Testimony of

William Hawks

Under Secretary

Marketing & Regulatory Programs

U.S. Department of Agriculture

Before The

Subcommittee on Production and Price Competitiveness

U.S. Senate Agriculture, Nutrition and Forestry Committee

July 18, 2002

Good afternoon Mr. Chairman and members of the Subcommittee. Thank you for the opportunity to appear before you to discuss pesticide harmonization and its potential impact on American farmers. The United States Department of Agriculture (USDA) welcomes this opportunity to fulfill its role as the advocate of the American producer within the Administration.

As you know, although the Environmental Protection Agency (EPA) is the lead agency for pesticide regulation, USDA has been concerned with the issue of pesticide harmonization for some time. Although important strides have been made in harmonization of registration procedures for new pesticides, harmonization for older pesticides has not been matched. USDA supports efforts to facilitate harmonized pesticide registrations so that our farmers will have equitable and economical access to safe and effective agricultural chemicals.

The Department of Agriculture is very interested in proposals that offer to improve the competitiveness of American growers in domestic and world markets. While recognizing there are many factors that can contribute to differential prices between markets, some of which include marketing strategies, market size and demand, we are also aware that structural differences in the regulatory and legal systems may have a real impact on these issues.

Before serving in my current position as Under Secretary of Marketing and Regulatory Programs, I grew corn and soybeans in Northern Mississippi. As a farmer, I often times commented that I could compete with any farmer in the world, but I couldn't compete with foreign governments and regulations. Now, as Under Secretary, I want to break down barriers to create a level playing field for U.S. producers while continuing to protect public health and the environment.

USDA supports EPA's efforts to harmonize pesticide registrations as a means to promote the economic well being of American farmers. In 1999, USDA commissioned a study to document pesticide availability and pricing between the U.S. and Canada. This report showed that prices for some pesticides are lower in North Dakota, while other pesticides have lower prices in Manitoba. The study also reported that pesticides accounted for only 10-18% of the overall cost of production for the four other crops studied on both sides of the U.S./Canada border. The report identified many factors affecting pricing on either side of the border including: differences in patent protection length; differences in market size and costs; differences in pesticide demand; and differences in the number of substitute products available.

The Department has been an active participant in the North American Free Trade Agreement (NAFTA) Technical Working Group on Pesticides, and we will continue to work with EPA and the United States Trade Representative (USTR) through the Consultative Committee on Agriculture to resolve trade issues related to pesticide harmonization.

Thank you for the opportunity to address this issue on behalf of American producers. We look forward to working with Congress and stakeholders to achieve pesticide harmonization with Canada, and to eliminate arbitrary differences that impact pricing and availability.