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6. Pesticide Innovation and the Economic Effects of Implementing the Delaney Clause
Pages 136-160

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From page 136...
... This chapter examines the innovation process and seeks to determine whether the Delaney Clause has had or will have an impact on it. This chapter also assesses the status of pest control innovation in major areas such as plant breeding, genetic engineering, and biological, cultural, and chemical pest control.
From page 137...
... THE INNOVATION PROCESS AND THE PESTICIDE INDUSTRY The pesticide innovation process involves finding and developing new compounds that are effective and safe, improving formulations of older compounds, expanding uses of older compounds to more crops and pests, and satisfying regulatory data requirements. The pesticide innovation cycle goes beyond industry's discovery of new compounds.
From page 138...
... About 23,000 new compounds are now screened for each new pesticide discovered; 10 years ago the figure was 10,000.i It is not surprising that the pesticide industry devotes large sums of money to research. Multinational agrichemical companies spend from 9 to 15 percent of sales revenue on R&D.2 Most R&D in pesticide and pharmaceutical companies is internally financed and conducted.
From page 139...
... The four studies indicate how regulatory delay and uncertainty affect R&D activities. The CAST study found that from 1968 to 1978, direct costs of bringing a new pesticide to market increased; delays from discovery to first registration grew; and R&D expenditures shifted from synthesis, screening, and field testing to registration, environmental testing, and residue analysis.3 The OTA report emphasized that total pesticide R&D expenditures continued to rise following the 1972 amendments to the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
From page 140...
... The research directors viewed the Delaney Clause as an important regulation. They identified other problems such as groundwater contamination as more serious, however.
From page 141...
... Most pesticide R&D in the United States takes place at about 20 multinational corporations that manufacture active ingredients for pesticides. Hundreds of middle-sized and small companies develop, produce, TABLE 6-1 Pesticide Industry Total R&D Expenditures Annual Undeflated Deflateda Increase Year (millions of dollars)
From page 142...
... Regulatory actions based on chronic health and environmental effects have largely eliminated all uses of organochlorine insecticides on foods. Organophosphate and carbamate insecticides remain widely used; synthetic pyrethroids continue to gain market share.
From page 143...
... 143 oo _I _' ¢ _1 so a' ._ ._ Cal Ct .s Cal = a' so 50 Cal ._ or U
From page 144...
... Possible regulatory actions restricting the use of these herbicides could create opportunities for new herbicides or other weed control methods. FUNGICIDES The unique case of fungicides has been discussed at length in Chapters 3-5.
From page 145...
... These factors give existing products a formidable competitive edge over new fungicidal compounds. Yet, it is in dealing with fungicides that a strict application of the Delaney Clause may most significantly affect current product use.
From page 146...
... Cotton pest control research is inspired more by potential pest resistance than by the Delaney Clause. Currently available non-oncogenic cotton insecticides and integrated pest management programs appear adequate to sustain the U.S.
From page 147...
... Ten herbicides were tested for weed control in soybeans: three for broadleaf weeds and seven for grasses (see Table 6-41. Here again, variability precluded a valid assessment of their effectiveness compared with that of the best commercially available standard.
From page 148...
... Early and late blight Early blight Late blight Anthracnose Bacterial speck Bacterial spot Black rot Buckeye rot Early blight Rhizoctonia Root knot nematode Verticillium wilt Apple Fungicidesa Peanut Fungicides Potato Fungicides Tomato FungicidesC 4 4 8 0 o 7 o 2 o 3 3 5 0 9 4 2 o 0 3 0 O O o 0 2 aNine fungicides were evaluated, some against more than one pest. bSummer diseases include bitter rot, black rot, white rot, sooty blotch, fly speck, brooks spot, and black pox.
From page 149...
... The committee believes that the EPA's implementation of the Delaney Clause could affect future profits and R&D investment byTABLE 6-6 Current Status of Pesticides and Available Alternatives Alternatives for Major Industry Classes of Pest Pesticide R&D Estimated Type of Sales Expenditures Oncogenic Risk Chemicals Pesticide (%)
From page 150...
... · Increasing costs for required test data to support tolerances for registration or reregistration; · Shortening the commercial lives of pesticides through tolerance revocations or product cancellations; · Increasing the borrowing costs when tests and other procedures prolong the time from discovery to marketing; and · Increasing net return variability and thereby discouraging investment because of uncertainty about EPA implementation strategies. INNOVATION PROSPECTS IN PEST CONTROL Plant Breeding Although plant breeding for resistance to pests began in the late nineteenth century, the development of crop varieties resistant to insect pests was not pursued energetically until recently.
From page 151...
... Success in crop breeding includes disease resistance of corn to southern corn leaf blight and other blights, wheat to stem rust, cucurbits to powdery mildew, cotton to Fusarium wilt, alfalfa to bacterial wilt, pears to fire blight, tobacco to bacterial wilt, and sugarcane to mosaic disease. Resistant cultivars have also been the major means of controlling parasitic nematodes, especially some species of root-knot, cyst-causing, and stem nematodes.
From page 152...
... Developments in pest control for minor crops from genetic engineering and conventional plant breeding are not likely to come soon enough to replace the many potential pesticide use cancellations in the next three to five years. Private genetic engineering firms will probably produce animal drugs and herbicide-resistant cultivars of major crops rather than alternative pest controls for those canceled by the Delaney Clause.
From page 153...
... In many cases biological control methods have been integrated with selective use of chemical pesticides. For example, the release and establishment of predatory mites biologically controls spider mites on almonds in some areas of California.
From page 154...
... Research on the biological control of plant diseases is increasing so rapidly that the American Phytopathological Society will soon start publishing a journal devoted to that topic. Cultural Pest Control Cultural pest control involves manipulation of the crop or soil to make it less favorable for pests.
From page 155...
... ; relative value of the crop per unit area; susceptibility of the crop to pest damage throughout the season; and availability of nonpesticide controls. Production of most minor crops typically requires several pesticides.
From page 156...
... Department of Agriculture's Cooperative State Research Service InterRegional Project 4 (IR-41. JR-4 provides a mechanism for state agricultural research and extension workers to identify specific pesticides that will meet particular needs on minor crops.
From page 157...
... listing crops for which the EPA requires processing studies or in the National Food Processors Association's list of proposed additions to Subsection O (see Table 3-131. If the number of minor crops listed in Subsection O is expanded, the effects of the Delaney Clause will become proportionately larger.
From page 158...
... A major feature of resistance management in crop diseases is the mixing of eradicant site-specific fungicides with older, protectant fungicides. Such mixtures combined with fungicide rotation help prevent resistance.


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