
and records." I/
Sec. 169.2 of the EPA Rules and Regulations for 1972 FIFRA as amended
(39 FR ::3515), states, under Maintenance of Records:
"All producers of pesticides or devices subject
to this Act, including pesticides produced pur-
suant to an experimental use permit, shall main-
tain the following records:
(a) Records showing the product name, EPA
Registration Number, Experimental Permit Number
if the pesticide is produced under an Experimental
Use Permit, amounts per batch and batch identifi-
cation (numbers, letters, etc.) of all pesticides
produced. In cases where a pesticide is not
registered, is not the subject of an application
for registration, or is not produced under an
Experimental Use Permit, the records shall
also show th-e complete formula. The batch
identification shall appear on all production
control records. These records shall be retained
for a period of two (2) years.
(b) Records showing the brand names and
quantities of devices produced. These records
shall be retained for a period of two (2) years.
(c) Records showing the following informa-
tion regarding the receipt of all pesticides and
devices:
(1) Brand name of pesticide or device.
(2) Name and address of shipper.
(3) Name of delivering carrier.
(4) Date received, and
(5) Quantities received.
Pub. Law 92-516, Section 8, page 15.
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These records are not intended to cover receipt
of pesticides used for in-plant maintenance,
extermination or sanitation programs, etc.
Shipping and receiving documents such as invoices,
freight bills, receiving tickets, etc., which
provide the required information will be con-
sidered satisfactory for the purposes of this
section. These records shall be retained for
a period of two (2) years.
(d) Records showing the following informa-
tion regarding the shipment of all pesticides and
devices.
(1) Brand name of pesticide or device.
(2) Name and address of consignee and where
the pesticide is produced pursuant to an experi-
mental use permit the information required under
Section 5 and any regulations promulgated thereto
regarding the distribution of such pesticides.
(3) Name of originating carrier.
(4) Date shipped or delivered for shipment,
and
(5) Quantities shipped or delivered for
shipment.
Such records are required regardless of whether
any shipment or receipt of shipment is between
plants owned or otherwise controlled by the same
person. Shipping and receiving documents such
as invoices, freight bills, receiving tickets,
etc., which provide the required information will
be considered satisfactory for the purposes of
this section. These records shall be retained
for a period of two (2) years.
(e) Inventory records with respect to the
types and amounts of pesticides or quantities
of devices in stock which he ha£ produced. These
records may be disposed of when a more current
inventory record is prepared.
(f) Copies of all domestic advertising of
restricted uses of any pesticide registered for
restricted use for which the producer is respon-
sible including any radio or television scripts
for all such pesticides. These records shall
be retained for a period of two (2) years.
(g) Copies of all guarantees given pursuant
to section 12(a) (2) (C) of the Act. These
records shall be retained for a period of one
(1) year after expiration of the guarantee.
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(h) In the case of pesticides or devides
intended solely for export to any foreign country,
copies of the specifications or directions of the
foreign purchaser for the production of the pesti-
cides or devices. These records shall be retained
for a period of two (2) years after expiration of
the contract.
(i) Records on the method of disposal
(burial, incineration, etc.) date or dates of
disposal, location of the disposal sites, and
the types and amounts of pesticides disposed of
by the producer or his contractor. With regard
to the disposal of containers accumulated during
production, the Agency will consider satisfactory
a statement, attested to by a responsible firm
official, describing in general terms the method
and location of disposal, e.g., all containers
are taken periodically to a certain site. Records
of deviations from normal practice must be main-
tained. In addition any records on the disposal
of pesticides and/or containers specified pur-
suant to section 19 of the Act and any regulations
promulgated thereto shall also be maintained. The
above requirements apply to those products bearing
label instructions for disposal and to any other
products specified under any regulations promulgated
pursuant to section 19. These records shall be
retained for twenty (20) years or may be forwarded
after three (3) years to the Environmental Protec-
tion Agency Regional Administrator for maintenance.
(j) Records of any tests conducted on human
beings whether performed by the producer himself
or authorized and/or paid for by the producer.
Such records shal"! include: the names and addresses
of subjects tested, dates of tests, types of tests,
written consent of subjects to test and all informa-
tion and instructions given to the subjects regard-
ing the nature and purpose of the tests and of any
physical and mental health consequences which were
reasonably foreseen therefrom, and any adverse
effects of the tests on the subjects, including
any such effects coming to the attention of the
producer after completion of the tests. These
records shall be retained for twenty (20) years
or may be forwarded after three (3) years to the
Environmental Protection Agency Regional Administra-
tor for maintenance.
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(k) Records of any factual information coming
to the attention of the producer regarding any un-
reasonable adverse effects on the environment in-
cluding water, air, land, and all plants and man
and other animals living therein by any pesticide
produced by him. These records shall be retained
as long as the registration is valid and the pro-
ducer (including its successors or assigns) is in
business or for a period of two (2) years after
such information is submitted to the Administrator
pursuant to section 6(a) (2) of the Act.
(1) Records containing research data relating
to registered pesticides. These records shall be
retained as long as the registration is valid and
the producer is in business."
B. Evaluation of Requirements
Each of the 12 records categories was reviewed subjectively in order to
determine those categories v/hich might pose significant, incremental
problems to industry. It is recognized that many of the types of
records required by Section 8 are, or should be, maintained by pesti-
cide firms as standard business practice. These records should not be con-
sidered as incremental records required by the Act since they should
be kept as a normal part of the business of the firm.
The review of the specified records categories resulted in the following
conclusions:
1. Records on product names, EPA registration numbers, EPA
experimental permit numbers, brand names and quantities
produced and shipped, files on receipt and shipment of
pesticides as evidenced by invoices etc., inventory
records, advertising, guarantees, export specifications,
tests on humans and research data records pose no special
problems to the industry.
2. Some additional records effort may be required in report-
ing to EPA factual information on unreasonable adverse
effects. Although most companies will keep records of
such incidents, the degree of documentation, the formality
of the submission of written reports to EPA plus resulting
follow-up discussions will, in most instances, require
additional effort and costs to the industry.
3. The principal impact on firms, in terms of books and records,
will result in two areas - the need for maintaining records
on batch numbers and shipment by batches and the require-
ments for the maintenance of disposal records.
a. The batch number problem - The purpose of batch
number records, as stated in the Federal
Register (39 FR 33513) is as follows: "Most
of the required records (those pertaining to
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production, shipment, inventory, batch identi-
fication and quantity) will enable the Agency
to identify, track and isolate violative batches
or shipments of pesticides. In this way the
effectiveness of EPA stop sale, use, or removal
orders and seizures pursuant to section 13 of
the Act will be greatly enhanced, while the
producer and the Agency will be spared actions
against non-violative shipments." Several pos-
sible problem areas arise. It is understood
that neither the Act nor the Rules and Regula-
tions require the recording of batch numbers
on individual containers. However, in order
to identify the disposition of product by batch
number, it will be necessary to identify batch
numbers, dates, consignees and destinations on
all invoices, shipping manifests or other simi-
lar documents. The problem becomes increasingly
complex where pesticides are shipped by the
manufacturer or formulator to an intermediate
warehouse, reshipped to a distributor and/or
dealer and finally sold to the final user.
b. Disposal records - a specific incremental re-
quirement of the Act requires complete records
on the disposal of pesticides by the producer
or his contractor. Disposal records must show
method of disposal, dates, location of disposal
sites, and the types and amounts of pesticides
disposed of. Records on disposal of used con-
tainers, accumulated during production, are
more general and need only describe in general
terms the usual practice in container disposal
together with records of deviation from normal
practice.
Although the maintenance of required books and records will present prob-
lems to industry, a greater problem will occur in those instances where
it is necessary to search these records to retrieve data for tracing
pesticides, by product and batch number when situations requiring such
information arise. Shipments, reshipments, inventories and retail
sales records must be maintained in a system which will permit such
identification. Larger firms may be able to computerize record systems
which will permit such search by computer programs. The situation will
be more difficult for smaller firms which depend primarily on manual
record systems.
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C. Economic Impact
As of July, 1975, the Enforcement Division of EPA, reported that there were
3,398 firms which would be required to maintain books and records as required
by Section 8 and which would have to make these records available for EPA
inspection on demand.
It is obvious that the complexity and the cost of maintaining required
records will vary substantially from firm to firm depending on the size
of firm, the number of establishments maintained, the number, type and
volume of products sold, types and numbers of customers served and distri-
bution systems employed.
No single cost can be assigned to this function, by product or by firm, and
contacts with industry produced widely-varying estimates of incremental costs
associated with record maintenance.
•
In order to develop an estimate of the cost of establishing and maintaining
in usable form records which will permit the tracing of receipts and ship-
ments by batch number and which will provide an accurate record of all dis-
posal operations, a series of assumptions were made, as follows:
1. Distribution of firms by size - This distribution was made on the
basis of Census data plus membership in major trade associations
as follows:
Category Est. no. of firms
Large, basic manufacturers/formulators 50
Large formulators 500
Medium sized formulators 1,000
Small formulators 1,848
Total 3,398
2. Man/days time for records maintenance was estimated as follows:
Category Man/days
Large, basic manufacturers/formulators 130
Large formulators 65
Medium formulators 20
Small formulators 10
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3. Salary, records personnel plus overhead was estimated as follows:
Category
Large, basic manufacturer/
formula tor
Large formulator
Medium formulator
Small formulator
Annual Daily
Salary Salary
$10,000 $38.46
Overhead Total
(100 %)
9,000
8,000
8,000
34.62
30.80
30.80
$38.46
34.62
30.80
30.80
4. Total costs were calculated as follows:
Category
Large, basic mfg./
formulator
Large formulator
Medium formulator
Small formulator
Total
Man/days Cost/ Cost/
firm day firm
130 $76.92 $10,000
65 69.24 4,500
20 61.60 1,232
10 61.60 616
No.
f i mis
50
500
1,000
1,848
$76.92
69.24
61.60
61.60
Total
Cost
$ 500,000
2,250,000
1,232,000
1,138,368
3,398 $5,120,368
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VI. Economic Impact - Section 9, Inspection of Establishments
A. Requirements
Section 9 of the 1972 Federal Insecticide Fungicide and Rodenticide Act as
amended provides that, "for purposes of enforcing the provisions of this
Act, officers or employees duly designated by the Administrator are
authorized to enter at reasonable times, any establishment or other place
where pesticides or devices are held for distribution or sale for the purpose
of inspecting and obtaining samples of any pesticides or devices, packaged,
labeled, and released for shipment, and samples of any containers or labeling
for such pesticides or devices."
B. Procedures
The Act specifies the following procedures,
"Before undertaking such inspection, the officers or employees
must present to the owner, operator, or agent in charge of the estab-
lishment or other place where pesticides or devices are held for dis-
tribution or sale, appropriate credentials and a written statement as
to the reason for the inspection, including a statement as to whether
a violation of the law is suspected. If no violation is suspected, an
alternate and sufficient reason shall be given in writing. Each such
inspection shall be commenced and completed with reasonable promptness.
If the officer or employee obtains any samples, prior to leaving the
premises, he shall give to the owner, operator, or agent in charge a
receipt describing the samples obtained and, if requested, a portion
of each such sample equal in volume or weight to the portion retained.
If an analysis is made of such samples, a copy of the results of such
analysis shal; be furnished promptly to the owner, operator, or agent
in charge." ]_/
C. Economic Impact
The Enforcement Division, EPA, reported that in July, 1975, there were
5,352 registered establishments subject to inspection under the requirements
of Section 9 of the Act. The Enforcement Division estimates that it will
conduct inspections of from 1,500 to 2,000 establishments per year. They
report that time required for inspection for most establishments averages
one-half a day although for large plants, one or more days may be required.
1. Types of costs to the firm
Possible costs associated with EPA inspection of establishments should in-
clude the following:
Public Law 92-516, Section 9, page 16.
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. Loss of product
. Damage to containers and repackaging required
. Costs of verifying lab tests
. Personnel escort costs.
a. Loss of product and damage to containers -- one of the functions of the
EPA plant inspector is to take samples of products. According to the
Enforcement Division, EPA, samples of products must be taken from merchandise
which has been released for sale. This usually means that sealed cartons
or other containers must be opened. If requested by the establishment being
sampled, the inspector will take duplicate samples and turn over one to the
firm for its use in verification lab tests. This means that if a case of
quart cans of pesticide is sampled, two quarts will be taken, or if a bag
is sampled, through the air vent or by a probe, two samples will be taken.
Although the EPA inspectors are equipped to reseal cartons, bags, etc.,
most firms are reluctant to ship cartons that have been opened, so the
cartons or bags are sent back to the carton sealer or bagger for replace-
ment of product and repackaging and then must be returned to the warehouse
to maintain warehouse lots intact. This process necessarily involves plant
labor and occasions some disruption of the normal flow of production.
b. Costs of verifying lab tests -- If EPA analyzes samples taken, then the
manufacturer or formulator will, in many instances have comparable analyses
made, either in his own lab or in a commercial lab, for the purpose of
verifying the EPA analyses. Although such verifying analyses are not
required by Section 9, they result from the desire by industry for such
verification, and are therefore a cost related to Section 9 procedures.
c_. Personnel escort costs — No manufacturer or formulator will allow un-
escorted, non-company personnel, official or unofficial, unaccompanied
access to the plant. Liability considerations plus other factors asso-
ciated with visitor safety and company policies require that visitors be
escorted. In addition, the company escort would be able to answer questions
and otherwise assist the inspector in his visit to the plant. As stated
earlier, EPA Enforcement Division estimates that an average inspection will
require one-half day with one or more days being required for larger
establishments.
2. Cost estimates
Estimates of costs to the industry resulting from inspection of estab-
lishments inspected per year (EPA estimates they will inspect 1,500 to
2,000 per year). This would mean that the 5,352 registered establishments
would be inspected on a three-year cycle.
Estimates of inspection costs to the firm resulting from the requirements
of 1972 FIFRA, as amended, were developed as follows.
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a. Product losses from samples taken -- Costs to industry are considered
to be nominal. Samples taken will be relatively small and although it is
possible for EPA to reimburse firms for product samples, it is doubtful
that many such claims would be submitted. It is recognized that the
samples taken have value, but because of the relatively small amounts
taken and the possibility of submitting claims for value of such products,
no cost has been assigned to product losses.
b. Costs of replacing opened cartons -- As was described in Part C, 1, a
of this report, EPA inspectors will be sampling from warehouse stocks
which will necessitate their opening cartons, cans or sacks or probing
sacks to obtain samples.
Manufacturers or formulators would be reluctant to deliver to customers
cartons, which had been opened and resealed, five gallon cans etc. on which
seals had been broken and product extracted or small bags (5 to 15 pounds)
which had been probed and product removed. In addition to sending an
obviously damaged carton or container, these containers (e.g. '5-gallon
cans or small bags) would be underweight in terms of product contents.
For larger containers, e.g. 50-pound bags or a 30-gallon drum, the
removal of a small, e.g. 1/2-lb. sample would not be sufficiently serious
to require repackaging. Common packaging units are illustrated by the
following products.
Product Package Unit
AAtrex 80 VI 10 x 5 Ib. or 25 Ib.
AAtrex 4 L 6 x 1 gal, or 5 gal or bulk
Amiben 10 G 50 Ib
Ami ben 2 LC 5 gal
Bladex 80 W 5 x 10 Ib
Bladex 4 WDS 4 x 1 gal or 5 gal
Cygon 2.67 30 gal
Diazinon AG 500 6x1 gal or 5 gal
Furadan 10 G 30 Ib.
Furadan 4 F 4 x 1 gal
Lasso II 50 Ib
Lasso 4 EC 5 gal
Lorox 50 WP 12 x 4 Ib
Milogard 10 x 5 Ib.
Paraquat 4 x 1 gal
Sevin 80 4 x 10 Ib
Tenoran 50 10 x 6 Ib
Toxaphene 2 x 1 gal
Treflan 4 EC 12 x 1 qt or 5 gal
*
Other examples could be cited, but these illustrate the common package
units for agricultural pesticides as follows.
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Liquid Dry
12 x 1 qt 12 x 4 Ib
4 - 6 x 1 gal 10 x 5 Ib
5 gal 25 - 30 Ib
30 gal 50 Ib
In general, consumer pesticides would be in smaller containers -- less than
one gallon, less than 5 pounds, or aerosol cans in cartons of 10, 12, 24, 48
or 96 units.
There are in excess of 30,000 pesticides registered with EPA. Data are
not available on the number of pesticides for which samples would be
taken during the course of inspection of establishments. The annual cost
estimate for replacing broken cartons or cans or bags from which samples
were taken, is based on the following assumptions.
a. One third of the plants sampled per year.
b. 10,000 products subject to sampling each year with many products,
packaged in different sizes and types of containers.
c. 10,000 actual samples taken each year from containers which
would have to be replaced.
d. Average cost per container (carton, bag, box, can etc.) = $1.00.—
e. Time lost in removing opened containers, replacing contents in
new containers and replacing containers in warehouses — one-half
hour per container.
f. Labor co^t per container replaced = one-half hour @ $7.70 per
hour ($8,000 salary + 100% OH) = $3.85.
On this basis, the cost on an annual basis for replacing samples and
opened containers could be 10,000 samples x $4.85 = $48,500.
c. Costs of verifying lab tests -- as was indicated under b, if samples
are taken for analysis, a duplicate sample or a portion of each such sample
shall be given to the firm, upon their request. This sample would then be
analyzed by the firm to verify the analysis done by EPA. This verifying
analysis, by the firm, is not required by the Act and if done, is done by
choice of the firm. It is recognized that the running of such analyses
results in a cost to the firm, but since it is not required by the Act, this
cost is not included. The cost of such verifying tests is estimated at
$25 to $50 per sample or for 10,000 samples, $250,000 to $500,000 per year.
- Calculated on the basis of-a weighted average of distribution of types
and sizes of containers used by pesticide manufacturers and formulators
and container costs as of August, 1975. Actual weighted average was
$1.07.
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d. Personnel escort costs -- EPA, Enforcement Division estimates that the
average inspection requires one-half day and that inspection of larger
plants requires one day or rtore. There was, in July 1975, a total of 5,352
registered establishments subject to inspection. EPA estimates that they
will inspect approximately 1,800 plants per year. If it is assumed that
10 percent of these plants are in the "large" category and require a full
day for inspection then the man-days per year required for plant inspection
would be as follows:
180 large plants, 1 day each = 180 man/days
1,620 other plants, 1/2 day each = 810 man/days
1,800 Total plants 990 man/days
Based on the assumption that the plants would furnish an escort to accompany
the EPA inspector, this would then require 990 man/days of escort time.
Since the escort must be a responsible employee, but not necessarily a
managerial employee, a salary rate of $18,000 per year or $69 per day plus
100 percent overhead equals $138 per .day represents the company cost. At
this rate, 990 man days would result in a total annual cost of $136,620.
e. Total annual industry costs associated with plant inspections equals
the sum of
(1) Container replacement = $ 48,500
(2) Escort costs 136,620
$185,120
This cost does not include allowance for products taken as samples or for
verifying lab tests made by the company.
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VII. Economic Impact - Section 12-G, Use Inconsistent with Labeling
A. Requirements
Section 12-G of the Federal Insecticide, Fungicide and Rodenticide Act of
1972, as amended states: "It shall be unlawful for any person to use any
registered pesticide in a manner inconsistent with its labeling."
This requirement has been interpreted by EPA to prohibit the application
of pesticides at dosages greater than label recommendations and to permit
application at doses lower than the label application rate for agricultural
uses only under two situations:
1. Where such use is part of an integrated pest management program
and such use is:
a. recommended in writing to the licensor agency by, and is
supervised by and/or carried out by a State licensed pest
management consultant, or
b. recommended and authorized in writing by an official State
agency, or
2. Where a lesser dose is recommended in writing or in printed
material by Cooperative State Extension Personnel, State
Experimental Station personnel or other authorized State agency,
personnel as being efficacious under the particular environ-
mental circumstances.
On the basis of this memorandum, Pesticide Enforcement Policy Statement
No. 1 40FR 19529, summarized the requirements for less-than-label application
as follows:
"The Agency has determined that an application or use of a registered
pesticide at a lower dosage rate than that recommended on the accepted
label will be permitted if such application or use
(a) is recommended in writing by a knowledgeable expert
(b) is efficacious against the target pest and has only beneficial
effects to man and the environment
(c) is performed in accordance with all other label instructions
and precautions, and
(d) is not repeated at the low dosage rate so frequently as to
result in a total pesticide dosage higher than that specified
on the approved label."
The reduced rate application of a rodenticide, termite control product or
antinricrobia-l agent such as a disinfectant, sanitizer, or fungicide under
any circumstance is prohibited.
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B. Recommendation of Knowledgeable Expert
Must be a recognized expert in pest control practices. Recognized authorities
are often employed by such organizations as State Cooperative Extension
Services, State Agricultural Experiment Station, Federal or State depart-
ments or agencies, State and Federal Public Health Services. Independent
pest management specialists and pest management consultants are also con-
sidered to be competent to make less-than-label-dose recommendations.
Recommendations must be in writing and may be made in a general statement
or published document through current scientific journals, textbooks, manuals,
technical bulletins or by specific written instructions from a qualified
person to the individual.
Responsibility for the safe and efficacious use of the pesticide and for
full compliance with the terms of Pesticide Enforcement Policy Statement
No. 1 may rest with either the user or the recommending expert,- or both.
C. State Reaction to Recommending Less-Than-Label Rates
Contacts were made with State Extension Service Directors, State Pesticide
Coordinators, Extension Agronomists and Entomologists, by letter and by
telephone to determine their attitudes toward recommending less-than-label
rates for pesticides. Twenty-seven states were willing to comment on this
problem. Half (-14) reported that they would not recommend less-than-label
rates. A major concern was related to their liability for such recommenda-
tions (see B above). Half (13) indicated that although they would be willing
to recommend less-than-label rates, they would do so only in those cases
where they had sufficient data (some mentioned 3 years) to justify the
rate and then only in very selective uses.
The general attitude of private pest control firms is that, unless they
have adequate data from State extension or experiment station personnel,
they will not recommend less-than-label rates.
D. Types of Economic Impacts of Less-Than-Label
Rate Application Regulations
i
The requirement that all pesticides must be applied at label rates, unless
a written less-than-label rate recommendation is obtained, will have its
primary impact on agricultural users of pesticides.
If the farmer is required to use full label rates under circumstances where
less-than-label rates would be indicated, one or more of the following
adverse impacts could result:
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1. Pesticide would be wasted in that quantities above that required
to obtain effective control would be used. This would represent
a direct increased cost to the farmer.
2. Crop damage could result (phytotoxicity) to growing crops, e.g.
root and/or foilage damage from herbicides, under certain cir-
cumstances where soil types or climatic conditions dictate
lower rates.
3. Normal crop rotations could be disrupted as damage could result
to crops planted during the same season, e.g. corn followed by
winter wheat.
4. Injury could result to crops planted on the same ground the
following year (pesticide residues).
In some situations, it may be possible for the farmer to shift to a dif-
ferent type of pesticide which may give adequate control at label rates or
which may have less toxic residual effects. However, in general, these
substitute pesticides will be more costly or less effective or both.
Otherwise they would be in common use at the present time.
The economic costs resulting from problems in using full-label rates
will arise from two sources:
1. Increased cost of pesticides where label recommendations result
in use of greater amounts than normally would be applied.
2. Possible damage to existing or following crops. '
In addition to the economic impacts, there would be an environmental impact
which would result from the introduction into the environment of greater
amounts of pesticides than would have been required if less-than-label rates
were used.
E. Quantitative Economic Impacts of Less-Than-Label Rate Applications
The determination of the precise economic impact resulting from the enforce-
ment of Section 12-G is not possible. Adequate information is not available
on the existing acreage of specific crops treated with less-than-label recom-
mended rates where control is acceptable at reduced rates. Adequate data are
not available on the yield losses which result from using the recommended
rate where crop injury could result since losses will vary from year-to-year
as affected by climatic conditions and other production variables. Finally,
it is impossible to predict with known reliability, the number and types of
situations where farmers will be willing and able to get written recommenda-
tions for less-than-label rates from "knowledgeable experts."
75
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However, certain information is available which can be used to provide
illustrations of situations where economic impacts would result.
1. Half of the states contacted in this study indicated that they
would be unwilling to recommend less-than-label rates. Included
in this group were five major corn producing states and four
major wheat and sorghum producing states.
2. It has been observed that under certain soil or moisture conditions
application of certain herbicides at label rates will result in
damage to growing crops and/or residual damage to crops which follow-
on the same ground.
3. Problems resulting from greater-than-r*equired pesticide appli-
cations affect major field crops, including corn, soybeans,
cotton, grain sorghum, wheat and other small grains, which con-
stitute major sources of crop revenue for sales into both,
domestic and export markets.
4. Overuse of pesticides, in terms of greater-than-required appli-
cations for conditions encountered results in greater-than-
required pesticide expenditures by the farmer.
Examples of situations where less-than-label rates are used were cited
by university agricultural experiment stations contacted during this study.
Table 18 illustrates some of the situations reported by agricultural ex-
periment stations.
As opposed to the possibility of losses which may occur if label recommenda-
tions are required in situations where less-than-label application rates
would be adequate, the EPA guidelines and regulations specifically provide
that less-than-laoel rates may be applied where written recommendations
from "knowledgeable experts" are possessed by the user. This require-
ment is subject to interpretation as is the enforcement of the requirement.
Although there may be situations where farmers, other users or applicators
fail to obtain recommendations for less-than-label applications, and where
amounts of pesticides applied are greater than necessary, there is no way of
accurately estimating the number of types of such situations which may
exist. It is expected that Section 12-G will result in economic costsi
from excess use of pesticides and in possible crop damage to existing or
follow-on crops. Half of the states responding to inquiries concerning
12-G (14 out of 27) indicated that they would not make less-than-label
recommendations for pesticides. The excess pesticide costs shown in Table 18,
represented by illustrations from 10 states, total in excess of $19,500,000.
Of this amount, $17,400,000 was represented by crops in states which in-
dicated that they would not make less-than-label recommendations. If the
assumption is made that excess pesticide useage as illustrated in Table 18
76
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Table 18. Illustrations of situations where less-than-label rates of applications of pesticides
are recommended If
Crop
and
State
Recommended
reduction below
label rate
Pesticide Value of
Type of —iaoei rate Acres saved by pesticide pesticide
pesticide Amount Percent Reason for lower recommended rate affected lower rate price saved
Corn
Illinois Herbicide 1-1.5
Iowa
Herbicide 1.5
Indiana Herbicide 1.0
Minnesota Herbicide 1.0
Ohio
Herbicide 1.0
33-50 Effective weed control on soils
in S. Illinois at lower rate —
avoid residual carryover on win-
ter wheat or soybeans.
lib.)
1,300,000 1,300,000 $2.95/lb. $3,835,000
40
33
33
33
Effective control at lower rate, 300,000 450,000
carryover Injury to beans on high
pH soil.
Effective weed control at lower
rate, reduces residual damage.
Effective at lower rates, avoid
residual damage to wheat and
beans.
Effective in given situations at
lower rate.
1.200,000 1.200,000
1,000,000 1.000,000
2.95/lb. 1,327,500
2.95/lb. 3.540,000
2.95/1b. 2.950,000
800.000 800.000 2.95/lb. 2.360,000
Soybeans
Illinois Herbicide 0.5
Louisiana Insecticide 0.75
• 0.25
25 Higher rate results in Injury to 270,000 135,000
crop.
Adequate control with lower rate. 250,000 187,500
J .... 250,000 62,500
3.70/lb. 499,500
1.12/lb. 210,000
S.44/lb. 340,000
Grain Sorghum
Kansas
Nebraska
Texas
Cotton
Arkansas
Tobacco
N. Carolina
'4 .
Herbicide 1.0 33
Herbicide 0.6 20
Insecticide 0.5
Herbicide 0.25 20
Insecticide 1.0 33
Effective at lower rate, heavier
applications can Injure crop under
adverse conditions.
Effective at lower rate.
Gives economic control at lower
rate.
Cotton will not tolerate label
recommendations on low organic
soil.
Lower rate gives effective control.
600.000
750.000
250.000
200.000
128,000
600,000 3.20/1 b.
450.000 3.20/lb.
125,000 1.68/lb.
50,000 5.85/1 b.
128.000 5.03/lb.
1,920,000
1, -.40,000
210,000
292.500
644.000
These examples represent only a partial sampling of a wider number of situations which exist illustrated from examples
frooi State Agricultural Experiment Stations.
77
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is representative of situations which occur in other states, that half
of the states would not make less-than-label recommendations and that
losses would be in proportion to total crop acreage, then direct cash
costs due only to the value of excess pesticides used would be approxi-
mately $19,200,000. This cost was calculated as follows:
1. Costs illustrated in Table 18 $19,568,000
2. Crop acreage in states shown divided
by U.S. total crop acreage 50.9%
3. Estimated cost if no state makes "less-
than-label" recommendations $38,400,000
4. Estimated cbst if 50 percent of states
make "less-than-label" recommendations $19,200,000
It must be recognized that this cost estimate represents only the value
of excess pesticides used and does not include any estimate of loss or
damage to growing crops or to follow-on crops.
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VIII. Economic Impact of Section 19 - Pesticides and Pesticide Container
Disposal and Storage
A. Introduction
The Federal Insecticide Fungicide, and Rodenticide Act of 1947, did not
regulate disposal or storage of pesticides or pesticide containers. In the
1972 Federal Insecticide, Fungicide and Rodenticide Act as amended, the
administrator is specifically directed to establish procedures and regula-
tions for the disposal or storage of packages and containers of pesticides
and for disposal or storage of excess amounts of such pesticides, and
accept at convenient locations for safe disposal a pesticide for which the
registration has been canceled under Section 6(c) if required by the owner
of the pesticide. The agency will accept the pesticide from Section 6(c)
after the owner of the pesticide has made reasonable effort to return the
material either to its manufacturer, distributor or to another agent capable
of using the material.
B. Procedures not Recommended for Disposing or Storage
The Agency has determined that some methods of pesticide disposal and storage
are so likely to cause unreasonable adverse effects on the health or the
environment that the best form of regulation is to prohibit such acts.
Prohibited disposal methods
No person shall dispose of or store any pesticide or dispose of or store
any pesticide container or container residue by:
1. Open dumping
No pesticide, pesticide-related waste, pesticide container, or
residue from a pesticide container shall be disposed of in a
manner which does not protect the environment and is exposed to
the elements, vectors and scavengers.
2. Open burning
No pesticide, pesticide container or pesticide container residue
shall be disposed of by open burning; except, the open burning
by the user of small quantities (quantities emptied in a single
day) of combustible containers formerly containing organic or
metallo-organic pesticides, except organic mercury, lead,
cadmium, or arsenic compounds, is acceptable when allowed by
State and local regulations. The burning must take place in
open fields away from people, water and animals and must avoid
contamination of surface and groundwater.
79
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3. Water dumping or ocean dumping
No pesticide, pesticide-related waste, pesticide container shall
be stored or disposed of in a manner or to cause or allow con-
tamination with water except in conformance with regulations
developed pursuant to the National Marine Protection, Research
and Sanctuaries Act of 1972 and the Federal Water Pollution
Control Act as amended.
4. Contamination of food and feed supplies
No pesticide or pesticide-related waste that is classified as
highly toxic or moderately toxic and so labeled shall be dis-
posed of or stored in proximity to and in such manner as to
cause direct exposure which could cause contamination of food
or feed, or food or feed package materials.
5. Well injection
No pesticide, pesticide-related waste, pesticide container, or
residue from a pesticide container shall be disposed of by well
injection without the proper approval from the appropriate
State agency. Also it must be demonstrated that other methods
of disposal were investigated and found unsatisfactory in terms
of environmental considerations.
6. So as to violate any Federal and State pollution Control
Standards.
7. So as to violate any applicable provision of the Act.
C. Recommended Procedures for Disposal of Pesticides
~u
Procedures for disposing of
1. Organic pesticides except those containers - organic
mercury, lead, cadmium and arsenic
Dispose as directed in 165.8(a) 1-6. I/
2. Metal!o-organic pesticides except those containing organic
mercury, lead, cadmium or arsenics
Dispose as described in 165.8(b) 1-6. I/
3. Organic mercury, lead, cadmium, arsenic and all inorganic
pesticides.
Dispose as described in 165.8(c) 1-3. If
II 39 FR 15239, 15240.
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D. Recommended Procedures for the Disposal of Containers and Residues
1. Group I Containers
.•
Combustible containers formerly containing organic or metallo-
organic pesticides except organic mercury, lead, cadmium or
arsenic can be incinerated or buried in specific designed land
fills as noted in 165.8(a) I/. Exceptions are small quantities
of containers used in one day which can be burned in open fields
with due caution by the user where permitted by the State and
local regulations, or buried singly by the users in open fields.
2. Group II Containers
Non-combustible containers that contain organic or metallo-organic
pesticides except organic mercury, lead, cadmium or arsenic should
be triple-rinsed and contents added to the spray tank. Containers
then can be disposed of by returning to manufacturer, recondition
for reuse, recycle as scrap metal or disposed of in a sanitary
landfill after crushing and puncturing to conform to regulations.
Unrinsed containers must be disposed of in a specially designated
land fill or incinerated in a pesticide incinerator.
3. Group III Containers
Any container formerly containing organic mercury, lead, cadmium
or arsenic or inorganic pesticides after triple-rinsing and
puncturing may be disposed in a sanitary landfill. If not
rinsed containers are to be encapsulated and buried in specially
designated landfill.
4. Residucl Disposal
Residues and rinse liquids should be added to spray tank and
used in field. If not, destroy as specified in 165.8 I/.
E. Recommended Procedures and Criteria for Storage of
Pesticides and Pesticide Containers
1. General
a. Pesticides and excess pesticides and their containers should
be stored only in places where adequate measures are taken
to assure personal safety, accident prevention and pre-
vention of potential environmental damages.
I/ 39 FR 15239-15240.
81
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These precautions should occur where pesticides with signal
word Danger, Poison or Warning, or the skull and crossbones
symbol on the label are stored. These procedures are not
necessary at facilities where most pesticides used in the
home and garden, or pesticides classed as slightly toxic
(Caution on label) are stored.
b. Pesticides to be used in a single application, even though
highly toxic or moderately toxic, can be temporarily stored
by user at isolated sites where flooding is unlikely,.where
provisions are made to present unauthorized entry, and where
isolation of buildings is sufficient to prevent contamination
by runoff, percolation or wind-blown particles or vapors.
2. Storage Sites
Sites should be selected where flooding is unlikely and where
seepage will not contaminate water. If runoff should occur,
monitoring should be done and the effluent treated as a pesticide
under 165.8 I/.
3. Storage Facilities
Pesticides should be stored in dry, well ventilated, separate
room, building or covered over where fire protection is provided.
The following precautions should be taken if relevant and practical.
a. Climb-proof fence and locked door and gate to prevent un-
authorized entry around facility.
b. Signs placed on fence, building and in room to warn of the
hazardous nature of contents.
c. All movable equipment used to handle pesticides should be
labeled "contaminated with pesticides" and should not be
removed from site unless decontaminated.
d. Provisions for decontaminating persons and equipment, should
be provided and provisions for collecting waste water should
be provided and treated as excess pesticide.
4. Operational Procedures
Products should be stored with label visible. All containers
should be inspected for possible leakage and repaired. Pesticides
should be stored according to type, in rooms off the ground and
Inventoried. Excess pesticides and containers should be segregated
according to method of disposal. Storage area should be constantly
Inspected for leakage and all safety and fire control measures
followed.
I/ 39 FR 15240.
J 82
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F. Disposal of Pesticide-related Wastes
In general, all pesticide-related wastes shall be disposed as excess
pesticides in compliance with 165.7 and 165.8 _!/. These wastes should
not be disposed of in an industrial effluent stream.
G. Enforcement of Recommended Procedures for Disposal and Storage
Under 165.2 authorization and scope (c) and (d), the following are direct
quotes: 2/
(c) "The recommended procedures for the disposal of pesticides
and pesticide containers apply to all pesticides, pesticide-
related wastes (and their containers) including those which
are or may, in the future be registered for general use or
restricted use, or covered under an experimental use permit,
except those single containers-discussed in paragraph (e) of
this section. These disposal procedures are mandatory only
for the Agency in carrying out its pesticide and container
disposal operations."
(d) "The recommended procedures and criteria for the storage of
pesticides and pesticide containers apply to all pesticides and
excess pesticides and to used empty containers and containers
which contain pesticides. These procedures and criteria apply
to sites and facilities where pesticides that are classed as
highly toxic or moderately toxic, and bear the signal words
DANGER, POISON, or WARNING, or the skull and crossbones symbol,
on the label are stored. Pesticides covered by an experimental
use permit should also be stored in accordance with these pro-
cedures. These storage procedures are mandatory only for the
Agency in carrying out its pesticido and container storage
operations. Temporary storage by the user of the quantity of
pesticide needed for a single application may be undertaken in
isolated areas in accordance with the procedures and criteria
given in 165.10(a)."
From the above it is assumed that at the present time, disposal of pesticides
and pesticide containers except as described in open burning for single
containers or the amount used per day (165.7b), the above is mandatory only
for the Agency in carrying out its pesticide and container disposal opera-
tions. Temporary storage by the user is excluded in 165.10
H. Economic Impact - Section 19
The economic impacts of Section 19 will affect basic manufacturers, formula-
tors, dealers and distributors, custom applicators and farmers through
increased costs associated with prescribed storage and disposal methods for
I/ 39 FR 15240.
39 FR 15238.
83
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pesticides, pesticide wastes and pesticide containers. Impacts of Section
19, on consumers and industrial users of pesticides are thought to be
small in terms of disposal requirements as proposed at the present time.
Storage requirements, as specified, are judged to be consistent with
established, sound storage practices and should not result in appreciable
additional costs.
The major costs will be those associated with disposal of pesticides,
pesticide wastes and pesticide containers.
1. Impacts on Farmers
An analysis of methods of pesticide container disposal methods used by
farmers was made by Fox and Delvo in 1971 I/. The summary of disposal
methods- used is shown in Table 19. As shown from this table, nearly
half of all containers were burned, 27 percent (primarily cans) were hauled
to a dump with most apparently dumped on farms where used (private dumps).
Eleven percent were retained, 6 percent buried, 3 percent returned to the
dealer and the balance (3.6 percent) disposed of by other methods.
1972 FIFRA as amended permits open field burning of most combustible
pesticide containers (except heavy metal products) in small quantities
(approximately one-day's use). Open burning will continue to represent
the major disposal used by farmers. However, more herbicides are being
produced as emulsions or flowable pesticides in metal containers. In
addition, since many fungicides contain heavy metals, these containers can
no longer be burned in open fields. As a result, there will be less
burning than was indicated by the 1971 study.
It is difficult to estimate the costs to the farmer for pesticide container
operations. However, representative costs have been calculated based on
the following assumptions per farm unit.
a. 100 acres each of corn, soybeans, cotton or other crops on which
pesticides are used.
b. Containers to be disposed include:
. 40 5-gallon cans
. 20 1-gallon cans
. balance paper bags
c. Disposal operations
. burns paper bags (except heavy metals bags) in field
. triple rinses, punctures and crushes cans
. hauls cans to sanitary land fill
I/ Fox, A. S. and A. W. Delvo, "Pesticide Containers Associated with Crop
Production," Proceedings of the National Conference on Pesticide Con-
tainers, New Orleans, Nov. 28, 1972, published by the Federal Working
Group on Pest Management, Washington, D.C.
84
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Table 19. Method of disposal of containers used by farmers
(Percentage distribution of farmer responses to pesticide container questions
on container disposal, and collection preferences, United States, 1971.)
Item
Insecticides
Herbicides
Fungicides
All
Pesticides
Method of Disposal :
Returned to dealer
Burned
Buried
Private dump
Commercial dump
Left in field
Left where sprayer filled
Retained
Other
TOTAL
Would use collection points:
Yes
No
TOTAL
Number of responses
1.9
61.0
3.7
16.7
7.1
1.3
0.6
6.9
0.8
100.0
52.3
47.7
100.0
666
3.1 4.1
45.0
6.6
18.4
9.6
0,7
1.5
13.3
1.8
100.0
51.3
48.7
71.4
7.1
2.0
8.2
--
—
4.1
3.1
100.0
46.9
53.1
100.0 100.0
1,373 98
3.1
49.2
5.8
18.9
8.4
0.9
1.1
11.0
1.6
100.0
51.6
48.4
100.0
2,357
Source: Fox and Delvo (1972)
85
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d. 50 percent of farmers using pesticides, 750,000 will have dis-
posal operations, other 50 percent (750,000) will have pesticides
applied by custom applicators who will dispose of containers.
No cost allowance has been made for machine costs (crushing cans with
tractor etc.) or for hauling cans to dump. Four hours per year have been
allowed for the farmer's time for disposal. Farm labor has been valued at
$3.50 per hour. On this basis, the farmers disposal cost would be, 4 hours
times $3.50/hr. times 750,000 farmers equals $10,500,000.
2. Impacts on Custom Applicators
Since no specific data are available on disposal costs of custom applicators,
it has. been necessary to estimate these costs through hypothesizing "rep-
resentative" situations as follows.
a. Aerial applicators (heavy users of restricted pesticides)
. 4,331 operating units in the U.S., operating 150 days per
year
. large, 30-55 gal. drums returned to dealer - no charge
. one hour per day to triple rinse, puncture and crush metal
containers; store and dispose of heavy metals containers.
Assumes no additional time for burning or hauling containers
to dump - normal, existing procedures.
. cost = 4,331 applicators x 150 hours per year x $5.00 per
hour = $3,248,250 ($3,250,000).
b. Ground custom applicators
. 80,000 commercial custom applicators
. 40,000 apply 80 days/year - 1/2 hour per day for triple
rinse, puncture and crush metal containers and hold and dis-
pose of heavy metals containers (bags and cans) = 40 hours
per year x 40,000 x $5.00 per hour = $8,000,000
. 40,000 apply 40 days per year, 1/2 hour per day for disposal
operations = 20 hours per year x 40,000 x $5.00 per hour =
$4,000,000.
c. Total custom applicator disposal costs
aerial applicators
ground applicators
3. Impacts on Dealers and Distributors
$ 3,250,000
12.000,000
$15,250,000
Destruction of excess pesticides, broken containers etc., estimated 20,000
dealers, $10 per dealer per year = $200,000.
86
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4. Impacts on Formulators
Destruction of sweepings, broken containers and other pesticide wastes,
5,000 locations at.$100 per location per year = $500,000.
5. Impacts on Basic Manufacturers
Destruction of sweepings, broken containers, residues from re-use containers,
excess pesticides and other related wastes. Based on estimates from manu-
facturers, $25,000 per firm x 50 firms =$1,250,000. I/
6. Summary, Economic Impacts, Section 19
Segment Estimated Disposal Costs
Farmers $10,500,000
Custom applicators 15,250,000
Dealers and distributors 200,000
Formulators 500,000
Basic manufacturer 1,250,000
TOTAL $27,700,000
— Estimated on the basis of incineration of pesticide wastes at 10 cents
per pound incineration cost, plus 2.5 cents per pound transportation,
labor and administrative cost. Estimated quantity destroyed =
200,000 pounds per firm per year.
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IX. Economic Impact of 24 c - Authority ot States
Introduction
Prior to the passage of FIFRA as amended, the States could issue a State
Registration or permit for the use of a pesticide intrastate. This registra-
tion was entirely separate from the Federal labeling procedure. These state
labels were for uses within the state which were deemed necessary by the
State to control a pest. Usually the State labels were for minor uses or-
minor crops within the State where there was no Federally registered product
available.
Section 5(F) states that the Administrator may, under such terms and con-
ditions as he may by regulations prescribe, authorize any State to issue
an experimental use permit for a pesticide. Such State Experimental permits
would allow applicants for State registrations to accumulate the test data
necessary to support State registration and use within the State.
In addition, under 24-C and the provisions of Section 5(F) it may be possible
for states to issue experimental permits to allow the field testing of spe-
cific pesticides under conditions which might not be as costly as if a Federal
experimental permit were required.
Section 24-C will make possible the registration of pesticides for intra-
state use to meet special local needs. This provision will be especially
useful in providing a means for registering pesticides for minor crop use
and will help alleviate the impacts of Section 3 in terms of registration
of pesticides for minor uses.
-------
X. Summary - Direct Incremental Costs Associated with the
Implementation of Specified Sections of 1972 FIFRA as Amended
Direct costs attributable to those sections of 1972 FIFRA as amended
which are expected to have significant economic impacts, are summarized
in Table 20 . It must be emphasized that the costs shown are estimates
since the complexity of the pesticide industry, the complexity of the Act
and the manner in which it may be administered make the precise quantifi-
cation of the economic impacts impossible. However, it is believed that
the costs shown are representative of those which may occur, given the
assumptions on which they were based.
1. Registration of Pesticides - Section 3
Two costs are shown, "one-time" costs involved with the reregistrati on of
approximately 1,400 active ingredients and "reoccurring" costs representing
the costs of initial registration for 10 new active ingredients annually.
Costs are based on standard laboratory test charges plus 10 percent con-
tingency to cover costs of pesticides furnished for testing and company
administrative costs involved in registration or reregistrati on procedures.
Test costs are only for those new tests required by 1972 FIFRA as amended,
including:
a. Teratological studies
b. Oncogenicity studies
c. Chronic feeding studies
d. Reproduction studies
e. Mutagenesis studies
f. Chronic fish residue studies
All six studies are required for new AI. Only the first four are required
at present for reregistration of existing AI, but mutagenesis and chronic
fish residue studies will be required on all AI within 5 years.
No incremental costs are shown for registration or reregistrati on of form-
ulations since no additional requirements are imposed provided that the test
data for AI in the formulation are on file with EPA.
A major cost associated with 1972 FIFRA registration requirements results
from the provision for new label formats for all registered products. This
will require the development of new labels and some label inventory loss
will occur at the time that the changeover is made. The costs were estim-
ated on the basis of the cost of developing a new label format and the re-
quired plates or lithomasters, but do not include costs for the labels them-
selves. Inventory losses were estimated on the basis of minimum container
inventories at the time that new labels are required.
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Table 20. Summary, direct incremental costs associated with
the implementation of specified sections of 1972 FIFRA as amended
1972 FIFRA
Sec. Description
3. Registration of Pesticides
4. Use of Restricted Use Pesticides;
Certified Applicators
5. Experimental Use Permits
7. Registration of Establishments
8. Books and Records
9. Inspection of Establishments
12-G. Use of Registered Pesticide in a
Manner Inconsistent with its Labeling
19. Disposal and Transportation
Total Estimated Incremental Cost
Estimated
Incremental Costs
One
time
($000)
$ 68,525
45,168
—
—
—
—
—
--
$113,693
Reoccurring
($000)
$ 1 ,600
28,739
25,000
3,534
5,120
185
19,200
27,700
$111,078
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2. Applicator Certification - Section 4
Applicator certification costs were also divided into "one-time" and
"reoccurring" costs, Table 17-
The "one-time" costs include the costs of developing training programs
and educational materials, costs to applicators for participating in
training and for obtaining certification, and costs involved in develop-
ing and administering the certification program. Credits were allowed for
training and certification fees paid by applicators. Estimates were based
on certifying 1,500,000 private applicators (farmers) and 192,000 commercial
applicators.
"Reoccurring" costs included the following items:
a. Continued training of applicators (no recertification proposed)
based on participation in training programs every second year.
b. Maintaining, updating and revising applicator training programs
by the States.
c. Cost to states for monitoring and enforcement.
d. Increased costs to commercial, custom applicators for record
keeping and retention.
3. Experimental Permits - Section 5
Incremental costs for experimental permits were based on the increase in the
number of experimental permits expected by EPA as a result of the require-
ment that Federal and State research agencies must now obtain experimental
permits for field testing of pesticides. In the past, many companies field
tested pesticides through cooperative arrangements with State agricultural
experiment stations or cooperative extension services without the need for
experimental permits and the testing required to get such a permit.
The incremental costs of Section 5 were based only on the costs associated
with those candidate products which are dropped (not registered) as a result
of field testing. It was estimated that there would be approximately 250
such products per year. It was also assumed that the incremental costs
required for an experimental permit vs. non-permit field testing would be
approximately $100,000.
4. Registration of Establishments - Section 7
The principal incremental costs concerned with registration of establishments
would be the effort required for developing, maintaining and filing the re-
quired annual pesticide reports. Costs were estimated on the basis of clerical
time for each product and(managerial review time for each firm.
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5. Books and Records - Section 8
The major incremental problem will be that of establishing and main-
taining, in usable form, records which will permit the tracing of receipts
and shipments by batch number and which will provide an accurate record of
all disposal operations. Estimates were made of the clerical costs of main-
taining such records, by type and size of firm to get an aggregate incre-
mental cost to industry.
6. Inspection of Establishments - Section 9
The principal costs associated with inspections of establishments were associ-
ated with replacement of containers and product where cartons or other con-
tainers were opened and samples taken and for escort costs for company per-
sonnel to accompany inspectors during their inspection of the plant. These
costs were based on 10,000 samples taken and one-day inspection time for
large plants and one-half day for small plants.
7. Use Inconsistent with Labeling - Section 12-G
1972 FIFRA as amended makes it illegal to apply any pesticide at rates in
excess of label specifications or at less-than-label rates without the
written recommendation of a "knowledgeable expert".
Replies were received from £7 State Agricultural Experiment Stations and Ex-
tension Services regarding their willingness to make less-than-label recom-
mendations. Over half (14) indicated that, for liability reasons, they would
not be willing to make less-than-label recommendations. The others indi-
cated that while they would be willing to make such recommendations, they
would do so only under very specific conditions where such recommendations
were adequately supported by experimental data.
Illustrations were given by the States of situations where less-than-label
application rates would be applicable.
The principal costs which may be associated with Section 12-G would result
from cost of pesticide used above that required for effective control and
possible crop damage to existing or follow-on crops—especially true with
residual herbicides.
It is impossible to predict with accuracy the number and types of situations
in which farmers would be unable to obtain recommendations for less-than-
label -rate applications, and it is even more difficult to predict crop
damage which might result from application at label rates in those situations
where lesser rates would be indicated.
No estimate was made of crop damage costs. On the basis of the illustrations
provided by the States and on the basis of the reluctance of states to
make less-than-label recommendations, the cost of excess pesticide usage
could total over $19 million.
92
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8. Pesticides and Pesticide Container Disposal and Storage - Section 19
Regulations for storage and disposal of pesticides and pesticide containers
are a new requirement of 1972 FIFRA as amended. Incremental costs vs.
present disposal practices, were estimated for farmers, custom applicators,
dealers and distributors, formulators and basic manufacturers. Except for
basic manufactures, where destruction of pesticides represents a greater
problem, costs were estimated based on the man hours of labor required to
triple rinse, puncture and crush metal containers and storage and disposal
of containers of pesticides having heavy metals contents. No costs were
included for burning or for hauling containers to sanitary land fills since
it was assumed that these methods of disposal are currently in use.
93
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XI. Economic Impacts of 1972 FIFRA as Amended on Users ef Pesticides
Incremental costs associated with implementation of the additional require-
ments of 1972 FIFRA as amended will result in direct costs to manufacturers,
formulators, applicators, farmers, household users, commercial users and
government users. These costs will be borne by users either directly or
indirectly through higher prices charged for products or services (appli-
cators ).
In this analysis, the basic assumption was made that increased costs would
be passed forward to users and would be included in marketing margins
normally taken by distributors and retailers of pesticides.
A comparison of manufacturer's wholesale price with the retail price
paid by farmers for eight major pesticides in 1974 showed a margin of 156
percent between the wholesale and the retail price, Table 21. It is
assumed that the margin for household pesticides would be even larger.
To allow for differentials due to transportation and other non-pesticide
related cost factors, a spread of 1.5 has been assumed.
A summary of those direct incremental costs which may be passed on to
users of pesticides is given in Table 22. This summary does not include
costs incurred by state agencies since these would not be directly trans-
ferred to users. Costs in Table 22 are classified as "one-time" and
"reoccurring". "One-time" costs include those incremental costs of
• reregistering all active ingredients-by October 21, 1976 as required by
the Act plus the costs of applicator certification which will be borne by
fanners and commercial applicators. For the purpose of developing an
annualized cost, these "one-time" costs have been amortized over a 10-year
period at a 10 percent discount rate. Annual direct or "reoccurring"
costs are added to this amortization cost to get total annual cost. As a
result of this procedure, the annual costs shown would only apply over the
next ten years, after which period the "amortized" component of these
costs would be fully amortized.
Except for costs directly assignable to agriculture, other costs were
assumed to be borne by users in proportion to their use of pesticides
as follows:
Category Percent of Total Pesticide Use
Agriculture 59.00%
Industry 21.52
Households 16.25
Government 2.91
Unallocated 0.32
Total 100.00%
94
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Table 21. Comparison of wholesale and farmer's price
for pesticides, 1974 V
Wholesale-7 Retail-7
Name of Pesticide
Aldrin
Lead Arsenate
Malathion
Parathion
2-4-D
2-4-5-T
Toxaphene
$1.185
.275
.889
.515
.365
1.120
.291
Per Ib./AI
$ 2.020
.495
2.140
1.885
1.470
3.150
.762
Bases
4 lb/gal/$8.04
per Ib.
5 lb/gal/$10.70
4 lb/gal/$7.54
4 lb/gal/$5.88
4 lb/gal/$12.60
6 lb/gal/$4.57
Totals $4.640
Farm price as % of wholesale price = 256$
Spread (%) = 156% = 1.56 times wholesale price.
$11.922
I/
3/
Quoted prices as reported by the USDA, may not include discounts or other
special pricing arrangements at either the wholesale or retail price
level.
The Pesticide Review, 1974,
ASCS, USDA, Table 12, p. 14
Agricultural Prices, July 31, 1974,
SRS, USDA, Pr 1 (7-74), p. 29.
95
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Table 22. Summary of direct incremental costs of 1972 FIFRA as
amended, to manufacturers and formulators,
applicators and farmers
Direct Cost
Cost Item One-time Reoccurring
Manufacturers registration - new chemicals (Sec. 3) $ 1,600,500
Reregi strati on costs, active ingredients (Sec. 3) $68,525,000
Experimental permits (Sec. 5) 25,000,000
Registration of establishments (Sec. 7) 3,533,600
Manufacturers and formulators - books & records (Sec. 8) 5,120,400
Inspection of establishments (Sec. 9) 185,100
Manufacturers & formulators disposal costs (Sec. 19) 1 950 000
Applicator certification, retraining & record (Sec. 4)
keeping
Fanners 12,750,000^ 4,875,000^
Commercial applicators 10,560,00(£/ 10,864,00(F/
Farmers container disposal costs (Sec. 19) 10,500,000
Commercial applicators disposal costs (Sec. 19) 15,250,000
-' Transportation to training ($9,000,000), educational materials
($750,000), and certification ($3,000,000) fees.
Transportation to training ($1,152.000), educational materials ($576,000),
transportation to exam ($1,152,000), certification fees ($7,680,000).
-* Transportation to training ($9,000,000), educational materials
($750,000), total $9,750,000 '- 2 since update training assumed every
other year.
4/
-* Transportation to training ($1,152,000), plus educational materials
($576,000) = $1,728,000 f 2 = $864,000 since update training assumed
every other year, plus $10,000,000 annually for increased record costs.
96
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A. Agricultural User Costs
1. General Impact
Agriculture uses approximately 59 percent of the total pesticides marketed
in the United States. Use of pesticides by type of pesticide and major
crop, in 1971 is shown in Table 23. Table 23 shows clearly that corn is
the biggest single user of active ingredients with cotton a close second.
Herbicides account for 80 percent of all pesticides used on corn and 65
percent is accounted for by three products, atrazine, propachlor and 2-4-D
in that order. ]_/
With cotton, however, insecticides are most used, accounting for 85 percent
of the active ingredients. Toxaphene, methyl parathion and DDT (1971)
made up 87.5 percent of all insecticides used on cotton.!/ The banning
of DDT since that time, will of course change this distribution.
Fruits and nuts as a group are the next largest users of active ingredients
followed by soybeans, grain crops and vegetables. The use of pesticides
in livestock production is substantial and ranks high among the farm
uses of pest control chemicals.
Cotton, peanuts, fruits, nuts and vegetables used large quantities of
sulfur in different forms. The total volume of sulfur and petroleum
solvents was 335 million pounds or 40 percent of the total volume shown
in Table III-5. This table does not show dry diluents such as fine clays
but Table III-4 shows 557 million pounds used in all sectors.
'Some crops such as tobacco need special chemicals such as maleic hydrazide
for "sucker" growth control and the use of fumigants such as D-D mixture
and Tel one. The nature of the crop is such that these minor use chemicals
play an important role in the successful production of a widely used crop.
With regard to minor chemicals and minor uses, there is not enough data
available on which pesticides and formulations will become unavailable
or severely restricted through the enforcement of these new regulations
to allow an impact evaluation other than in general terms based on assump-
tions. This problem is discussed further later in this report.
The estimated annual direct economic impact to agricultural pesticide
users resulting from the incremental requirements of 1972 FIFRA as amended,
Is shown in Table 24. As illustrated in this table, costs to agriculture
result from three major sources:
-' Fanners' Use of Pesticides in 1971, ERS, USDA, Agr. Economic Report
252, p. .11
-OP- c1t., P- 14-
97
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Table 23. 1971 Pesticide use by crops in the United States (Ibs X 1,000 active Ingredients)
00
All
Pesticides Fungi-
Crop +• S & Petrol cides
Corn
Cotton
Citrus & apples
Hay (all forages)
Peanuts
Potatoes (Irish)
Rice
Sorghums
Soybeans
Sugarbeets
Tobacco
Wheat & S. fallow
Other grains
Other vegetables
Other fruits &
nuts
Other field crops
139,992
127*090
164,778
44,294
40,764
13,298
7,985
11,555
42,341
2,990
14,461
15,619
12,932
39,868
80,390
14,590
M
300
16,464
__
4,431
4,124
_
~
—
—
—
~-
-_
5,666
6,918
1,732
(Seeds & transplants , ^^
(Nursery & greenhouse J>»W-J —
livestock (all)
Other farm uses
Total
29,351
16,036
828, 090*
514
1,578
41,727
Herbicides
101,060
19,610
873
8,963
4,374
2,178
7,985
H,538
36,519
2,977
897
13,059
5,377
3,361
1,503
6,053
230
~_
1,399
227*906
Insecti-
cides
—000 Ibs
25,531
73,357
7,880
2,609
5,993
2,770
2/
3/
5,o21
, i/
4,000
1,712
7,496
8,268
6,274
2,279
W7
14,784
729
169,770
An
Other
TvDes
MJLti-
cides Fumigants
Defoli-&
Deslc-
cants
Rodenti. Repel! •
cides ents
Petrol
Sulfur Products
. - active ingredients
444
18,696
1,828
i/
I/
2/
I/
I/
I/
I/
9,420
I/
i/
10,^35
1,772
3,335
344
569
7,863
54,706
57
282
1,123
I/
2/
u
I/
I/
I/
*~.
-.
__
42
397
88
32
— .
•—
2,021
386
1,164
515
I/
I/
2/
I/
I/
I/
i/
4,%
i/
I/
9,959
1,073
3,124
309
136
21,095
-------
a. Increased costs of pesticides represented by pass through
of costs by manufacturers, formulators, distributors and
retailers.
b. Direct costs to farmers resulting from applicator training
and certification costs for both private applicators (farmers)
and commercial applicators.
c. Direct costs to farmers resulting from container disposal
costs incurred by farmers and custom (commercial) applicators.
On an annualized cost, over the next ten years, the incremental costs to
agriculture, from these three sources, resulting solely from the require-
ments of 1972 FIFRA as amended, total $105.5 million.
In addition to this cost, there is the possibility of a substantial cost
impact from Section 12-G which requires farmers to apply pesticides at
rates recommended on the label unless they have a written recommendation
from a "knowledgeable expert" for a less-than-label rate application. The
primary source of such recommendations would be state agricultural exten-
sion services or agricultural experiment stations. Out of 27 states
responding to a letter regarding such recommendations, 14 indicated that
they would not make such recommendations and the remainder would do so
only with specific qualifications. If half of the farmers are unable to
get less-than-label recommendations then the cost to farmers, from excess
pesticides used (above amounts required for effective control) could
amount to $19,200,000 per year without any allowance for damage to
growing crops or residual damage to follow-on crops.
2. Impact by Regions
Economic impacts, by agricultural region, due to incremental requirements
of 1972 FIFRA as amended are shown in Table 25. In terms of total costs,
the greatest impacts are found in the Corn Belt, Southeast, Delta, and
Pacific States. These states have large acreage of crops which are
intensive users of pesticides - corn, cotton, soybeans and fruits and
vegetables. On a cost-per-crop-acre basis, the greatest impacts were
seen in the Southeast ($1.41), Delta ($.85) and Pacific ($,'60) states
where cotton combined with fruits and vegetables result in high levels of
pesticide use. Lowest levels of impact were found in the Mountain ($.09)
and Northern Plains Regions ($.10) where small grains such as wheat
are dominant and pesticides are less important.
99
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Table 24. Estimated cost Impact on agricultural pesticide users of Incremental requirements of 1972 FIFRA as amended,
assuming complete pass-through of costs.
Cost Item
Data
Source
Calculations
Estimated annual cost
1. Manufacturers and formulators pass-through of
a. Annual Incremental costs
b. One-time rereglstratlon costs
c. Total
Table 22 $37,389,000 x .59 -
Table 22 $68,525,000 x .59 at NW. 10 yrs
$22.059.864
6.579.756
$28.639.620
o
o
2. Wholesaler-retailer price spread on Item 1
3. Direct costs to fanners
a. Applicator certification, retraining and
records (farmers & commercial applicators)
(1) Annual cost
(a) Fanners (private applicators)
(b) Commercial applicators
(2) Initial certification cost
(a) Fanners (private applicators)
(b) Commercial applicators
(3) Total applicator cost
b. Disposal
(1) Farmers
(2) Commercial applicators
(3) Total
4. Total annual costs to agriculture 17
Table 21 $28,639.620 x 1.5
42,959.430
Table 22 $4.875,000
Table 22 $10,864,000 x .59 - 6,409.760
Table 22 $12,750,000
Table 22 $10,560,000 x .59 • 6,230,400
$18,980,400 at 10X, 10 yrs - 3.088*973
Table 22 $10,500,000
Table 22 15,250,000 x .59 • 8,997.500
14,373.733
19,497.500
$105,470.283
I/ In addition, further costs, estimated at $19,200.000 per year could possibly result from excess pesticide usage (Section 12-G) 1n situations where
less-than-!abel rates would give adequate control and where farmers do not get permissive recommendations.
-------
Table 25. Estimated incremental cost, 1972 FIFRA as amended
to agriculture, by regions.
Region
Pacific
Mountain
N. Plains
S. Plains
Est. total
acres of
cropland!/
(000 acres)
19,049
34,850
88,313
33,907
Lake States 31,507
Corn Belt
Delta
States
Appala-
chians
Southeast
Northeast
U.S. Total
70,718
15,933
14,758
11,539
12,204
332,788
Total pesticide
use, 1971
(Ib. AI)2/
(million Ibs)
50.1
14.0
37.7
41.7
35.4
100.6
60.1
33.5
71.9
20.9
465.9
Estimated
incremental
1972 FIFRA costs
to agriculture
($000)
$11,349
3,171
8,541
9,437
7,952
22,800
13,616
7,589
16,280
4,735
105,470
Incremental
cost per acre
of total cropland
($)
$0.60
0.09
0.10
0.28
0.25
0.32
0.85
0.51
1.41
0.39
0.32
^/Source: Agricultural Statistics, 1972, USDA.
^/Source: Farmers Use of Pesticides in 1971, ERS, USDA, Agr. Econ. Report No. 252.
101
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B. Industrial User Costs
Estimated incremental costs, resulting from provisions of 1972 FIFRA as
amended, to industrial users of pesticides are shown in Table 26.
Incremental costs to industrial users result from the pass-through of
increased costs of manufacturers, formulators, and applicators arising
from the additional requirements of 1972 FIFRA as amended. It is estimated
that industrial users consume 21.5 percent of the total volume of pesticides
sold in the United States. On this basis costs to industrial users, resulting
from the incremental requirements of 1972 FIFRA as amended, would
approximate 32.0 million per year during the ten years beginning October 21,
1976. As shown in Table 26, these costs result from the following:
1. Pass-through costs from manufacturers
and formulators $10,446,051
2. Wholesaler-retailer price spread 15,669,076
3. Applicator certification, retraining
and records costs 2,707,774
4. Disposal costs, commercial applicators 3,281,800
5. Total $32,104,701
C. Household User Costs
Estimated annual costs to household users of pesticides, resulting from
the incremental requirements of 1972 FIFRA as amended, are shown in Table 27.
It is estimated that household users of pesticides consume 16.25 percent
of all pesticides used in the United States. On this basis, total incre-
mental costs to household users is estimated at $24.2 million. The major
part of this cost ($19.7 million), results from pass-through of increased costs
to manufacturers and formulators plus wholesale-retail price spreads for
these products. Increased costs to commercial applicators resulting from
certification, retraining, records keeping and disposal of containers
account for the balance of the cost.
D. Governmental User Costs
Use of pesticides by governmental installations and agencies (e.g., Forest
Service, Bureau of Land Management, Defense Department, etc.) is estimated
to consume approximately 2.9 percent of all pesticides used in the United
States. Costs to governmental users of pesticides resulting from the
incremental requirements of 1972 FIFRA as amended are estimated at $3.6
million annually for the 1976-1985 period (Table 28). Again, the major
102
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Table 26. Estimated cost- Impact on Industrial pesticide users of Incremental requirements of 1972 FIFRA as amended.
1.
2.
3.
4.
5.
Cost Item
Manufacturers and formulators pass-through of
a. Annual Incremental costs
b. One-time reregl strati on costs
c. Total
Wholesaler- retailer price spread on Item 1
Applicator certification, retraining,
and records cost
a. Annual cost-commercial applicators only
b. Initial certification cost-commercial
applicators only
c. Total applicator cost
Dlsoosal costs - commercial applicators
Total annual costs to Industrial users
Data
Source
Table 22
Table 22
Table 21
Table 22
Table 22
Table 22
$37,389,000 x
$68,525,000 x
1.5 x $10,446
$10,864,000 x
$10,560,000 x
$15.250,000 X
Calculations
.2152 -
.2152 at 10X, 10 yrs -
.051
.2152 •
.2152 at 10X, 10 yrs •
.2152
Estimated annual cost
$8,046,113
2,399,938
$10,446,051
15.669.076
2,337,933
369,841
2,707,774
3,281 .800
$32.104,701
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Table 27. Estimated cost Impact on household and Institutional users of pesticides, of Incremental requirements of 1972 FIFRA
as amended
Cost Item
Data
Source
Calculations
Estimated annual cost
1. Manufacturers and formulators pass-through of
a. Annual Incremental costs
b. One-time rereglstratlon costs
c. Total
Table 22 $37,389,000 x .1625 -
Table 22 $68,525,000 x .1625 at 10X, 10 yrs
$6,075,712
1,812,221
$ 7,887,933
2. Wholesaler-retailer price spread on Item 1
Table 21 1.5 x $7,887,933
11,831,899
3. Applicator certification, retraining
and records costs
a. Annual cost-commercial applicators only
b. Initial certification cost - commercial
applicators only
c. Total applicator cost
4. Disposal costs, commercial applicators
5. Total annual costs to households
Table 22 $10,864,000 x .1625 -
Table 22 $10,560,000 x .1625 at 10X, 10 yrs
Table 22 $15,250,060 x .1625
1,765,400
279.271
2,044.671
2.478.125
$24,242,628
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Table 28. Estimated cost impact on governmental pesticide users of Incremental requirements of 1972 FIFRA as amended.
lt
2.
3.
5.
Cost Item
Manufacturers and formula tors pass-through of
a. Annual incremental costs
b. One-time rereglstratlon costs
c. Total
Wholesaler-retailer price spread on Item 1
Applicator certification, retraining, disposal
and records cost
a. Annual cost - commercial applicators only
b. Initial certification cost - commercial
applicators only
c. Total' applicator cost
Disposal costs, commercial applicators
Total annual costs to governmental users
Data
Source
Table 22
Table 22
Table 21 If
Table 2*2
Table 22
Table 22
Calculations Estimated annual cost
$37,389,000 x .0291 - $1,088,020
$68,525,000 x .0291 & 10X, 10 yrs - 324,527
.$1,412,547
1.0 x 1,412,547 l",412,547
$10,864.000 X .0291 • 316,142
$10,560.000 x .0291 9 10X, 10 yrs • 50,011
366.153
$15,250.000 X .0291 * 443,775
$3,635,022
I/ The "normal" price spread of 1.5 has been reduced to 1.0 reflecting more favorable purchase terms on government contracts.
-------
part of these costs $2.8 million results from pass-through of manufacturers'
formulators' and distributors costs. In calculating the wholesale-retail
price spread on government purchases, a lower price spread (1.0) was
used on the assumption that government purchases would be on more favorable
terms than normal retail purchases by farmers, industry or households.
The balance of the costs to government $0.8 million would be related to
applicator costs for certification, retraining, records and disposal.
It is recognized that in many instances governmental application of
pesticides would be made by governmental employees. However, it is
assumed that such employees would be subject to certification require-
ments and other regulations to the same degree as private and commercial
applicators.
E. Summary - Economic Impacts on User Groups
Based on the assumption that manufacturers, formulators, distributors and
commercial applicators will pass-through all costs associated with incre-
mental requirements of 1972 FIFRA as amended and that these costs will be
proportionate to consumption by user groups, and further that direct
costs to farmers, resulting from incremental requirements of 1972 FIFRA
as amended, are as indicated, the incremental costs resulting from 1972
FIFRA as amended are as follows:
User Group Incremental Cost - 1972 FIFRA
(millions)
Agriculture $105.5
Industry 32.1
Households 24.2
Government 3*6
Total $165.4
/-
These are direct costs only. Other possible costs which have not been
estimated would include:
1. Section 12-G costs (Use Inconsistent with Labels) which may
result from situations where excess quantities of pesticides
are applied because label rates are greater than required for
effective control and users could not or did not obtain written
recommendations from "knowledgeable experts" which would
permit them to use less-than-label rates. Such costs would
result from costs of excess pesticide used and from possible
damage to growing or follow-on crops, especially in the case
of herbicides.
106
-------
2. Use of less-effective pesticides to avoid problems involved
with the use of restricted pesticides. Costs could result
from less effective control, use of more expensive substitute
pesticides where heavier doses or more frequent applications
are required.
3. Losses resulting from non-use of pesticides due to lack of
good substitutes for restricted materials and reluctance
to incur costs of application of restricted pesticides by
certified applicators.
107
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XII. Economic Impacts on Consumers of Final Products Resulting From
Incremental Requirements of 1972 FIFRA as Amended
Pesticides constitute an important input to the production and storage of
many products which are important to the consumer and to the maintainance
of high standards of living in the United States.
This chapter will examine those economic impacts resulting from implementation
of 1972 FIFRA as amended which are derived from the role of pesticides as
one of a group of technical production inputs. It does not consider the
impacts on consumers as direct users of pesticides in applications in the
home or on lawns or gardens. These were considered in Section X of this
report.
A. Role of Pesticides in Food and Fiber Production
Pesticides have become increasingly important in the production of food
and fiber crops in the United States. Insecticides, herbicides, fungicides
and similar materials contribute to modern* agricultural production in the
following ways:
* reduce costs of production
* increase yields
* improve crop quality
* permit more timely cultural practices
* reduce losses in livestock production
Although these contributions are important to the efficient production of
U.S. food and fiber crops and are an important factor in maintaining an
abundant and relatwely low-cost supply of food and fiber for the U.S.
consumer, it is recognized that the increased utilization of chemical
pesticides poses hazards to humans, animals, birds, aquatic life and to
the environment in general.
It has been estimated, in Part II of this report, that the direct annual
costs to agriculture for the next 10 years from the implementation of
Section 3, 1972 FIFRA as amended, would be approximately $105,470,000
if all additional (incremental) costs are passed forward to agricultural
users. As of the present time, this appears to be the most logical
assumption on which to base an estimate of the economic impact of the
Incremental requirements of 1972 FIFRA as amended.
108
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1. Relative Importance of cost of pesticidal materials as related to
total costs of production and harvesting - selected crops
The relative importance of pesticides (insecticides, herbicides and fungi-
cides) as a part of the total costs of production and harvesting varies
substantially among crops, from as much as 20 percent for such crops as
cotton to as little as one percent for alfalfa hay. Some crops use no
pesticides.
For those crops where pesticides represent an important production input,
any appreciable increase in the cost of these materials, resulting from
pass-through of increased registration costs by manufacturers, would be
a factor influencing the profitability of these crops to farmers and would
influence levels of production in three ways:
* By shifts to other "more profitable" crops
* By reduced use of pesticides resulting in lower yields
* Shift to alternative pest management programs which could maintain
yields, e.g. integrated pest management programs.
Prices of most farm products have not been directly related to costs-of-
production, but are more directly related to marketable supplies of these
products. Thus, the price impact on consumers would be indirect, through
supply impacts, but in the long-run would, nevertheless, be real.
Table 29 shows that relative cost of pesticides as a part of the total
costs of production and harvesting for selected crops.
Major crops for which pesticides represent an important part (over 10 per-
cent) of total farm costs include cotton, corn, soybeans, rice, tree fruits
(apples, oranges, pears), field peas,' peanuts and asparagus. Among this
group are three of the most important field crops produced in the United
States, soybeans, corn and cotton. In 1973, cash receipts from these three
crops totaled $25 billion or 59.1 percent of total cash receipts from all
crops. Adding receipts from the other crops shown under I in Table 29.
brings the total to $28.6 billion or 67.6 percent of total cash receipts
from crops.
Crops where pesticides represent a moderate part of total production cost
(5 to 9 percent) are shown in category II, Table 29. Major crops include
tobacco (cash receipts $1.6 billion), potatoes ($1.2 billion) and sugar
beets ($0.44 billion).
Crops where pesticide costs are relatively small (less than 5 percent include
the major small grains — whe§t (1973 value $6.5 billion), barley ($0.85
billion) and rye ($0.05 billion), hay and other miscellaneous crops.
109
-------
Table 29. Percentage of total variable production and harvesting costs
accounted for by pesticide materials, representative crops
Percent of total variable cost • .
Category and crop reresented by esticide material si/
I. Crops where pesticide costs are a
large part of total costs
Cotton 20
Peanuts - 20
Field peas 20
Soybeans 19
Asparagus 19
Pears 1 5
Corn 1 1
Rice 11
Appl es 10
Oranges 10
II. Crops where pesticide costs are a
moderate part of total costs
Cucumbers 8
Alfalfa seed 7
Carrots 7
Flax 7
Tobacco 6
Sugar beets 6
Cherries 5
Potatoes 5
Dry beans 5
Bell peppers 5
III. Crops where pesticide costs are a
small part of total costs
Grapes 3
Wheat 3
Rye 3
Onions 3
Barley ?
Alfalfa hay 1
Source: Primary source "Selected U.S. Crop Budgets," Economic Research
Service, U.S. Department of Agriculture, 1971 plus cost-of-
production studies from selected State Agricultural Experiment
Stations.
i/Percent of total variable production costs, including purchased inputs,
labor, power and equipment, and interest on operating capital.
110
-------
B. Price Relationships, Prices Paid by Farmers, Farm
Prices and Consumer Food Prices
Although the relationship between farm costs and consumer prices is in-
direct (through the supply function) and operates only over long-run
periods, it is nevertheless real. Table 30 and Exhibit 4 show the
relationships between indexes of consumer prices for all foods, prices
paid by farmers for production items, wholesale farm prices and whole-
sale prices for all commodities. As seen in Exhibit 4, these indexes
followed similar patterns 1964-1972 when farm prices began to advance at
a more rapid rate. This spurt in farm price levels was occasioned in part
by a substantial expansion in export demand, particularly the massive
sales of wheat and corn to USSR and to the Peoples Republic of China.
Exhibit 5 shows the relationships in percentage changes in indexes of
consumer prices for all foods and prices paid by farmers for production
items. The relative changes were reasonably consistent 1965-1971. In
1972-73 the situation was influenced by Phase II and Phase III wage and
price controls which resulted in departures from relationships which had
existed.
Although the relationship between prices paid by farmers for production
and consumer food prices is influenced by a wide number of factors, a
reasonably consistent relationship appears to exist and the influence of
Section 3, 1972 FIFRA as amended, insofar as it results in increased
pesticide costs to farmers, would in the long-run tend to put upward
pressures on consumer food prices.
C. Estimated Quantitative Impact of Section 3, 1972 FIFRA as
Amended, on the Consumer
The food industry in the United States, from basic agricultural production
to retailing, is competitive. Profits are relatively low as compared with
many other industries and for this analysis it is assumed that increased
costs are ultimately passed forward to the consumer as higher food prices.
This may not be a direct pass through of costs but will in many cases be
reflected in lower supplies as producers shift out of less profitable enter-
prises. It is further assumed that as these costs are passed forward, pro-
cessors, wholesalers and retailers maintain their margins and mark-ups on
the higher cost base.
Table 31 shows the relationships between cash receipts from farming,
total production costs and costs of pesticides used in crop production.
Ill
-------
Table 30. Wholesale and consumer price Indexes, 1959-1974
ro
Year
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
Wholesale farm
products
97.5
97.2
96.3
98.0
96.0
94.6
98.6
105.9
100.0
102.5
108.8
111.0
112.9
125.0
176.3
183.7
Price
Wholesale all
foods
90.7
92.1
92.1
92.6
92.4
92.8
96.2
101.9
100.0
103.4
109.6
113.5
115.5
121.8
146.4
166.9
index - 1967 = 100
Consumer price
index - foods
87.1
88.0
89.1
89.9
91.2
92.4
94.4
99.1
100.0
103.6
108.9
114.9
118.4
123.5
134.5
161.7
Prices paid by
for production
93
92
93
94
95
94
96
99
100
102
106
no
115
122
146
169
farmers
i terns
-------
o
0
r-l
II
VO
1
O)
•o
»— i
190 ,
180 -
170 •
160 .
150 .
140 .
130 -
120 .
110
100 '
90 '
0
\
Prices paid by fanners for production Items
Consumer price index—all foods
Wholesale price—farm products
Wholesale price—all foods
1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Year
Exhibit 4. Price indexes, farm and food.
-------
v.
tO
u
Percent
20
18
16
14
12
10
8
6
4
Cbnsumer price Index, all foods
Prices paid by fanners for
production items
Exhibit 5.
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Year
Changes in indexes of consumer prices for all foods and prices paid by farmers
for production items, 1965-74.
-------
Table 31. Cash receipts, estimated total variable production costs and pesticide costs,
U.S. crop production, 1973 I/
en
Crop
011 seeds
Feed grains
Cotton
Fruits & nuts
Vegetables & melons
Food grains
Tobacco
Other
Total
1973
Cash receipts
($ million)
$ 8,742
9,419
2,509
3,101
4,175
6,228
1,592
2,406
$38,172
Est. total variable pro-
duction & harvest costs
($ million)
$ 6,556
7,064
1,882
2,326
3,131
4,671
1,194
1,805
$28,629
% pest.
costs
(%)
19
10
20
10
6
3
6
8
Estimated
pesticide costs
($ million)
$1 ,246
706
376
233
188
140
72
144
$3,104
i/
Source: Agricultural Statistics 1974, USDA, and "Selected U.S. Crop Budgets" ERS, USDA.
-------
It Is estimated that 85 percent of agricultural pesticides are used on
crops. Therefore, total agricultural value of pesticides in 1973 =
$3,104,000,000 (crops) T .85 = $3,652,000,000. This compares with an
estimated 1973 value of agricultural pesticides of $3,707,000,000 derived by
expanding value of production of synthetic organic pesticides as reported
by the U.S. International Trade Commission, by the manufacturer-retail
spread of 1.5.
It was estimated that the total annual cost to agriculture which could
result from the implementation of incremental requirements, 1972 FIFRA
as amended, would be in the order of magnitude of $105,470,000. This would
represent a 2.9 percent increase in the cost of pesticides to the farmer,
or an increase in total variable crop production costs of approximately
0.37 percent.
The farmer's share of the consumer's food dollar, as reported by the USDA
in the Marketing and Transportation Situation, was approximately 42.5 per-
cent in 1974 and 45.6 percent in 1973. It is recognized that a substantial
part of this farm-retail price spread consists of costs such'as transpor-
tation, labor, packaging, etc., not specifically related to the farm value
of the foods produced. However, another part, the wholesale and retail
"mark-up" is directly related to the cost of the product to the wholesaler
and retailer.
Assuming that the incremental costs to the farmer of 1972 FIFRA as amended
are passed forward through the marketing system, that fresh packers and
processors profits are maintained and that gross margins of wholesalers
and retailers are maintained, then the impact on consumer food prices
of a $105,470,000 incremental cost to agriculture would be approximately
as follows:
1. Incremental cost to agriculture $105,470,000
2. Plus packers and processors' profits
on sales of 3 percent 1_/ 3,164,100
3. Cost to wholesalers $108,634,100
4. Plus wholesalers' margins on sales of
5 percent!/ 5.431,705
5. Cost to retailers $114,065,805
6. Plus retailers margins on sales of
20 percent!/ 22.813,161
7. Equals total incremental cost to con-
sumer associated with Section 3, 1972
FIFRA as amended $136,878,966
This is a simplified analysis and does not consider those marketing costs
such as transportation, etc. which would not be impacted by 1972 FIFRA.
I/Source: Financial data obtained from food processors, DPRA files.
-'Developments in Marketing Spreads for Agricultural Products in 1973, ERS,
USDA, Report No. ERS - 14 (1974)
page 12, Table 2 shows wholesale margin ranging from less than 1
percent with most values in the 3-9 percent range.
page 13, "Retail store margins for the 19 items ranged between 10
and 43 percent of the retail selling price, but are clustered
around 20 percent." Since the margin used here in based on whole-
sale price, it may be low.
116
-------
Consumer expenditures for food consumed in the home were estimated at
$112.8 billion in 1973 and $130.4 billion in 1974. On this basis, the
additional cost to the consumer resulting from the incremental requirements
of 1972 FIFRA would be only 0.1 percent of the national food bill. Al-
though this cost'is small in percentage terms, it is large ($136.9 million)
in absolute terms. In addition, it must be recognized that this is only
the impact on the consumer's food budget. To this $136.9 million must be
added the non-food, direct impacts on household use of pesticides ($24.2
million) plus a part of the added costs to commerce and industry which
would be passed forward as higher consumer prices. Finally, the consumer,
as the ultimate taxpayer would bear most of the costs associated with the
impact on governmental uses of pesticides (estimated at $3.6 million).
Thus, the impacts on the consumer, both direct and indirect, resulting from
incremental requirements of 1972 FIFRA as amended could total $165 million
dollars annually for the next ten years.
117
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XIII. Inflationary, Energy, Employment and Summary .Impacts of Incremental
Requirements of 1972 FIFRA as Amended
There is no formula by which the specific impacts of incremental requirements
of 1972 FIFRA as amended on inflation, energy, employment and society in
general can be measured. 1972 FIFRA as amended is only one of a myriad
of factors bearing on these sectors of our national economy.
Although the quantitative measurement of these impacts is complex, the
direction and general severity of the impacts can be identified.
A. Inflationary Impacts
The estimated cost impacts of incremental requirements of 1972 FIFRA as
amended on manufacturers, formulators, users and the consumer were dis-
cussed in Sections I-XI of Part II of this report. It was assumed that,
in the long-run, these costs would be passed on to direct users and that
most of this incremental cost would eventually reach the consumer.
Given the assumptions made, the estimated annual cost impacts 1976-1985
on direct users would be:
(millions)
* Agriculture $105.5
* Commerce and industry 32.1
* Households 24.2
* Government users 3.6
* Total $165.4
Although a part of these direct user costs may be absorbed by agriculture
and commerce and industry, most costs would ultimately reach the consumer.
It is estimated that the cost to the consumer resulting from higher food
prices would be in the order of magnitude of $136.9 million and adding to
that household direct user costs of $24.2 million, government costs of $3.6
million and a "part of the costs to commerce and industry users could
easily bring the annual cost to the consumer to $165 million for the next
ten years.
B. Energy Impacts
Pesticides are derived from both natural (e.g. pyrethrum) and synthetic
sources. Many of the most effective pesticides, whether herbicides or in-
secticides, are synthesized from petroleum and pesticides and are produced
from such products as benzene, naptha and toluene. The organochlorines,
organophosphorus, carbamates, phenoxys, phenylureas and benzoics are
118
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petroleum-based chemicals. Ninety percent of all organic chemicals are
petroleum-based. However, the actual quantities of petroleum used in
their manufacture is small when compared to other uses of petroleum pro-
ducts in the United States.
The shortage of pesticides (especially herbicides) which occurred in 1974
was not so much a function of the petroleum shortage but was the result
of substantial expansion in demand by farmers coupled with limits to
production capacity of manufacturers. However, if pesticide consumption is
to be maintained, or to continue to expand, continued availability depends
on the profitability of this industry and its ability to compete for pe-
troleum products. Thus, the need for energy remains critical.
The rapid expansion in the use of pesticides has been the result of technical,
biologic and economic conditions. Apparent increases in insect infestations
have required increasing control efforts as have apparent increases in
insect resistance to pesticides over time. The effectiveness of modern
herbicides together with increasing labor and fuel costs have increased
farmers' interest in chemical weed control and technical improvements in
both aerial and ground application equipment have facilitated the use of
pesticides.
By using pesticides, especially herbicides, farmers have made reductions
in use of fuel in tillage and other cultural practices. In this sense,
if petroleum conservation measures continue to be emphasized, tillage
should be minimized and herbicide use could increase.
If pesticide availability is restricted or if farmers are forced to use less
effective pesticidal materials as a result of the impacts of 1972 FIFRA as
amended, then more farmers will have to resort to mechanical tillage and
other mechanical or biological means. No comprehensive study of the trade
offs between chen.ical and-non-chemical control of pests has been completed.
However, a recent study by the National Academy of Sciences I/ concluded
"The majority of modern cropping systems returned several calories of digest-
ible energy per calorie of total cultural energy; that is, most of the
technologically advanced systems that were studied generated far more
digestible energy than was spent in energy during production.
C. Impacts on Productivity
American agriculture is the most productive in the world and productivity
of the American farmer has been increasing at a rapid rate over the past
25 years. Exhibit 6 shows the number of people supplied per farmer in the
United States, 1950-1975.
!/ Agricultural Production Efficiencies, National Academy of Sciences,
-
119
-------
PEOPLE/FARM WORKER
40
35
30
25
20
15
•
CARRYING CAPACITY
OF THE FARMER
1950 1955 I960 1965 1970 1975
Exhibit 6. People supplied farm products
per U.S. farmer, 1950-1975.
Although the carrying capacity (productivity) of the U.S. farmer has more
than tripled in the past 25 years, there are signs that this trend is
leveling off. Food production rests on two bases, land and the farmer and
the interaction of these two primary factors of production is conditioned
by capital requirements, new technologies, and regulatory action pro-
grams. A major factor affecting the productivity of agriculture in the
next decade will be available technology based on research and public
policy that encourages rather than constrains its adoption.
D. Impacts on Employment
If the requirements of 1972 FIFRA as amended result in a substantial "fall-
out" of pesticides, then those small pesticide formulators who are dependent
on these products will be forced out of business.
It is not anticipated that basic manufacturers of AI would face closure de-
cisions. The major burden would fall on formulators. Without a detailed
study of financial costs and returns of pesticide formulators before and
after Section 3, 1972 FIFRA, there is no real basis for estimating the number
of firms which might face possible closure. These firms will vary from
small operations with annual gross sales of less than $500,000' to major
multi-million dollar operations. Information from 33 formulators, developed
during this study, indicated average annual gross sales of $2,750,000 per
firm. Sales ranged from a low of $200,000 to a high of $18,000,000.
120
-------
Discussions with formulators indicated that a large proportion of the
smaller formulators were pessimistic regarding their ability to survive
if faced by their interpretation of full implementation of 1972 FIFRA as
amended requirements.
Confidential-data from 33 formulators, developed through personal contacts
in this study, indicated average employment per firm to be 45. Distribution
of these firms according to number of employees was as follows:
No. employees No. firms
Less than 10 5
10-19 7
20 - 49 10
50-99 6
100 or more 5
E. Impacts on Competition
There is little question but that the requirements of 1972 FIFRA as amended
would affect competition in the pesticide industry. Small formulators could
be forced out and the competitive position of basic manufacturers, who have
the volume and resources to comply with the requirements of the Act, would
be enhanced. It is recognized that Section 3Cld provides that applicants
must file with EPA a full description of tests made and that such data may
be made available to other applicants (e.g. formulators) on payment of
"reasonable compensation." If agreement is not reached on such compensation,
then the Administrator (of EPA) may make such determination, If the owner
of the test data does not agree with the level of compensation fixed by the
Administrator, then the payment may be determined in the Federal District
Court.
If owners of AI test data ~'o not choose to release these data to formu-
lators and do not agree v. - the Administrator's determination of "reason-
able compensation" then Ua process becomes involved and costly to all parties
concerned.
121
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F. Summary
There is little argument to the fact that provisions of 1972 FIFRA as amended
will provide data on which reasonable evaluation can be made of the safety
of pesticidal materials to humans, animals, birds, fish and the environment
in general. The principal argument, from the standpoint of society, is
whether the benefits of such regulatory requirements are equal to or exceed
the direct and indirect costs involved. This analysis has attempted to
estimate the rough order of magnitude of the cost impacts which might result.
No attempt has been made to make a comparable evaluation of the benefits.
It is not the function of this study to make such a cost-benefit evaluation
or to judge the claims for or against the requirements of 1972 FIFRA as
amended.
122
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XIV. The Minor Crop Problem
A study by Magriess, Markle and Compton _!/ listed over 560 Food and Feed
Crops in the United States. Of these, about 350 can be said to be truly
minor crops. They listed 160 grasses and legumes; 10 grain crops; 35
major fruit, nut and vegetable crops and 260 minor crops of this category;
16 minor and 8 major oil food crops; and 62 condiments, spices and essen-
tial oil crops.
Discussion and correspondence with agronomists and horticulturalists in
State Agricultural Experiment Stations indicated that some of these crops
could be on the "endangered crops" list if the EPA regulations made pest
control too difficult. A few of those are listed here:
strawberries guar millett
cranberries wild rice sweet sorghum (syrups)
parsley Christmas peas garlic and onions
buckwheat mint other small fruits
hops sunflowers and berries
leeks safflower many condiments
Chinese cabbage broom corn tropical fruits
oil seed
At the present, one cannot say if a minor crop may be endangered by the
withdrawal or failure to register a given chemical or formulation. Even
when the "restricted" list and new guidelines are available and the Act
fully implemented, considerable study will be needed to assess the true
impact.
An ad hoc University EPA-USDA Committee submitted a rather comprehensive
report on this subject in August, 1973 2/. They pointed out the hesitancy
of many pesticide manufacturers to follow through with all the research
and testing needed to clear and register those minor use chemicals where
there was a questionable chance of profit. They said that already there
is urgent need to clear a large backlog of testing and evaluation in order
that a needed supply of pesticides may be available for use on minor crops.
Without this ready availability of usable pesticides, the variety of
food products could diminish and some food product prices could become
exorbitant and production of these "minor" crops would be driven overseas.
The loss of materials which were being effectively used against minor
crop pests has caused some critical situations. The new regulations re-
quiring strict testing and labeling affects some 360 minor crops, many
with 10-15 different pests each.
I/ Food and Feed Crops of the United States, Magness, Markle and Compton,
New Jersey Expt. Stat. Bull. 828, 1971 (Product IR-4, IR BU11. #1).
2/ The Development of data required for registration of pesticides for
specialty and small acreage crops and other minor uses. Dr. R. J.
Sauer, et al., 1973.
123
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Where growers of minor crops are in a climate-soil or market situation
that forces production of high-value but low-acreage crops, they are par-
ticularly vulnerable to problems associated with possible losses of
pesticides specific for use on minor crops. Although the total volume and
value of minor crops may be small when compared to basic crops, nevertheless
they are of great significance to the individual producers and offer signif-
icant variety to the national food supply. Relative importance of minor
crops may be illustrated by 7 minor crops shown in Table 32. These data
show a minor crop may occupy no more acreage than a good-sized farm or
ranch, yet be in high demand and bring very high per acre returns. The
data for a major crop, corn, is shown for comparison. The acreage of these 7
crops is 0.3 percent of corn acreage but the gross value is 1.9 percent of
gross corn value.
There is considerable fear that when pesticides are withdrawn because of
registration and labeling costs and delays, they will be replaced with
difficulty and some not at all. No private company can go on'developing
and producing pesticide chemicals at a loss. As recommended in the Sauer
report, some states feel that the government may have to subsidize the
cost of testing, evaluating and registering pesticides which have special
minor uses or else set up special privileges for minor crops. Section 24-C
may provide a possible means for State registration of pesticides for use
on minor crops.
It would appear, until more detailed studies can be made, that some of the
recommendations made in the Sauer report are worthy of consideration in
adopting the revised FIFRA Act and Guidelines to the problems of minor
crop uses and minor use pesticides - viz:
1. Utilize multi-discipline groups for constantly reviewing minor
crop needs and the needs for registration of minor use
pesticides.
2. Use a regional approach to solving minor use problems;
*
3. Adopt systems of minor crop groupings both for testing and
labeling.
4. Establish tolerance limits based on ordinary human activities.
5. Help states and federal agencies develop processes and financial
support to develop, test and label needed minor use pesticides
where these are needed and where the volume of sales expected
offers no profitable return to the manufacturers.
124
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Table 32. Representative minor crops, acreage, production
and value, United States, 1973
Name (Common)
Garlic
Strawberri es
Cranberries
Mint
Hops
Maple syrup
Broom corn
7 Crops - Totals
Corn 61 ,
Acres
6,900
40,860
22,800
82,000
31 ,400
19,300
203,260
800,000
* Average value - 7 minor crops
Source: Agricultural Statisti
Production
Unit Amount
cwt. 897,000
cwt. 4,773,000
barrels 2,100,300
pounds 4,479,000
pounds 54,769,000
gallons 1,099,000
tons 3,300
bu. F. 600, 000, 000
= $l,255/acre, average val
cs, 1974, USDA.
Value*
($000)
$ 11,021
131 ,592
27,616
31 ,842
41 ,722
9,670
1,634
$255,097
$13; 300, 000
ue corn - $215/aci
125
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PART III
ESTIMATE OF ADDITIONAL UPDATE COSTS REQUIRED TO REGISTER
NEW ACTIVE INGREDIENTS AND TO REREGISTER EXISTING ACTIVE INGREDIENTS
AND PRODUCTS
I. Background
Section 3, 1972 FIFRA as amended, requires that all existing products
(estimated to number approximately 35S500) and active ingredients (AI)
be reregistered with EPA by October 21, 1976 (40FR28247). Certain ex-
ceptions' may be made if long-term testing for certain pesticides cannot
be completed by this date. The registration requires full compliance with
all incremental requirements of 1972 FIFRA as amended, plus all- previously
existing registration requirements. However, product use history may be
such that updating certain requirements may be waived. Thus, the total
cost of accomplishing this reregistration would include not only the costs
of meeting the incremental reregistration requirements of 1972 FIFRA as
amended, but also the "catch-up" costs necessary to update EPA product
registration files for all information and tests required for registration.
Those registration and reregistration costs associated only with the in-
cremental requirements of 19/2 FIFRA as amended, were analyzed in Part II
(I) of this report. This part considers the costs of updating product
files to meet previously existing (prior to 1972) registration and reregis-
tration requirements.
A. Required Tests and Test Costs
The costs shown are based on commercial laboratory test costs but represent
industry's estimates of the amount of testing which will be required to bring
all products into compliance with all registration requirements. Table 32
shows data requirements for new registrations and reregistrations and com-
mercial costs for selected tests.
Test costs were obtained from commercial testing laboratories and will vary
in relation to the complexity of products tested, the length of the testing
period and the number and kinds of test animals used. Costs shown do not
Include the cost of pesticidal materials furnished nor company administrative
costs assosicated with registration or reregistration.
Tests shown in Table 33 are designated as either "required" or "conditionally
required." "Required" tests must be conducted on all products; "conditionally
required" tests may or may not be required depending on the circumstances
under which the pesticide is to be used and the types and degrees of exposures
anticipated. In the "conditional requirement" column in Table 32, the letter
126
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Table 33. Data requirements and estimated test costs, pesticide registration
ro
Estimated cost
to perform New Registrations Re-registration Formu-
Data Requirements required tests Reg.
I.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Product Hazard
A. Humans and Domestic
Animal s
Acute Oral LD-50*
Acute Dermal LD-50*
Acute 1° Dermal Irritation*
Acute 1° Eye Irritation*
Inhalation LC-50**
Intravenous Routes of
Exposure
Subacute Dermal Tests
Subacute Inhalation-90 day
Subacute Oral- 90 days
(2 species)
Teratological Studies
Neurotoxicity Studies
Metabolism Tests
$300-500 X
550 X
300 X
350 X
500-600
400-500
6,000
8,000-10,000
30,000-40,000
6,000-8,000
1,000
Oncogeni city/ Feeding Stud1es75, 000-1 25, 000
Reproduction Studies
Potentiation Studies
Re-entry Studies
Reversibility of effects
22,000-25,000
Cond. Reg. Reg. Cond. Reg. lation A.I.
X
X
X
X
X
X
X
X
X
X
X
X X
X X
X X
X X
X X
X
X X
X X
X
F X
X
X
F X
F X
X
X X
Metabo-
lites
X
X
X
X
X
after subacute feeding
30,000-40,000
continued
-------
Table 33. 'Data requirements and estimated test costs, pesticide registration (continued)
00
Data
I.
18.
19.
20.
21.
22.
23.
24.
25.
26.
II.
1.
2.
**
***
Estimated cost
to perform New Registrations
Requirements required tests Reg. Cond. Reg.
Product Hazard (con't)
B. Fish and Wildlife
Avian acute oral LD-50** 1,000 X
Avian subactue dietary
LC-50*** 1,500-2,000 X
Fish Acute Toxi city 600-1,000 X
Acute toxicity for shrimp/
crabs** 2,400 X
Acute toxicity for oyster
larvae** or shell deposition X
Reproduction tests on 15 noo -0 non x
Bobwhite and Mallard 15,000-30,000 X
Subacute or chronic fish ,~ nnn &f- nnn Y
reproduction studies 32,000-46,000 X
Potential hazards relating ,n nnn v
to use patterns IU'UUU x
Additional toxicity data** 20,000-45,000 X
General & Environ. Chemistry
A. General Chemistry 82,000-137,400
Quality Control Procedures company perform
(all disinfectants) X
Chemistry of active in- company perform
gredients - formulation may
be required
May be either formulated product and/or active Ingredient.
Ax/ian arnto Hsta harl hoon rontiivorl iin until 1 071 Thne maw ho enff
Re-registration Formu- Metabo-
Reg. Cond. Reg. lation A.I. lites-
X X
X X
X X
X or X
X or X
X
X
X
X X
X
X
4
fr\v* v«o_v»en1 strati cm anH t»Hl 1 ho v»ovfouorl
on a case-by-case basis; subacute dietary studies, therefore, may not be required for re-registration.
continued
-------
Table 33. Data requirements and estimated test costs, pesticide registration (continued)
Da
II.
3.
4.
5.
Estimated cost
to perform New Registrations Re-registration Formu- Metabo-
ta requirements required tests Reg. Cond. Reg. Reg. Cond. Reg. lation A.I. lites
General & Envrmntl . Chem.
(continued)
A. General Chemistry
Basic Manufacturing Process company
(and Analytical methods) perform X X
Properties of Inerts ' X X
Storage stability " X X
6. Tobacco Residues
ro
to
B. Envrmntl. Chemistry
7. Field Studies Data
8. Soil Metabolism (degrad.)
9. Bound Residues
10. Soil persistence studies
11. Supplemental soil per-
sistence
12. Laboratory leaching studies
13. Leaching studies for pesti-
cides with high mobility
14. Hydrolysis rate 1n pure
water
15. Degradation rate 1n water
containing suspending solids
16. Degradation studies in
sediments
17. Translocation
Generally
performed by
company.
Cost according
to complexity
Done in con-
junction with
tolerance and
residue work
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
continued
-------
Table 33. Data requirements and estimated test costs, pesticide registration (continued)
II.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
Estimated cost
to perform New Registration
Data Requirements required tests Reg. Cond. Reg.
General & Envrmntl. Chem.
(continued)
Livestock & Poultry Drink-
ing Water Generally X
performed
Tests Involving Moving by
Waters company X
Fish residue studies X
Fish natural habitat studies X
Terrestial wildlife X
Photodegradation X
Volatilization X
Effects of pesticides
on microorganisms X
Effects of microorganisms
on pesticides X
Disposal X
Runoff studies***
Re-registration Formu-
Reg. Cond. Reg. lation A.I.
*
X
X
X
X
X
X
X
X
X
X X
X
Matabo-
lites
X
X
X
X
**** Runoff studies are no longer requlied on any registrations.
-------
"F" indicates that data may have been submitted in previous registrations
for a test and if the results of these previous tests meet guidelines re-
quirements, no further testing is required.
In the case of reregistrations, the amount of "update" testing which may be
required, will generally be related to the last date of registration for the
AI or the product. For products which have been recently registered or re-
registered, it would be presumed that only minimal "update" testing would
be required to comply with full registration requirements of EPA after
October 21, 1976. If the product had been registered earlier with a minimum
of test data, substantial updating and "catch-up" testing may be necessary.
Estimates of the costs for performing the tests required for general and
environmental chemistry are not specified since the magnitude of the analytical
work and the costs of such analyses will vary from product to product. Most
companies prefer to do the chemical analyses in their own laboratories since
for many products, patents may be pending and they do not want to divulge
proprietary information on the product.
II. Estimated Additional Update Costs to Industry for Registration
and Kereglstratiion of Pesticides'
This section attempts to develop estimates of the costs to industry for
"updating" existing pesticide registrations and for new registrations to
meet total registration requirements of EPA by October 21, 1976.
The establishment of these costs is, at best, an approximate process.
Costs shown are based on unit costs of performing specified tests in com-
mercial laboratories, estimated in-house (company lab) costs for general
and environmental chemistry analyses and industry estimates of the added
costs of updating pesticide registrations and new registrations as a result
of both quantitative and qualitative increases in testing required above
that which would have been required in 1972. All costs are expressed in
1975 dollars, thus the added costs are intended to represent added costs
resulting from increases in the number and types of tests required as com-
pared to 1972 and changes in the levels of testing required for specific
tests.
As stated earlier, this estimate of costs is not intended to representthe
purely incremental costs associated only with the added test requirements
of 1972 FIFRA as amended. Rather, these costs are estimates of the additional
costs of updating (including "catch-up" costs) registrations for existing
products as compared to 1972 plus the added costs of registering new pro-
ducts again as compared to similar costs in 1972.
The situation is complicated by a variety of factors:
131
-------
1. The use of 1972 as a baseline period to estimate added costs of
registration. Testing requirements and costs have been in-
creasing continuously over the years. However, pending the imple-
mentation of 1972 FIFRA as amended in 1976, there have been fewer
changes since 1972. The year 1972 was assumed as the baseline
year since registration requirements existing in 1972 provide the
most recent base on which added costs of reregistrati on and regis-
tration can be estimated.
2. The types and complexity of products registered. An attempt
has been made to recognize this factor by developing estimates
for simple, moderately complex and complex products.
3. The extent, currency and availability of test data on active in-
gredients and the number of AI involved in formulations.
4. The applications proposed for the products and the exposures
which may result.
5. The "Guidelines" and "Regulations" for registration and reregis-
tration of pesticides establish the basic framework specified, but
the actual tests required may vary with availability of existing
test data and the judgment of the EPA Product Manager regarding
the additional data which may be needed.
A. Additional Costs for Registration of New Active Ingredients
Table 34 shows the estimated added costs to the pesticide industry for
registration of a new active ingredient as compared to 1972 registration
costs for active ingredients. The estimates shown were developed a variety
of sources, including:
* Discussions with EPA personnel, particularly in the Registration
Division
* Discussion with individuals responsible for product testing of
pesticides in pesticide manufacturing firms and pe.sticide formulator
companies
* Discussions with private testing laboratories
* Discussions with pesticide specialists in university agricultural
experiment stations and extension services and the U. S. Department
of Agriculture
132
-------
Information furnished by EPA indicates that approximately 10 new Active
Ingredients are registered per year. Personnel in the Registration Division
estimate that 3 would be classed as "simple" AI, 4 as "moderately complex"
and 3 as "complex". As shown in Table34, the additional costs, above the
1972 base, estimated for the registration of a new active ingredient, are
as follows:
Estimated Added Est. number Total Added
Type of AI Cost per AI AI per year Annual Cost
Simple $275,000 3 $ 825,000
Mod. complex 500,000 4 2,000,000
Complex 975,000 3 2.925,000
Total — TO $5,725,000
Minus 1972 FIFRA incremental costs -1,600,500
Estimated additional update costs $4,124,500
Of this amount $1,600,500 would be accounted for by the six new tests re-
quired by 1972 FIFRA as amended (see page 36 this report). The balance of
$4,124,500 represents the added costs of other tests required on new AI
above the level of testing required prior to 1972.
B. Additional Costs - Registration of New Formulations
In addition to the registration of new active ingredients, each year there
are registered (for the first time) new formulations or new products. These
are entirely new products—not amended uses of existing products. These
products represent new combinations or concentrations of AI's with other
inert materials and are issued new labels by EPA. In most instances, regis-
tration profiles for the active ingredients in chese products will be
available, but additional tests are required for the formulations. The cost
of registering these products will vary substantially depending on their
complexity, their applications and the availability of AI information. EPA
estimates that approximately 5,500 such new formulations are registered
annually. It is expected that the registration of these new products will
require data similar to that required for ^registration of old products
where product files have not been updated, but where basic AI information is
available.
Since there is a normal attrition of old products and replacement with new
products, it is assumed that the costs for registration of new formulations
would be accounted for in the total costs shown for reregistration of the
35,500 products as discussed in Part D. of this report.
C. Additional Costs - Reregistrati on of Active Ingredients
1. Number of active ingredients - EPA estimates that there are approxi-
mately 1,400 AI currentlyregistered. However, it is estimated
that approximately 300 of these are natural oils, solvents or other
133
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Table 34. Estimated total additional cost of data development to register a new active Ingredient (new chemical) 1972 compared
with 1976 (1n 1975 dollars)
Test costs (1n 1975 dollars)^/ ^
Degree of
difficulty
and Year
Simple^
Simple
1976
Moderately
1972
Moderately
TS76
Complex"
1972
Complex"
TT75
Toxicology
$175.000
275,000
complex^
325,000
complex^
500,000
450,000
700,000
Biochemistry
(tolerance, residue
environment
feeding)
$350,000
500,000
600,000
900,000
800,000
1,500,000
Additional test
costs due to new Additional
or expanded require- costs above
Efficacy Total ments since 1972 1972 level
$500,000 $1,025,000 $ 525,000
700,000 1,475,000 800,000 $275,000
750,000 1,675,000 950,000
800,000 2,200,000 1,450,000 500,000
750,000 2,000,000 1 ,300,000
900,000 3.100.000 2,275,000 975,000
Total
Minus 1972 FIFRA Incremental costs
Estimated additional update costs
Total
01str1- added
bution cost
3 $ 825,000
4 2,000,000
3 2,925.000
5,725,000
-1,600,500
$4,124,500
™ Does not Include losers; I.e., products for which registration 1s dropped.
-> Costs are based on experience of small, medium and large basic manufacturers of pesticides.
•J Simple product - Toxicology is not complicated, crop tolerance established on basic chemical and one metabolite.
-* More complicated toxicology and increasing and more difficult metabolite.
-------
chemicals which will need no further data. Thus, it is believed
that there will remain approximately 1,100 AI for which regis-
trations will need to be updated.
Additional reregistration requirements - The specific requirements
for reregistration of AI will include test data for teratogenic,
oncogenic, chronic feeding and reproduction studies and, within
the next five years, mutagenic and chronic fish residues (see
page 36 and 37 this report). However, these 1972 FIFRA incremental
tests will be required only on those AI (estimated to number
approximately 300) where hazards associated with these test areas
are believed to exist. This generally includes those AI where
FDA tolerances are required. The other additional costs which will
be incurred by manufacturers of AI will not be solely attributable
to 1972 FIFRA as amended, but will represent "catch-up" or updating
requirements to bring their AI in conformity with the total range
of tests and levels of testing required by EPA for reregistration
of these AI. Although the general requirements for test data to
support reregistration of AI were specified in Table 33, the final
range of testing required will be determined by a reviewer and the
appropriate product manager of EPA. However, manufacturer tech-
nical personnel responsible for product registration are generally
aware of the tests which will be required for their AI's.
Since the costs of reregistration will vary, by product, depending
on the type of AI and the date of the last registration, AI were
divided into three classes for the purpose of calculating reregis-
tration costs.
Class I
Class II
Class III
Basic manufacturers of proprietary AI and older AI
that have been kept up-to-date.
These manufacturers who recently labeled, or applied
for amended labels, on a yearly or more frequent
basis during the past 5 to 7 years, will generally
face additional data requirements for reregistering
their AI. For example, some of these AI were regis-
tered on a 90-day feeding trial whereas new require-
ments may specify a 2-year feeding trial along with
other additional test data.
Basic manufacturers with AI 10 years old or older
who have not kept registrations of their proprietary
AI up-to-date. This group will need all of the data
required by 1972 FIFRA plus substantial "catch-up"
testing to bring these products up to current regis-
tration requirements.
Basic manufacturers who produce non-proprietary AI.
There is less incentive for manufacturers of these
AI to keep registration profiles up-to-date. As a
result, this class may require more extensive
additional, or "catch-up," testing than Classes I or
1 X •
135
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3. Estimated additional AI reregistrati on costs - Table 35 presents
estimates of the costs which industry anticipates will be required
to update AI registration files and to provide data on the
additional tests required by 1972 FIFRA as amended. It should be
emphasized that the costs shown include all costs concerned with
reregistrati on of AI, including "catch-up" costs plus those which
are purely incremental to 1972 FIFRA as amended.
The cost estimates shown were developed through contacts and dis-
cussions with industry representatives responsible for regis-
tration of AI produced by their firms. The estimates reflect
their experience with registration requirements for the AI for
which they are responsible and their judgment of the costs which
they would incur in accomplishing reregistrati on of these AI
as required by the Act.
As shown in Table 35, estimated total cost additional update ex-
clusive ;of; 1972 FIFRA incremental requirements of $33,325,000 for
accomplishing reregistrati on of 1,100 AI is $243,816,000.
D. Additional Costs - Reregistrati on of Formulations
Section 3, 1972 FIFRA as amended, requires that all existing formulations
(products) be reregistered in conformity to the Section 3 Guidelines and
Regulations, 1972 FIFRA as amended. Although there are no incremental
registration requirements for formulations resulting solely from the pro-
visions of 1972 FIFRA as amended (see.page 32 of this report), provided
that test data on AI are available, industry representatives contacted
during the study estimated the costs which would result from the needs
for updating existing product files to meet current EPA registration re-
quirements. Again, these costs are not solely incremental due to pro-
visions of 1972 FIFRA as amended, but rather represent "catch-up" costs
which would be incurred due to the requirement that all products be re-
registered by October 21, 1976.
1. Number of formulations registered - Based on a product run of
registered labels on June 5, 1975, EPA reported that there were
30,126 products with Federal registration in their files. Of
these, 42 percent, or 12,727, are composed of a single active
ingredient and 58 percent, or 17,379, are multi-active ingredient
products. Distribution of these products, by number of active
ingredients per product, was as follows:
136
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Table 35. Estimated additional costs for reregi strati on of active ingredients as required by 1972
FIFRA as amended V
Class of AI
Manufacturer's Est.
of per AI reregi s-
tration cost
Number of AI to
reregister
Total estimated
reregistrati on
cost
Class I - recent registration,
proprietary
Class II - not recent regis-
tration, proprietary
Class III - non-proprietary
pesticides
disinfectants
Total
($000)
$150 - 300,
avg. 200 200
200 - 500
avg. 300 300
200 - 1 ,200
avg. 300 200
avg. 200 400
1,100
Less estimated incremental costs solely attritutable to 1972 FIFRA
1,100 AI at $23,804 avg. cost 2/
Estimated update costs, net of 1972 FIFRA incremental requirements
— ' Snurrp' Fitimatp*; nf inHnctrv never
irmol yocnnnci hi o -Fnr Hovol rmmont n-F •f-oct A
($000)
$ 40,000
90,000
60,000
80,000
$270,000
26,184
$243,816
ata fr\v>
-*
registration of AI.
Source: Page 37, this report.
-------
No. AI in Number of
formulation products
1 12,747
2 7,769
3 4,704
4 2,844
5 1,199
6 491
7 206
8 96
9 30
10 22
More than 10 U*
Total 30,126
There are also a large number of products (13,000-15,000)
registered under State labels which will have to be brought up
to Federal label standards. Considering both Federal and State-
labeled products and allowing for duplication and for products
which may be dropped, it is assumed that there will be 35,500
products (formulations) to reregister.
From this total of 35,500 registrations, 1,400 AI should be
subtracted, leaving a total of 34,100 products. It is recog-
nized that certain of these products will require little or no
updating. If it is assumed that 10 percent of the total fall in
this category, removing an additional 3,400 products, leaving a
total of 30,700 to be reregistered.
2. Reregistrati on costs - formulations - The analysis of the costs of
reregistering pesticide formulations is based on the specific
assumption that no additional testing requirements (teratological,
oncogenicity, chronic feeding, reproduction, mutagenesis, chronic
fish residues) are imposed by 1972 FIFRA as amended on formulations
provided that registration requirements have been met by all active
ingredients used in the formulation of these products (Federal
Register Vol. 40, No. 129, Thursday, July 3, 1975, page 28243).
Given this assumption, then the additional costs of reregistering
formulations would be limited to "catch-up" testing required to
update product registration files to conform to additional tests
or levels of testing which have been instituted since 1972.
138
-------
Given a five-year registration life for pesticides, formulators
were asked to estimate the costs for reregistration of their
product lines. Contacts were made with 17 formulators represent-
ing 1,334 products. Responses indicated that, if only update
testing, excluding the new requirements of 1972 FIFRA as amended
which apply only to active ingredients, the average, per product
update cost for requirements imposed since 1972 would be approxi-
mately $4,500 per product.
On this basis, the reregistration of 30,700 formulations would
represent an added cost to the industry of $138,150,000.
E. Summary - Additional Costs of Registration or Reregistration,
Exclusive of 1972 FIFRA Incremental Costs
The objective of this analysis has been to estimate the added costs of
registering and reregistering pesticides as compared to similar costs which
would have been incurred as a result of tests and levels of testing re-
quired prior to 1972. These costs include two separate parts.
* Incremental costs which are solely associated with additional
tests required by 1972 FIFRA as amended.
* Other "catch-up" costs required for updating product registration
files to meet current EPA registration requirements.
These costs are further divided into:
* "One-time" costs associated with the reregistration of all existing
active ingredients and formulations by October 21, 1976 as required
by 1972 FIFRA as amended.
* Reoccurring, annual costs associated with the added costs of regis-
tering "new" chemicals.
A summary of these added costs associated with registration and reregis-
tration is shown in Table 36.
139
-------
Table 36. Summary, additional update costs above 1972 test requirements,
associated with registering and reregistering pesticides
as required by Section 3, 1972 FIFRA as amended
Cost Item Amount
A. "One-time" costs
1. Reregistrati on
a. AI, update and new requirements $243,816,000
b. Formulations, update only 138,150,000, ,
c. Total estimated reregistration costs $381,966,000^
2 /
B. "Continuing" annual costs-7
1. Registration of new AI $ 4,124,300^
- In addition to these costs, there would be an added cost of $68,525,000
associated with those reregistrati on requirements solely incremental to
1972 FIFRA, including $33,325,000 in incremental reregistration costs
and $35,200,000 associated with label change costs.
-* In addition to registration costs of new AI, an indirect cost will
result from increased costs of State registrations, projected to increase
to $300 per product from present $100. This would result in an annual
cost increase of $7,100,000 for 35,500 products.
—' In addition, there would be $1,600,500 added cost associated with those
registration requirements solely related to incremental testing re-
quirements of 1972 FIFRA^as amended.
140
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III. Economic Impacts of Additional Update Registration and
Reregistrati on Costs on Users of Pesticides
This analysis parallels the analysis of the user impact of those incre-
mental costs solely attributable to the specific requirements of 1972
FIFRA as amended. The costs shown are applicable only to Section 3, but
includes only those "catch-up" or update costs above levels existing in
1972, necessary to complete product files for registration or reregis-
tration by October 21, 1976. The estimated costs are as follows:
Costs attributable to
Cost Item "update" requirements I/
A. "One-time" update costs
1. Reregistration, AI $243,816,000
2. Reregistration, formulations $138,150,000
3. Total "one-time" costs $381,966,000
B. "Continuing" annual costs
T^Registration, new AI $ 4,124,500
~7 Does not include 1972 FIFRA incremental costs nor label change
costs.
As was stated earlier, additional registration and reregistration costs were
assumed to be borne by users in proportion to their use of pesticides as
fol1ows:
Category % of Total Pesticide Use
Agriculture 59.00%
Industry 21.52
Households 16.25
Government 2.91
Unallocated 0.32
Total 100.00%
Manufacturer-retailer price spreads of 1.5 were used for all user categories
except government where a spread of 1.0 was assumed.
The annual cost impacts on users of pesticides resulting from the added costs
of registering and reregistering pesticides as compared to 1972 baseline costs
are shown in Table 37.
141
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Table 37. Estimated annual economic Impacts on pesticide users resulting from additional update pesticide registration
and rereglstratlon requirements
User group
Cost Source
Calculations
Estimated annual cost
ro
1. Agriculture
2. Industry
a.
b.
c.
d.
a.
Manufacturers' pass-through of additional, annual
costs of registering new active ingredients
Manufacturers and formulators costs of reregistering
pesticides, amortized over 10 years at 10%
Wholesaler, retailer price spread on items a & b
Total annual cost to agricultural users
Manufacturers pass-through of additional, annual
$4,124,500 x o.59
$381.966.000 * 0.59
at 10%, 10 years
$ 39,109,757 x 1.5
$4,124,500 x 0.2152
$ 2,433,455
36,676,302
58,664,635
$ 97,774,392
887,592
3. Households
costs of registering new active ingredients
b. Manufacturers and formulators costs of reregistering
existing pesticides, amortized over 10 years at 10%
c. Wholesaler-retailer price spread on Items a & b
d. Total annual cost to industrial users
a. Manufacturers' pass-through of additional, annual
costs of registering new active ingredients
b. Manufacturers and formulators costs of reregistering
existing pesticides amortized over 10 years at 10%
c. Wholesaler-retailer price spread on items a & b
d. Total annual cost to household users
a. Manufacturers' pass-through of additional costs of
registering new active ingredients
b. Manufacturers and formulators costs of reregistering
existing pesticides amortized over 10 years at 10% '
c. Wholesaler-retailer price spread on items a & b
d. Total annual cost to government users
5. Total annual cost to all users
4. Government
$381,966,000 x 0.2152
at 10%, 10 years
$ 14,265,114-x 1.5
$4,124,500 x 0.1625
$381,966,000 x 0.1625
at 10%, 10 years
$10,771,752 x 1.5
$4,124,500 X 0.0291
$381,966,000 x 0.0291
at 10%, 10 years
» $1,928,972 x 1.0
13,377,522
21,397,671
$ 35,662,785
670,231
10,101,521
16.157.628
$ 26.929,380
120,023
1,808,949
1.928.972
$ 3,737,921
$164,104,478
-------
In summary, the annual user costs are estimated as follows:
Agricultural users $ 97,774,392
Industrial and institutional users 35,662,785
Household users 26,929,380
Government users 3,737,921
Total annual cost to users $164,104,478
IV. Economic Impacts of Additional Registration and Reregistration
Costs on Consumers
This analysis parallels that of Section XII, Part II of this report which
was concerned with the economic impacts on consumers resulting solely from
the incremental requirements of 1972 FIFRA as amended. However, here con-
sideration is limited to the economic impacts associated only with Section
3 registration requirements, but the costs include both those requirements
which are specifically incremental as a result of 1972 FIFRA as amended
plus industry estimates of "catch-up" costs necessary to update other tests
required for reregistration and to meet additional requirements imposed
since 1972.
Assuming that the incremental costs to the farmer resulting from the addit-
ional costs of registration and reregistration (above 1972 levels) are
passed forward through the marketing system, that fresh packers and pro-
cessors profits are maintained and that gross margins of wholesalers and
retailers are also maintained, then the impact on consumer food prices of
a $114,870,300 additional cost to agriculture would be approximately as
fol1ows:
1. Additional cost to agriculture $ 97,774,392
2. Plus packers' and processors' profits on sales
of 3 percent 2,933,232
3. Cost to wholesalers $100,707,524
4. Plus wholesalers margins on sales of 5 percent 5,035,376
5. Cost to retailers $105,742,900
6. Plus retailers' margins on sales of 20 percent 21,148,580
7. Equals total additional cost to consumers $126,891,480
association with registration and reregis-
tration of pesticides as required by Section
3, 1972 FIFRA as amended
The cost to consumers, shown above, does not include those direct house-
hold user costs estimated in Section III of this report to be $26,929,380.
In addition, .the consumer, as a taxpayer, will bear the increased costs to
government, $3,737,921. If these are added to these food-derived costs,
the total additional cost to consumers, arising from the additional annual
costs of registration and reregistration, becomes $157,558,781.
143
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V. Inflationary, Energy, Employment, Productivity and
Competition Impacts of Additional Costs of Registration
and Reregistrati on of Pesticides
The inflationary energy, employment and summary impacts resulting spe-
cifically from incremental requirements of 1972 FIFRA as amended were
discussed in Section XIII, Part II of this report. The general nature
of these impacts as related to additional "catch-up" costs of registration
and reregistrati on as discussed in Part III,.would be similar.
"One-time "Continuing
costs" costs"
(000)(000]
Costs associated with "catch-
up" costs required for regis- $381,966 $4,125 -
tration and reregistrati on
Energy impacts could be increased if, as a result of increased registration
and reregistrati on costs, a greater number of pesticides are dropped (not
reregistered) and greater dependence on mechanical controls, particularly
mechanical tillage in agriculture, is required.
If increased registration and reregistraiton costs lead to abandonment of
pesticides, then additional decreases in productivity would result as
farmers and industry are forced to resort to less efficient control systems.
Employment impacts would be increased, if as a result of product abandonment
due to increased registration costs, formulators restrict production or go
out of business entirely.
Competition would be reduced as smaller formulators would be impacted to a
greater relative extent than would be basic manufacturers or large formu-
lators.
144
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PART IV
SUMMARY - COSTS AND COST IMPACTS
The study has had as its primary objective the development of cost in-
creases which would result from the implementation of the requirements
of specific sections of 1972 FIFRA as amended.
An attempt was made to recognize those costs which are solely incre-
mental due to unique requirements of 1972 FIFRA as amended and also
those "update" costs, which would be incurred by industry in updating
product test data to meet pre-1972 FIFRA registration requirements.
Cost impacts were developed for:
1. The pesticide industry - Table 38
2. User groups - Table 39
a. agriculture
b. industry
c. households
d. government
3. Consumers - Table 40
A. Cost Impacts - Pesticide Industry
Table 38 summarizes the estimated cost impacts on the pesticides industry.
The industry is defined to include manufacturers, formulators, distributors
and dealers and applicators. Also included is an estimate of the value of
excess pesticides which might result from inability of farmers to apply
at "less-than-label" rates.
The major costs are associated with registration requirements. The incre-
mental test requirements due solely to the new tests required by 1972
FIFRA would add a one-time cost of $68.5 million to complete these tests on
all existing active ingredients and from then on an additional annual cost
(above pre-FIFRA requirements) of $1.6 million would result. However, 1972
FIFRA also requires reregistration of all currently registered active in-
gredients and formulations (35,500 in total). Although the cost of updating
these 35,500 product files to meet pre-1972 FIFRA test requirements is not
an incremental cost due to 1972 FIFRA, industry anticipates that this updat-
ing will result in a cost of $382 million to update all product files and
that an annual cost of $4.1 million above test requirements pre-1972, will
continue.
145
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Table 38. Summary, direct incremental 1972 FIFRA and "update" costs associated with the implementation
of specified sections of 1972 FIFRA as amended
1972
FIFRA
Sec.
3
4
5
7
8
9
12-G
19
Description
Registration of pesticides
Use of restricted pesticides
certified- applicators
Experimental use permits
Registration of establishments
Books and records
Inspection of establishments
Use of registered pesticide in a
manner inconsistent with its labeling
Disposal and transportation
Estimated 1972
FIFRA Incremental Costs.
One-time Annual
($000)
$ 68,525
45,168
-
-
-
-
_
-
($000)
$ 1 ,600
28,739
25,000
3,534
5,120
185
19,200
27,700
Estimated
Additional "update"
One-time Annual
($000)
$381,966
_
-
-
-
-
_
-
($000)
$4,124
-
-
-
-
-
-
-
Total
$113,693
$111,078
$381,966
$4,124
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Other major cost items are:
1. Applicator certification (Section 4)
a. $45 million one-time to train and certify 1.5 million
farmers as private applicators and 192,000 commercial
applicators.
b. $28.7 million annually to maintain applicator training and
to provide for monitoring and enforcement of the certification
requirements.
2. Experimental use permits (Section 5) - $25 million annually—due
to the increase in the number of permits, with accompanying testing
requirements, as federal and state agencies will be required to
get permits for extended field testing.
3. Inability to apply pesticides at "less-than-label" rates (Section
12-6). Estimated cost of $19.2 million due to excess amounts of
pesticides used above effective treatment requirements. No allow-
ance has been made for crop damage.
4. Disposal costs - $27.7 million (Section 19) - Due to new disposal
requirements of 1972 FIFRA as amended.
B. Cost Impacts - User Groups
Table 39 summarizes annual cost impacts on user groups due to direct in-
cremental requirements of 1972 FIFRA as amended and due to "update" costs
associated with registration.
One-time costs have been discounted to present values over a 10-year period
at 10 percent. Costs shown include both direct costs and dealer mark-ups or
margins which would Become a part of the price to the user.
Agriculture bears the greatest cost burden, accounting for over 60 percent
of the total user costs. Industry accounts for approximately 20 percent,
households 15 percent, government 4 percent and a small amount is unallocated.
The annual user costs which are projected as solely incremental to 1972
FIFRA ($165.4 million) were approximately equal to the costs associated
with other "update" registration requirements ($164.1 million).
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Table 39. Summary, annual cost impacts on user groups due to direct
incremental requirements of 1972 FIFRA and to "update"
costs of registration, 10-year period
User group
Agriculture
Industry
Households
Government
Total
Direct incremental
cost, 1972 FIFRA
($ millions/yr)
$105.5
32.1
24.2
3.6
$165.4
"Up-date" costs associ-
ated with registration
($ millions/yr)
$ 97.8
35.7
26.9
3.7
$164.1
Table 40. Summary, annual cost impacts on consumers due
to direct incremental requirements of 1972 FIFRA and to
"update" costs of registration
Consumer
Impact source
Direct incremental
cost, 1972 FIFRA
"Up-date" costs associ-
ated with registration
Consumer food prices
Direct household costs
Costs to government
Total consumer impact
($ millions/yr)
$136.9
24.2
3.6
$164.7
($ millions/yr)
$126.9
26.9
3.7
$157.5
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C. Cost Impacts - Consumers
Annual cost impacts on consumers due to direct incremental requirements
'of 1972 FIFRA and due to "update" costs associated with registration
are shown in Table 40.
The annual incremental costs ($164.7 million) are approximately equal to
the annual costs due to "update" registration requirements ($157.5
mi 11i on).
The major impact will be on food prices, over 80 percent of the total.
Direct costs to households make up approximately 16 percent and costs to
government—ultimately paid by the consumer as the taxpayer--make up the
balance.
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PART V
LIMITATIONS OF THE ANALYSIS
The analysis of the cost impacts of an act as complex as 1972 FIFRA as
amended is necessarily limited by lack of data and by the assumptions which
are required to compensate for such situations. In addition, the Act has
not been fully implemented and certain sections of the Act are being modi-
fied by proposals to change the basic legislation or by developments in
the guidelines and regulations designed to implement the Act. Further,
the regulations as proposed are, in themselves, subject to interpretation
by those charged with the responsibility for administering the Act.
In spite of these general limitations, it is necessary that an attempt
be made to estimate the cost impacts on the pesticide industry, on pesti-
cide users and on consumers which would be anticipated as a result-of the
implementation of 1972 FIFRA as amended.
A. Major Limitations
1. The analysis was limited to specified sections of 1972 FIFRA as
amended—those sections which would have direct cost impacts. Sections
analyzed included 3, 4, 5, 7, 8, 9, 12-G, 19 and 24-C. It is recognized
that other sections of the Act, for example Section 6, Administrative
Review; Suspension, can have cost impacts, but the incidence of such
impacts would result from specific actions, e.g. suspension of dieldrin
and aldrin, and such impacts must be considered on a case-by-case basis.
2. A major difference exists, in terms of cost impacts, between those re-
quirements of the act which are solely incremental to 1972 FIFRA as
amended and between those costs which represent actions not uniquely
required by 1972 FIFRA as amended and which were established by prior
legislation and/or regulation, but which now must be fully met in order
to comply with the total requirements of 1972 FIFRA as amended. This
problem was particularly important in considering impacts of Section 3 -
Registration and Reregistrati on. Although the "incremental require-
ments" due solely to 1972 FIFRA as amended can be identified and their
costs estimated, a greater problem exists in evaluating the "update or
catch-up" costs necessary to update product registration files to meet
total requirements for reregistering all active ingredients and formu-
lations by October 21, 1976 (or such date as may be specified) as re-
quired by Section 3. Those costs due solely to the incremental require-
ments of 1972 FIFRA as amended are estimated in Part II of this report;
additional "update or catch-up" costs required to update AI and formu-
lation files for reregistration, were developed from industry estimates
and are presented in Part III.
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3, The requirements for test data for registering and reregistering
both active ingredients (AI) and formulations will vary substantially
from pesticide to pesticide. 1972 FIFRA incremental requirements will
apply only to active ingredients and test requirements on which costs
were calculated were based on a sample of 660 registrations, out of
a total of 1,409 AI, including all AI with FDA tolerance. Require-
ments for "update" testing for reregistration of both AI and formu-
lation were based on contacts with pesticide manufacturers and formu-
lators and reflect their estimates of costs they would incur.
4. Costs of performing specific tests vary with the source of the testing
—private laboratories vs. "in-house", company testing, and allocation
of registration test costs as opposed to other laboratory functions
within company R&D programs could not be made with precision. For most
major tests, private laboratory test costs were used. In addition, a
10 percent addition was made to take into account the cost of pesticides
used and company administrative costs incurred in administering the
testing program and registration procedures.
5. Classification of pesticides by EPA into "restricted" or "general use"
categories was not complete when this analysis was made.
6. Estimates of Section 4 Applicator Certification costs were based on
cost estimates furnished by State agricultural extension services
(training) and State regulatory agencies (certification and monitoring/
enforcement) and reflect their judgment regarding the costs they antici-
pate. However, most of these states do not have approved programs in
place. The number of applicators to be certified was based on estimates
by EPA (farmers) plus estimates from industry trade associations of the
number of commercial applicators and the categories in which they would
be certified.
7. The cost impact of Section 5, Experimental Permits, was based on estim-
ates from EPA (number of experimental permits issued—now and in near
future), State Agricultural Experiment Stations and pesticide manu-
facturers. A key assumption made was that all extended field testing
done by State Experiment Stations and Extension Services (as opposed to
pure experimentation) would require experimental permits. The pro-
portion of pesticides field tested which would survive and be registered
was based on estimates by pesticide manufacturers and State Experiment
Stations as was the cost of testing required to get an experimental
permit.
8. Section 7 - Registration of Establishments and Section 8, Books and
Records. Estimates of the costs associated with producing and maintain-
ing the required pesticide reports and records were developed largely
from discussions with industry personnel responsible for administering
and maintaining these functions. Estimates of the number, types and
sizes .of firms and establishments were developed from information from
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EPA (number of firms and establishments), from industry trade associ-
ations and Census data (number of firms by type and size).
9. Section 9 - Inspection of Establishments. - Number of inspections and
samples taken were estimated by EPA. Escort costs and costs of re-
placing samples were based largely on information from industry sources,
10. Section 12-G, Application at Less-Than-Recommended Rates. Contacts
were made with Agricultural Experiment Stations and Agricultural Ex-
tension Services throughout the United States regarding (1) their
willingness to make recommendations for "less-than-label" rates and
(2) the existence of situations where such rates might apply. Estim-
ates were developed only for the costs of excess pesticides which
would be used if "less-than-label" rates could not be used. No allow-
ance was made for possible damage to growing or follow-on crops.
11. Section 19, Disposal. Estimates were developed by DPRA for disposal
costs for farmers. Contacts were made with commercial applicators to
develop a basis for estimates of disposal costs for this group.
Further contacts were made with pesticide manufacturers, formulators
and distributors to determine the amounts of pesticides disposed of
and estimates of disposal costs.
12. Estimates of relative amounts of pesticides used by agriculture, in-
dustry, households and government were obtained from published re-
search, mainly The Pesticide Review, ASCS, USDA, and Farmers Use of
Pesticides in 1971, ERS, USDA, Agricultural Economic Report No. 252.
These data were for 1971, but it is assumed that the relative im-
portance of pesticide use by each user group has remained approximately
the same.
13. Price spreads between pesticide manufacturers and farmers were calcu-
lated based on equivalent prices for major pesticides as reported by
the "Chemical Market Reporter" and "Agricultural Prices," ERS, USDA
for comparable time periods. These prices were checked with other
series and the price differential used appears realistic.
14. Because of the absence of applicable research data, assumptions were
made regarding the probability and the ability of industry and farmers
to pass costs forward to users and consumers. In general, it was
assumed that in the long-run, costs would be passed forward to users
and, insofar as pesticides represent inputs to consumer products, in-
creased pesticide costs would be passed forward to the consumer in the
form of higher product prices through normal marketing channels and
with the maintenance of normal marketing margins. In the case of
agricultural products, most of this cost transfer would be indirect,
through the supply function as farmers adjust production to cost-price
relationships.
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B. Validity of the Analysis
The assumptions and. limitations detailed above indicate the problems which
were encountered in making the estimates on which this analysis was based.
However, every effort was made to secure reliable data, to check such data
with more than one source, and to make assumptions which were logical and
realistic in terms of the requirements and costs associated with the
sections of 1972 FIFRA as amended which were studied in this project.
With these limitations, it is believed that the cost impacts shown are
realistic in terms of their nature, their direction and the general order
of magnitude indicated.
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