AGRI Committee Report

REGISTRATION OF PESTICIDES AND THE COMPETITIVENESS OF CANADIAN FARMERS

          INTRODUCTION

            The registration of agricultural pesticides has long been a source of concern for Canadian farmers. The Standing Committee on Agriculture and Agri-Food has held regular meetings on the subject over the past 10 years, both before and after the Pest Management Regulatory Agency (PMRA) was established.

It is very important to note that the concerns expressed by agricultural stakeholders have never focused on the PMRA’s scientific ability to protect human health and the environment, but rather on that part of its role designed to support the agricultural sector’s competitiveness. Before the PMRA was established, farmers already complained that they did not have access to the safe and effective products which their competitors were using. The revision of the pesticide registration system undertaken by a multidisciplinary group in the early 1990s subsequently led to the PMRA’s creation and consolidation under the jurisdiction of the Minister of Health.

             The creation of such an agency was a promising development for many agricultural stakeholders and there were high expectations that the registration process would improve. Witnesses continued however to express their frustrations before the Standing Committee, even after the PMRA was established in 1995. It was therefore no surprise that the Standing Committee was again asked to hold a series of meetings on the impact the pesticide registration process has on the competitiveness of Canadian farmers.

During the hearings many subjects were discussed and one theme constantly re-emerged: Canadian farmers, witnesses said, do not have access to the same safe and effective pest management tools used by their main competitors, particularly American producers.            Since international market conditions are already tough for Canadian farmers, this barrier affecting their ability to compete deserves careful consideration, particularly one that has lasted so long.

   PMRA’S TOUGH START

            In the late 1980s, the Honourable Don Mazankowski, then Minister of Agriculture, directed a task force to prepare recommendations to improve the federal pest management regulatory system. In December 1990, slightly more than a year and a half after receiving its mandate, the Pesticide Registration Review Team submitted its report. One central recommendation was the creation of the PMRA and the transfer of legislative authority from the Minister of Agriculture to the Minister of Health.

            In February 1992, the ministers of Agriculture, Environment, Forests and Health and Welfare announced a six-year plan to put in place a new federal pest management regulatory system, which was to have the following attributes:

• openness, including opportunity for public input,

• efficiency,

• adaptiveness and responsiveness,

• accountability and predictability,

• increased access to pest management strategies that reduce risk of harm to human health, safety and environment,

• support for the development of policies that assist economic viability/competitiveness of agriculture/forestry/fisheries/aquaculture,

• support for the development of sustainable systems that reduce, wherever possible, the need for the use of pest control products.¹

            In April 1995, the Pest Management Regulatory Agency was constituted as a branch of Health Canada. Responsibility was transferred from the Minister of Agriculture and Agri-Food to the Minister of Health by an Order in Council issued on 25 March 1995.²

            This was a major restructuring in accordance with the recommendations issued five years earlier by the Review Team, but, looking back now, one wonders whether the PMRA was not created at the wrong time. As one witness rightly emphasized when asked about the main barrier to the registration system’s effectiveness:

We think it is cumulative effect that goes right back to when the Agency was formed.

The agency was formed as a result of a federal review of the Pest Control Products Act, which is still actually the enabling legislation in place. Unfortunately, when the agency was formed, this town saw fit to download 20,000 people. The agency was very expedient from the previous way that pesticides were regulated, because they were regulated in about four other ministries. We suspect there were two goals at heart: to get the agency running, but also to hive the resources allocated to those personnel over onto the agency’s budget and off.

The agency says they are under funded. We don’t know. The agency says they need new legislation to do everything and be all things to all people. We question that because, at best, we feel that the legislation will be enabling legislation.³

            As a result of the PMRA’s many responsibilities, a number of which are complex, both scientific and analytical, and of the importance of its role in protecting human health and the environment, the Agency must not suffer from a lack of efficiency, openness or communication. Regardless of the cause — lack of funding, absence of an appropriate legislative framework or the fact that it was established in difficult conditions — the PMRA has not enjoyed the stability necessary to meet the expectations that many stakeholders had at its inception. There has, of course, been some noteworthy progress. In the first two years of the PMRA’s existence, backlogs for new products application⁴ have been eliminated. According to PMRA officials, considerable efforts have gone into the harmonization of reviews with the United States to facilitate simultaneous registration in both countries, and almost twice as many active ingredients are registered each year than under the old system (16 compared to 9). In addition, of the total number of new active ingredient registration submissions received and registered by the PMRA in 2000, five had no deficiencies. In the case of those submissions, the average time from submission to registration was 11 months. However, the period was 21 months for incomplete submissions. In the United States, by comparison, the shortest time for registration by the Environmental Protection Agency (EPA) was 22 months in 2000.⁵

            Although some statistics indicate that progress has been made in some of the PMRA’s activities, it should be noted that comparisons are being made with an old system which experienced more than its share of failures. Moreover, not everyone views progress made in the same way. For a bureaucrat, a 21-month period may be a measure of efficiency, but, for a farmer, waiting 21 months means two or even three harvests, during which he has not been able to use the same tools as his competitors. In a sector as competitive as agriculture, the delay may have a devastating long-term effect.

            Seven years after starting up, the PMRA has advanced the pesticide registration system, but farmers’ impatience and frustration persist and are symptomatic of a glitch in the Agency’s overall operation. Although difficult to ascertain with any accuracy, the problem does not appear unrelated to the many roles, some seemingly irreconcilable, played by the PMRA.

            Although it has not solved all its "growing" problems,
the PMRA is now facing a new challenge. The new Bill C-53, An Act to protect human health and safety and the environment by regulating products used for the control of pests, which has been introduced to update the 33-year-old Pest Control Products Act, would sanction the methods already been used by the PMRA. The bill is generally being well received by the agricultural community, but a legislative renewal is still a potential cause of disruption and adaptation. The new act would give members of the public access to detailed assessment reports and the right to seek reconsideration of a decision concerning the registration of a pesticide. This shows that the PMRA’s activities, which are already numerous and complex, could become even more so and further complicate its operation, with the result that it could lose sight of farmers’ needs.

            Considering the example of problems related to the approval of minor use pesticides, witnesses appearing before the Standing Committee maintain that an ombudsman could "facilitate" discussions and remind the PMRA that one of its roles is also to support the agricultural sector’s competitiveness. In that context, the Standing Committee welcomes the PMRA’s recent announcement that one will be appointed.⁶

            Details on the role and to whom the ombudsman will report are still vague. This is a situation that concerns the Standing Committee. We need to ensure that agricultural stakeholders can quickly settle their disputes with the PMRA where decisions are delayed or policies controversial. Consequently,

RECOMMENDATION 1 The Committee recommends that an ombudsperson, independent of the Pest Management Regulatory Agency and reporting directly to the Minister of Health Canada, be appointed to facilitate discussions on farmers’ various needs regarding pest control.

            Although it is not clear that the PMRA may have been under-financed to date, witnesses nevertheless reminded the Standing Committee that adequate funding was important.⁷ In that context, it is worth noting that net expenditures for pest management regulation have increased to $30.1 million in 2002-2003, up from $23.4 million in 2001-2002. Growth in full-time equivalents (FTEs) has also occurred, with the number of FTEs having risen to 439 in this fiscal year, compared to 388 in 2001-2002. According to Health Canada Report on Plans and Priorities: "the increase in net expenditures is mainly due to an initiative to strengthen the pest management regulatory systems". The members of the Standing Committee are aware of the growing challenges for the protection of human health and the environment and of the PMRA’s increasingly complex task of reconciling its mission with farmers’ needs. A scientific regulatory system must be stable in order to do effective work, and stability is often dependent on efficient use of government financial support. For that reason,

RECOMMENDATION 2 The Committee recommends that the Auditor General of Canada conduct a value-for-money, or performance auditing, to examine the management practices, controls and reporting systems of the Pest Management Regulatory Agency.

ACCESS TO MINOR USE OF PESTICIDES AND THE COMPETITIVENESS OF CANADIAN FARMERS

            The problems regarding registration of minor use pesticides and their impact on Canadian farmers’ ability to be competitive are themes that have dominated the Standing Committee’s meetings. A minor use pesticide is defined as a product whose use proves to be necessary, but whose low sales volume in a country are insufficient to convince a manufacturer to obtain the registration that would permit its sale.

            One of the sectors hardest hit by the situation is horticulture in Canada, which generates more than $4.2 billion in revenue a year, slightly more than 14% of total farm income. The sector is experiencing the highest growth rate in Canadian agriculture. Its production is highly diversified and includes more than 120 species and sub-species of fruits, vegetables and fine herbs, as well as flowers and ornamental plants. As the Canadian Federation of Agriculture emphasized to the Committee, farmers are increasingly involved in integrated pest management (IPM) programs which employ a set of pest management tools, in particular biological and crop management tools as well as physical and chemical means for optimizing IPM benefits and minimizing environmental risks.⁸

 

            Consumers, farmers and the environment are all winners when an IPM strategy is functional, but the Canadian system has experienced failures, and producers, consequently, have not always had access to the most effective pest management products. Not only does this undermine their competitiveness, but products still being used could be replaced by more environmentally friendly substitutes already in use in the United States.

We feel that the future of Canadian agriculture is in jeopardy, as we cannot continue to remain competitive under the current system. Our counterparts in the United States have access to and use products on fruits and vegetables exported to Canada that are not registered for use here.

It’s important to remember, when talking about competitiveness, that $3 of every $4 you and I and other Canadian consumers spend on fruits and vegetables are for imported products, most of which are from the United States.

The Canadian registration process for crop protection tools needs to be harmonized, so products submitted, evaluated and registered in the United States are also registered for use at the same time in Canada.⁹

            For a pest control products manufacturer, profitability is still a fundamental factor in its decision to register a product:

In terms of minor use, we did a pretty detailed analysis this summer and there is no question that for most of the minor uses, it’s not economic for a registrant to come in. (…) What can we do about it? I think that certainly with the analysis that we did — and really it may be a self-preservation instinct — we can’t solve this problem as a regulatory agency. We have to work collaboratively with the Department of Agriculture as well as with growers.¹⁰

            For a market to be functional, certain conditions must be met. In particular, there must be a product or service that can be exchanged and a sufficient number of buyers and sellers wishing to transact business, and the process must be perceived as fair. When certain conditions are not met, and the market is not profitable enough for a manufacturer to register a product, the government then has valid grounds to intervene, particularly where its intervention supports an economic activity which is already significant and viable, such as the horticultural sector in Canada. Since the PMRA, as a regulatory agency, cannot solve this problem, it is up to the Minister of Health to find the solutions that will provide farmers with the right pest management tools.

            This moreover is what the United States has done with its IR-4 program (Interregional Research Project No. 4). Also called the "minor use program", IR-4 is mainly funded by the U.S. Department of Agriculture (USDA) and aims to achieve joint action between farmers, scientists and specialized agricultural production organizations to generate the necessary data for approval of minor use pest control products which U.S. producers need. This approach greatly enhances the broader product access which American producers can enjoy. U.S. minor crop production, the main use to which minor use pesticides are put, is estimated at U.S. $40 billion. In 2000, the U.S. Environmental Protection Agency (EPA) approved new pesticides and new uses for existing pesticides. U.S. producers had access to 901 new uses for minor crops. In Canada, only 24 products have been approved since March 2000.¹¹

            Even though the PMRA and EPA share certain information from the IR-4 program, some additional, Canada-specific data is still needed to complete approval submissions. The Canadian Adaptation and Rural Development Fund has been providing $400,000 a year for a minor use pesticide program to help the sector conduct research and analyses. The four-year program is to terminate in 2002-2003. By comparison, the U.S. IR-4 program receives funding of more than $15 million a year.¹²

           To maintain farmers’ competitiveness through access to effective, more environmentally friendly pest control products, Canadian government intervention therefore appears imperative, particularly where not all the market conditions have been met and where the economic stakes warrant it. Therefore,

RECOMMENDATION 3 The Committee recommends that Agriculture and Agri-Food Canada provide at least $1 million a year in funding for a research and analysis program, similar to the U.S. IR-4, that will be developed in cooperation with agricultural stakeholders to generate, or complete, the necessary data for the approval of new minor use products or to expand the use of previously approved products.

            If conducted seriously, such a research program means a significant degree of interaction with new stakeholders, both Canadian and foreign. It therefore appears essential that a team coordinate activities pertaining to minor use pesticides. Furthermore, as these activities face a regulatory framework in which decisions and policies often take time, to the detriment of farmers’ needs, it seems equally essential that a facilitator or advisor have the power to intervene specifically on matters pertaining to minor use pesticides. Whether in extending the use profile for minor uses or for a minor use approval program at the request of users, or discussions for greater harmonization with the United States, it seems that the efforts made in Canada are not yielding a satisfactory and quick solution for the users of minor use products. Consequently,

RECOMMENDATION 4 The Committee recommends that an advisor on matters pertaining to minor use pest control products be appointed to intervene in decisions and policies to facilitate activities relating to minor use products. The advisor’s mandate should include a special focus on the harmonization issues with the United States, such as the equivalency of similar zone maps, and the consideration of data that already exist in an OECD country. The advisor should report to the Ministers of Healthand Agriculture and Agri-Food.

CONCLUSION

            The pest control regulatory system is at a crossroads. Over the years, lengthy discussions and attempts to improve the system have not always met the expectations of many stakeholders. Farmers in particular have had their fair share of frustrations. After 33 years, the Pest Control Products Act is now being revised, but certain PMRA activities closely related to agriculture are not included in the proposed reform. In making these recommendations, the Standing Committee believes that the time is now right to correct certain major inequities in the system which have all too long undermined the competitiveness of Canadian farmers.

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1    Pesticide Registration Review Team, Recommendations for a Revised Federal Pest Management Regulatory
      System,  Government of Canada, Ottawa, December 1990, p. 5.

2    House of Commons, Standing Committee on Environment and Sustainable Development, Pesticides — Making the Right
      Choice for the Protection of Health and the Environment, 2nd Session, 36th Parliament, May 2000, p. 10.

3    House of Commons, Standing Committee on Agriculture and Agri-Food, Evidence, 1st Session, 37th Parliament, meeting
      no. 35-09:45, Mr. Jeff Wilson of the Ontario Fruit and Vegetable Growers Association, Tuesday, November 27, 2001.

4    House of Commons, Standing Committee on Agriculture and Agri-Food, Evidence, 1st Session, 37th Parliament, meeting
      no. 43-09:40, Dr. Claire Franklin, Executive Director, PMRA, Thursday, February 7, 2002.

5    PMRA, Presentation by the PMRA to the Standing Committee on Agriculture and Agri-Food, Ottawa,
      7 February 2002.

6    Source: Western Producer, Pesticide Ombudsman Very Good News, 21 March 2002, citing a PMRA
      representative, who made this statement to delegates at an annual meeting of the Canadian Horticultural
      Council in Kelowna, B.C., on 8 March 2002.

7    CropLife, Presentation to the House of Commons Standing Committee on Agriculture
      and Agri-Food, Ottawa, 5 February 2002, p. 1.

8    Canadian Federation of Agriculture, Presentation of the CFA to the Standing
      Committee on Agriculture, 5 February 2002, p. 4.

9    House of Commons, Standing Committee on Agriculture and Agri-Food, Evidence, 1st Session,
      37th Parliament, meeting no. 41-09:45, Ms. Anne Fowlie, Vice-President, Canadian Horticultural
      Council, Tuesday, 5 February 2002.

10  House of Commons, Standing Committee on Agriculture and Agri-Food, Evidence, 1st Session,
      37th Parliament, meeting no. 43-10:10, Dr. Claire Franklin, Executive Director, PMRA, Thursday, 7
       February 2002.

11  House of Commons, Standing Committee on Agriculture and Agri-Food, Evidence, 1st Session,
      37th Parliament, meeting no. 41-09:45, Ms. Anne Fowlie, Executive Vice-President, Canadian Horticultural
      Council, Tuesday, 5 February 2002.

12  Canadian Horticultural Council, Crop Protection – A Better Future for Canada, Ottawa, 26 November 2001, p. 19.