An Economic Analysis of GRDC Investment in Minor Use Chemicals
An Economic Analysis of GRDC Investment in Minor Use Chemicals An Economic Analysis of GRDC Investment in Minor Use Chemicals
1. Introduction Participants in the grain industry covering 25 leviable crops have a continuing need to access a wider range of chemicals for crop protection. Increasing inputs of chemicals for control of diseases, pests and weeds have been a major contributor to productivity gains and to more sustainable rotations based on a diversified mix of crops. During the 1990s there had been rapid expansion in areas of canola, other oilseeds and of pulse crops. There was also an increasing diversity of pest and disease problems. With manufacturers concentrating on major markets for pesticides there are many minor uses that need to be accommodated within the evolving regulatory framework. This impact study covers six projects funded in sequence from 1998 to 2010 to meet needs identified for improved access to chemicals for minor uses. A more regulated approach to chemical use in Australian agriculture had its origins in a trade crisis in 1987. Detection of organochloride residues in export beef precipitated action. Regulation was based on State and National coordination and incorporated cost recovery. The first comprehensive grain industry project arose from a review by Pulse Australia which identified that growers of pulses had limited access to the pesticides needed for sustainable production. The capacity of the industry to meet objectives in terms of responsible use of registered pesticides and achieving quality assurance (QA) for their grain products were of increasing concern. Later projects were expanded to cover all grain crops where there were unmet priority needs for pesticides that could be met by minor use or emergency permits issued by APVMA (Australian Pesticides and Veterinary Medicines Authority, previously NRA, the National Registration Authority). In this report pesticides and chemicals are used as general terms which include chemicals with specific uses, particularly insecticides for control of invertebrate pests, weedicides or herbicides, desiccants and fungicides. Permits are based on risk assessments where “risk has the meaning of the likelihood of harm in the circumstances of its use.” As APVMA (2008) stated “In general, minor crops are those where the costs involved in generating data (for example on residues, efficacy, environmental and worker safety data) for registration of a minor use are not recouped from the market”. Minor uses are administered using off-label permits for a use not on the label. Permits are for a specified duration and lead in some cases to extension of labels to cater for new uses or to renewal of the permit. During 2009/10 broadacre crops accounted for 10 percent of the minor use permits issued (APVMA, 2010). Minor uses can be for crops other than defined major crops, or for minor use in major crops (See Section 3). Offlabel permit approvals are generally restricted to those products that: • are already registered, • have existing toxicological and environmental data packages, and • relevant data on residues and efficacy can be obtained or estimated with some confidence. Products from the Australian grain industry have an enviable reputation for quality with respect to chemical residues. The National Residue Survey (NRS) provides an active monitoring program for domestic and export grain commodities. Monitoring of commodities for compliance with the MRL (maximum residue levels) indicates whether a product has been used according to an approved label and use pattern. _________________________________________________________________ Agtrans Research Page 6
There are changes in the operating environment of the grain industry which increase the need to cater for minor uses by ensuring there are a wider range of options available. These include: • a more demanding regulatory environment contributing to concentration by manufacturers and suppliers of agricultural chemicals on fewer chemicals serving larger markets to achieve a return on increasing development costs, and • a reluctance by manufacturers to fund applied research that would support extension of the coverage of existing generic products to similar uses. There are remaining substantial differences between States despite ongoing efforts to harmonise the regulatory environment. In Victoria, it is legal to use chemicals (other than specified ‘restricted use’ chemicals) off-label providing that: • the maximum label rate is not exceeded, • the label frequency of application is not exceeded, and • any specific label statements prohibiting the use are complied with. Whilst the Victorian system is seen to have advantages by placing greater onus on the user, there are other views that it increases risks of inappropriate use and residue breaches. Consultation is progressing on implementing a more efficient national framework for more harmonised regulation of agricultural and veterinary chemicals. The consultation included strengthening feedback from stakeholders on priorities and options. Recent GRDC MUP have included monitoring developments in the USA approach to minor use pesticides. Their inter-regional IR-4 project which began in 1963 is a cooperative effort involving state and federal agencies aiming to develop data to facilitate regulatory clearances of newer, reduced risk pest control products for specialty crop growers (Miller, 2007). A new regulatory pathway, additional to minor use permits, has recently been developed with APVMA to facilitate access for a wider range of uses including major crops. Advisers and growers now have an opportunity to directly influence label recommendations by identifying and suggesting new uses or modifications to existing registrations (GRDC, 2010a). The availability of a wider range of options will be of benefit to farmers, for example, in helping to manage emerging resistance problems or to comply with MRLs. Gaining regulatory approval has industry benefits by avoiding undesirable consequences, for example prejudicing trade by violation of MRL residue levels in grain, and in grain and crops used for feed for meat and dairy animals. Undesirable consequences are avoided by reducing incentives to use hazardous chemicals not registered for a specific purpose. The consequences include the risks relating to the following six aspects which are part of the information required by APVMA to register a chemical and to satisfy industry and community concerns on their safety: • Occupational Health and Safety • Human Toxicology • Crop Safety • Environment • Residues • Trade _________________________________________________________________ Agtrans Research Page 7
- Page 1 and 2: GRDC Impact Assessment Report Serie
- Page 3 and 4: Impact Assessment: An Economic Anal
- Page 5: losses that had been incurred, for
- Page 9 and 10: Table 2: Project Codes, Titles and
- Page 11 and 12: Details of current and expired perm
- Page 13 and 14: 4. Outcomes The previous section de
- Page 15 and 16: grouped by examples of the range of
- Page 17 and 18: VOC data for diseases are only avai
- Page 19 and 20: Environmental Social increased avai
- Page 21 and 22: 2. Would the investments still have
- Page 23 and 24: chickpeas has grown at a rapid rate
- Page 25 and 26: “The following structural shortco
- Page 27 and 28: 1. the increasing availability of v
- Page 29 and 30: There is a limit to the area of chi
- Page 31 and 32: Summary of Assumptions A summary of
- Page 33 and 34: Table 17: Contribution of the Sourc
- Page 35 and 36: The benefits assessed in this evalu
- Page 37 and 38: Ted Knights, Senior Research Scient
- Page 39: ___________________________________
There are changes <strong>in</strong> the operat<strong>in</strong>g environment <strong>of</strong> the gra<strong>in</strong> <strong>in</strong>dustry which <strong>in</strong>crease<br />
the need to cater for m<strong>in</strong>or uses by ensur<strong>in</strong>g there are a wider range <strong>of</strong> options<br />
available. These <strong>in</strong>clude:<br />
• a more demand<strong>in</strong>g regulatory environment contribut<strong>in</strong>g to concentration by<br />
manufacturers and suppliers <strong>of</strong> agricultural chemicals on fewer chemicals<br />
serv<strong>in</strong>g larger markets to achieve a return on <strong>in</strong>creas<strong>in</strong>g development costs,<br />
and<br />
• a reluctance by manufacturers to fund applied research that would support<br />
extension <strong>of</strong> the coverage <strong>of</strong> exist<strong>in</strong>g generic products to similar uses.<br />
There are rema<strong>in</strong><strong>in</strong>g substantial differences between States despite ongo<strong>in</strong>g efforts<br />
to harmonise the regulatory environment. In Victoria, it is legal to use chemicals<br />
(other than specified ‘restricted use’ chemicals) <strong>of</strong>f-label provid<strong>in</strong>g that:<br />
• the maximum label rate is not exceeded,<br />
• the label frequency <strong>of</strong> application is not exceeded, and<br />
• any specific label statements prohibit<strong>in</strong>g the use are complied with.<br />
Whilst the Victorian system is seen to have advantages by plac<strong>in</strong>g greater onus on<br />
the user, there are other views that it <strong>in</strong>creases risks <strong>of</strong> <strong>in</strong>appropriate use and<br />
residue breaches.<br />
Consultation is progress<strong>in</strong>g on implement<strong>in</strong>g a more efficient national framework for<br />
more harmonised regulation <strong>of</strong> agricultural and veter<strong>in</strong>ary chemicals. The<br />
consultation <strong>in</strong>cluded strengthen<strong>in</strong>g feedback from stakeholders on priorities and<br />
options. Recent <strong>GRDC</strong> MUP have <strong>in</strong>cluded monitor<strong>in</strong>g developments <strong>in</strong> the USA<br />
approach to m<strong>in</strong>or use pesticides. Their <strong>in</strong>ter-regional IR-4 project which began <strong>in</strong><br />
1963 is a cooperative effort <strong>in</strong>volv<strong>in</strong>g state and federal agencies aim<strong>in</strong>g to develop<br />
data to facilitate regulatory clearances <strong>of</strong> newer, reduced risk pest control products<br />
for specialty crop growers (Miller, 2007).<br />
A new regulatory pathway, additional to m<strong>in</strong>or use permits, has recently been<br />
developed with APVMA to facilitate access for a wider range <strong>of</strong> uses <strong>in</strong>clud<strong>in</strong>g major<br />
crops. Advisers and growers now have an opportunity to directly <strong>in</strong>fluence label<br />
recommendations by identify<strong>in</strong>g and suggest<strong>in</strong>g new uses or modifications to exist<strong>in</strong>g<br />
registrations (<strong>GRDC</strong>, 2010a). The availability <strong>of</strong> a wider range <strong>of</strong> options will be <strong>of</strong><br />
benefit to farmers, for example, <strong>in</strong> help<strong>in</strong>g to manage emerg<strong>in</strong>g resistance problems<br />
or to comply with MRLs.<br />
Ga<strong>in</strong><strong>in</strong>g regulatory approval has <strong>in</strong>dustry benefits by avoid<strong>in</strong>g undesirable<br />
consequences, for example prejudic<strong>in</strong>g trade by violation <strong>of</strong> MRL residue levels <strong>in</strong><br />
gra<strong>in</strong>, and <strong>in</strong> gra<strong>in</strong> and crops used for feed for meat and dairy animals. Undesirable<br />
consequences are avoided by reduc<strong>in</strong>g <strong>in</strong>centives to use hazardous chemicals not<br />
registered for a specific purpose. The consequences <strong>in</strong>clude the risks relat<strong>in</strong>g to the<br />
follow<strong>in</strong>g six aspects which are part <strong>of</strong> the <strong>in</strong>formation required by APVMA to register<br />
a chemical and to satisfy <strong>in</strong>dustry and community concerns on their safety:<br />
• Occupational Health and Safety<br />
• Human Toxicology<br />
• Crop Safety<br />
• Environment<br />
• Residues<br />
• Trade<br />
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