STATEMENT OF

THE AMERICAN FARM BUREAU FEDERATION

TO THE

SENATE AGRICULTURE, NUTRITION AND FORESTRY

PRODUCTION AND PRICE COMPETITIVENESS SUBCOMMITTEE

REGARDING

THE PESTICIDE HARMONIZATION ACT, S. 532

Presented by

Barry Bushue

President

Oregon Farm Bureau Federation

July 18, 2002

Good morning Mr. Chairman and committee members. I am Barry Bushue a farmer from Boring, Oregon, where I operate a family nursery stock and berry operation. I am also the president of Oregon Farm Bureau and a member of the board of directors of the American Farm Bureau Federation. I am testifying today on behalf of the American Farm Bureau Federation.

Farm Bureau is the nation's largest farmer and rancher organization with over 5.1 million member families in all 50 states and Puerto Rico. As you know Mr. Chairman, farmers and ranchers in all 50 states have been facing some rather hard times these past few years. These difficult times have forced those of us in production agriculture to take a closer look at our bottom line and attempt to do whatever we can to reduce any unneeded costs and hopefully realize a profit, or simply break even. This has been hard to achieve in recent years. This examination has exposed a number of increasing costs that farmers are now voicing concern about and attempting to mitigate. Such expenditures include ever increasing environmental regulation costs, labor costs, energy costs and agricultural chemical costs, which is what we want to focus on today.

Let me begin by saying that Farm Bureau strongly supports S. 532, the Pesticide Harmonization Act, sponsored by Senator Dorgan.

This legislation will allow farmers, cooperatives and farm supply stores access to lower-priced Canadian agricultural chemicals that are identical or "substantially similar" to those sold in the United States. The high cost of some pesticides in the U.S. is contributing to the current farm crisis by inflating agricultural producer input costs. Producers in other nations, such as Canada, use pesticides substantially similar in content to those used in the U.S., but the foreign products are often less expensive. Under current law, U.S. producers cannot import those pesticides from other nations.

We farm in a global market. Our competitors are not just down the road but around the world. To remain competitive and hopefully profitable, we must constantly search for ways to reduce our production costs. From the producer's point of view, there is a price disparity among some agricultural chemicals in the U.S. and Canada that impedes our competitiveness and profitability. We believe that this legislation will work to remove that disparity.

Under the Pesticide Harmonization Act, states could petition the Environmental Protection Agency to issue pesticide labels that can be placed on Canadian products when the only "significant difference" between the products is the price. The U.S. product label would allow our farmers to buy the Canadian pesticide for use on their farms in the U.S.

Farm Bureau believes this legislation is a significant step toward achieving the goals of gaining access to affordable and needed products for U.S. farmers while at the same time maintaining U.S. standards designed to protect consumers, farmers and the environment. Farmers in this country need a level playing field to compete with foreign growers and having equal access to less expensive crop protection materials will improve the competitive position of U.S. producers.

Studies have been conducted on cost differences by USDA and others, and the results demonstrate that similar compounds used on both sides of the border can be priced differently. Sometimes these price differences are significant. Senator Baucus has stated that recent surveys have found that U.S. farmers can pay as much as 117 percent to 193 percent more than farmers in Canada for virtually the same product. A USDA study puts this in perspective by stating that "although pesticide expenditures are not high for the study crops in the Canadian/U.S. prairie area compared with some crops and areas, they are relatively high compared with per acre profits. A few dollars of extra cost can make the difference between a profitable and an unprofitable year."

The American Farm Bureau and the Canadian wheat pools have sponsored producer meetings for the last three years. This effort has resulted in forming the Canada/U.S. Producer Consultative Committee on Grain. These exchanges have resulted in the identification of issues that are important to grain producers in Canada and the United States. We reached consensus that harmonization of pesticide registration and labeling was desirable. If we can solve this trade or border irritant, perhaps we can solve other issues.

I applaud EPA's efforts to work with our international trading partners to promote consistency in the various regulatory and scientific requirements regarding pesticides, such as the work being conducted with the Technical Working Group for Pesticides developed under NAFTA. However, while the administration's actions are helpful, they have not resolved the issue.

Farm Bureau does understand that because pesticides must be registered in the U.S. before they can be sold and distributed, there are certain limits on EPA's involvement in this issue. But EPA must continue to work within current authorities to find solutions.

We were pleased to hear the statement of EPA Assistant Administrator Steve Johnson during his confirmation hearing regarding the need for legislation to address this problem and I quote: "I believe that legislation is needed because there does not appear to be adequate administrative or regulatory solutions."

Thank you Mr. Chairman and committee members for the opportunity to comment. I'll be happy to address any questions you may have for me following the testimony of the other panelists.

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