Senator Byron L. Dorgan
Statement Submitted for the Record
Thursday, July 18, 2002
Agriculture Subcommittee on Production and Price Competitiveness
Hearing on S. 532, the Pesticide Harmonization Act
I would like to thank Chairman Conrad for holding this hearing on S. 532, the Pesticide Harmonization Act, here in the Agriculture Subcommittee on Production and Price Competitiveness. This is legislation that Senator Burns and I introduced, and is cosponsored by Senators Baucus, Cleland, Clinton, Conrad, Crapo, Daschle, Dayton, Johnson and Levin. I should also note that Congressman Pomeroy has introduced similar legislation in the House of Representatives.
I find it fitting that this hearing takes place in a subcommittee titled "Production & Price Competitiveness." Why? Because, if enacted, S. 532 would eliminate a competitive edge that Canadian farmers currently enjoy when compared to United States farmers. S. 532 would amend the Federal Insecticide, Fungicide, and Rodenticide Act to permit a state to register a Canadian pesticide for distribution and use within that state if the pesticide is substantially similar or identical to one already registered in the United States.
We drafted S. 532 because United States farmers pay significantly higher prices than Canadian farmers for essentially the same pesticides, often made by the same company or an affiliate. The price difference in many cases is more than the farmer will make in a year, and can often cause a loss to be posted for the year.
With margins this slim, farmers constantly search for ways to cut costs, and Congress could help them in this if it were to pass S. 532.
I have some examples of these price differences that I want to bring to the attention of the subcommittee. The first example concerns the pesticide, Liberty, which is a selective use herbicide used on canola, corn, soybeans and sugar beets. Liberty is sold in boxes such as this one. A box like this would contain two 2-1/2 gallon jugs of the pesticide.
In the United States, Liberty costs approximately $90 per gallon, or about $450 for the 5 gallons that would come in this box. In Canada, those same 5 gallons cost about $165 US, after converting liters to gallons and accounting for the currency exchange.
Let me repeat, if a farmer buys this box of Liberty in Canada, he pays $165. But, if he buys it in the United States, the price jumps to $450. The United States farmer is asked to shell out an additional $285 just because he is in the United States! To elaborate further on the cost discrimination our farmers must operate with, the labeled rate of Liberty varies from 20 to 34 ounces per acre, depending on what crop or weed is being sprayed. This translates into a price difference of $9 to $15 per acre!
This is simply not acceptable, and is especially repugnant to farmers when they come to realize the Liberty sold in the United States is the same as that sold in Canada, and made by the same company.
The second example of price difference deals with Folicur, a fungicide used to treat wheat and durum for Fusarium Head Blight, more commonly referred to as Scab. For instance, here=s a box that contained two 2-1/2 gallon jugs of Folicur. This particular box was purchased in Canada during the 2000 crop by a United States farmer, who was able to bring it across because the pesticide did have a United States label attached to it. However, it should be noted that it also had a Canadian label.
There is quite an interesting story behind this box of Folicur. Apparently, a shortage of this fungicide occurred in Canada during the 2000 growing season, prompting the manufacturer, Bayer, to transfer some of their United States inventory of Folicur up into Canada. Once across the border, Bayer simply put the Canadian label on the Folicur box, and left the United States label on the 2-1/2 gallon jugs located inside the box.
You can easily see the Canadian label attached to the box, right here. And as you can see, here also is the United States label still on the empty jug located inside the box. The reason I am pointing out the obvious is this: Besides gaining another label when the box crossed the border into Canada, this box also had a magical change in value B the price suddenly decreased by over $500.
So, we have one box of Folicur, two separate labels, along with two very different prices. Once again, let me emphasize, the Canadian farmers paid $500 less than a United States farmer - for literally the very same pesticide that was being sold a few miles south.
I could go on, but the story is the same for other products with varying degrees of price differences. The North Dakota Department of Agriculture is submitting documentation today from a study their pesticide division conducted that estimates the price disparities are costing North Dakota farmers alone over $24 million this year for the most widely used pesticides. While this is better than the previous year's estimate of over $32 million, it is still too much of a difference. If this cost difference is spread nation-wide, it is easy to see that this is a very serious handicap for United States producers.
Beyond the price issue, I also want to emphasize that care has been taken not to pose a safety risk to the environment or the public's health. We worked closely with the EPA when drafting this legislation, taking advice from them to make sure the use of the various pesticides affected by this legislation would continue to take place in a safe manner
EPA testified last year in a hearing I conducted in my Commerce Subcommittee hearing on S. 532 that the legislation posed no safety risk to the environment or public's health. I believe they will testify to this today as well.
In closing, let me say that family farmers in North Dakota and across the country are asking Congress to pass this legislation so that they can more readily compete with their Canadian counterparts. It makes little sense to force United States producers to use more expensive versions of the very same or substantially similar products, often manufactured by the very same companies or affiliates.
Chairman Conrad, I want to thank you once again for holding this hearing. I believe this hearing will be instrumental getting this problem rectified for family farmers across this country.