Growers association says pesticide manufacturers gouge Ontario farmers

Wednesday, May 22, 2013

by SUSAN MANN

Pesticide manufacturers are gouging Ontario farmers to the tune of $22 million a year in additional crop protection product costs compared to American producers, says Craig Hunter of the Ontario Fruit and Vegetable Growers Association.

Hunter, the association’s crop protection and minor use specialist, says he isn’t surprised by the price differential but he is upset. “Growers have done their level best to lobby to get our pesticide regulatory system working better.” While the workings of the system has improved compared to 10 years ago and changes to reduce costs and time for product registrations have been implemented, “all the benefits for that have accrued to the companies. They haven’t passed along any savings to us,” he explains.

The companies “will not face the reality that they’ve been gouging,” Hunter charges.

Pierre Petelle, vice president chemistry for CropLife Canada, which represents pesticide and plant biotechnology manufacturers, says as a trade association they can’t get involved in a detailed discussion about pricing.

But looking at registrations of new products during the past few years, there have been a number of generic products introduced in Canada. “We’ve now got a very vibrant generic industry in Canada” along with a very vibrant innovator segment, he says.

Bringing new technology to growers is pesticide industry’s focus

The manufacturers’ key focus has been bringing new technologies to growers, especially for small market products used in the fruit and vegetable sector. “The business case isn’t always there to bring those new technologies to Canada because it’s a small market,” Petelle says.

More than 80 per cent of the new active ingredients registered in Canada today are done through global joint reviews with multiple countries or through work sharing arrangements with the United States. “This means that Canada, with its relatively small market, gets the same new products as much larger markets,” he says.

The growers association says in a May 21 press release it came up with the price differential using data from the 2012 University of Guelph Ridgetown Campus survey of average prices comparing agricultural inputs in Ontario and the United States. The price comparison included fuel, fertilizer and 28 crop protection products. The association also used the provincial agriculture ministry’s 2008 pesticide use survey. The survey is done every five years and a new one is to be done this year.

Surveys reveal price discrepancy

He says the 28 products that the Ridgetown survey followed represent about 85 per cent by volume of the total crop protection products Ontario farmers use. The remaining 15 per cent “is made up of more than 200 other products, including some with prices up to seven times higher in Canada than in the United States,” the association’s release says.

Three of the 28 products followed in the Ridgetown survey are cheaper in Ontario compared to the United States. All of the others are more expensive.

Hunter says last year one grower imported for use on his farm a product costing seven times more in Ontario than in the United States and saved $30,000. “He could have bought a pickup truck to drive the product home with,” says Hunter, who declined to name the farmer, the product or the company making it.  

Niagara-on-the-Lake grape grower Ray Duc, the association’s chair, says he knew there were product price differences but he is startled by how much more Ontario growers are paying.

Ontario farmers must compete in the North American marketplace and while they have other costs that are also higher just “that one cost is making us less competitive,” he says. And Ontario growers can’t pass their higher costs on to consumers because they are price takers. It’s similar to a minimum wage increase, he says. If that cost goes up growers have to “eat it.”

Is a North American label the solution?

Duc says they’d like to see a North American label for pest control products. The costs for registering products in Canada is a lot higher compared to the United States because of the smaller market here. “If we had a North American label with North American standards as far as residues and rates and everything then there would be one market for North America.” That would result in savings to the company because products wouldn’t need to go through two separate registration processes and hopefully the money companies saved “would be passed on to the grower.”

Hunter explains there are only 11 products with a North American label now “out of thousands of labels.” Companies aren’t willing to make lots of North American labels because it’s more costly and time consuming in Canada than in the United States to change the label or source the active ingredient from a different manufacturer.

Changes to pesticide acquisition program proposed

Hunter says other measures that could help mitigate the price gap include expanding and softening the rules of the grower requested own use (GROU) program.

This program, administered by Health Canada’s Pest Management Regulatory Agency (PMRA), enables Canadian farmers to import and use foreign versions of Canadian registered products, according to Health Canada’s website. PMRA is the federal regulator of pesticides.

Hunter says PMRA has told them their resources only allow the agency to review 15 applications of products a year. If they’re approved for inclusion in the program, the products are only on the list for importation for two years but the association wants that increased to five years.

There are a lot more products that are overpriced in Canada “that we’d like to get on the list but there’s no room. We have found that once things get on the list that the prices start to come back in line,” he explains. BF