ECONOMIC ANALYSIS OF THE EXPANSION

OF THE CROP GROUPING PROGRAM

Prepared by:

BIOLOGICAL AND ECONOMIC ANALYSIS DIVISION

OFFICE OF PESTICIDE PROGRAMS

September 6, 2007

U.S. Environmental Protection Agency

1200 Pennsylvania Ave, NW

Washington, DC 20640

 

I	Summary

This is a burden-reducing regulation.  Crop grouping saves money by
permitting the results of pesticide exposure studies for one crop to be
applied to other, similar crops.  The regulation exploits this
opportunity for saving money by expanding certain crop groups to include
more crops.  

The primary beneficiaries of this regulation are minor crop producers
and consumers.  Minor crop producers benefit because lower registration
costs encourage more products to be registered on minor crops, providing
additional tools for pest control.  Consumers benefit by having a larger
supply of imported and domestically produced specialty produce at
potentially lower costs.  Secondary beneficiaries are pesticide
registrants, who benefit because expanded markets for pesticide products
lead to increased sales.  The IR-4 Project and EPA, which are publicly
funded federal government entities, more efficiently use resources as a
result of the rule.  The EPA benefits from broader operational
efficiency gains, which result from fewer emergency pesticide use
requests from specialty crop growers, the ability to conduct risk
assessment based on crop grouping, greater ease of establishing import
tolerances, greater capacity to assess risks of pesticides used on crops
not grown in the US, further harmonization of crop classification and
nomenclature, harmonized commodity import and export standards, and
increased potential for resource sharing between EPA and other pesticide
regulatory agencies.  Revisions to the crop grouping program result in
no appreciable costs or negative impacts to consumers, specialty crop
producers, pesticide registrants, the environment, or human health.  

The impacts of the rule are measured primarily on a qualitative basis. 
The efficiency gains experienced by the IR-4 are quantified in terms of
the cost of registering new uses under the old crop grouping program
versus the new program.  

II	Background to the Final Rule

EPA is revising its crop grouping rule contained in 40 CFR part 180.40
and 180.41.  In this revision, EPA is expanding the crop grouping
program to include several minor crops (both domestically produced and
imported) that are not currently included in crop groups and subgroups,
and establishing new crop groups.  This rule represents the first group
in a series of amendments and changes to the crop grouping program.  The
Agency anticipates that future proposals of revisions to the crop
grouping program will become routine expansions as additional
appropriate changes are identified.  

Statutory Authority:  EPA derives its statutory authority to establish
tolerances for pesticide residues in agricultural commodities under
section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) (21
U.S.C. 346a). A tolerance is the maximum permissible residue level
established for pesticides in raw agricultural produce and processed
foods.  The crop grouping regulations currently in 40 CFR 180.40 and
180.41 enable EPA to establish tolerances for a group of crops based on
residue data for crops that are representative of the group. The crop
grouping concept leads to the establishment of maximum residue levels
that could occur on any crop within the group.  

Tolerance Setting:  Under section 408 of the Federal Food, Drug and
Cosmetic Act, EPA is responsible for establishing tolerances for
pesticide chemical residues in agricultural commodities.  A tolerance is
the maximum permissible pesticide residue level established for
pesticides in raw agricultural produce and processed foods.  To
establish a tolerance a petition is submitted to the Agency, requesting
the tolerance and furnishing information on the chemical identity,
composition, use pattern, toxicity, and nature and magnitude of the
residue of the proposed use.  EPA uses these data to determine the
appropriate tolerance level. 

Crop Groups:  EPA regulations enable the establishment of tolerances for
a group of crops based on residue data for designated crops that are
representative of the group, e.g., root and tuber vegetables crop group
and the representative crops carrot, potato, radish, and sugar beet. 
Crops are grouped based on similarities in cultural production
practices, edible food portions and animal feed items, residue levels,
geographical locations, and pest problems.  Representative crops have
the highest residues or are the most economically important in the
group.  Crop grouping allows for the estimate of the maximum level of
residue that could occur on any crop within the group.  The minimum data
base required for a group tolerance consists of residue on all
representative commodities for a group.  Once the group tolerance is
established, the tolerance level generally applies to all agricultural
commodities in the group.  

Crop groups, in their current state, were established by EPA in 1995
along with crop subgroups, which are smaller more closely related groups
of commodities within a crop group with similar growth characteristics
and residue potential.  Representative commodities are also established
for subgroups.  The old crop grouping program has 19 Crop Groups and 18
Crop Subgroups (See Markle, Baron, and Schneider, 1998, pages 332-336)  
However, since the establishment of these crop groupings in 1995, the
U.S. population has become more diverse, and demand for certain ethnic
foods that are not in crop groups has increased.  Growers of specialty
crops, striving to meet these demands, have requested more sub-grouping
options to meet the needs of changing markets. There is also a growing
international need for harmonizing crop groupings as the benefits of
work sharing become more apparent.

Need for Federal Regulation:  Pesticides are important products that
play a significant role in many aspects of the economy.  They are used
by diverse economic sectors such as agriculture, industry, and
residential.  Pesticides reduce or eliminate undesirable weeds, insects,
animals, fungi, and bacteria and are used to preserve wood and regulate
plant growth.  All of these pesticide uses produce desirable outcomes
such as increased agricultural productivity and improved human health. 
However, due to their nature, their use also implies some environmental
and health risks (U.S. EPA, 1999c).  These risks are often external to
the market.  For this reason, the use of pesticides in the U.S. is
regulated to insure that their use does not lead to unacceptable risks
to the environment, applicators, and consumers of treated commodities. 
The purpose of the rule is to reduce the burden of these pesticide
regulations on specialty crop producers and consumers.  

III	Profile of affected Parties

	

IR-4, pesticide registrants, EPA, and specialty crop producers and
consumers will be affected by the rule.  The following provides a
profile of these parties and describes their involvement in establishing
or reliance on pesticide tolerances for specialty crops.   

Interregional Research Project #4:  The following provides information
on the IR-4 Project.  Information used in this section was provided
primarily by IR-4 (IR-4, 2006b and IR-4, 2006c).   

The IR-4 Project’s mission is to provide safe and effective pest
management options for specialty crop growers.  Their focus has
historically been to facilitate the registration of conventional crop
protection chemicals on fruits, vegetables, herbs and nuts.   More
recently IR-4 has incorporated nursery, floral, forestry seedling,
Christmas trees, and turf grass crops into their conventional
crop-protection-chemical program, and have added a biopesticide program.


The IR-4 Project is needed because there are insufficient financial
incentives for the agrochemical industry to invest in registering their
products for low use specialty crops.  Additionally, there are potential
liability issues from crop injury in low acreage, high value crops that
may create larger unfavorable risk-reward relationships for registrants.
 The IR-4 Project develops the data to support these registrations.  In
doing so, the IR-4 Project helps to improve the international
competitiveness of US agriculture. As the agrochemical industry
continues to undergo worldwide consolidation, the resources devoted to
specialty crops and minor uses continue to diminish (EPA, 2004). This
makes the role of the IR-4 increasingly critical for maintaining
effective pest control options for specialty crop producers.

The IR-4 Project operates as a partnership between the land grant
university system and the USDA. The headquarters staff, including the
Executive Director, is located at Rutgers University.  The USDA
Agricultural Research Service management is located in Beltsville,
Maryland, and the four regional staffs (each with a Regional Director)
are located at Cornell University at Geneva, Michigan State University,
the University of California at Davis, and the University of Florida. 
Integration of activities is generally supplied through the IR-4
headquarters.  Long-term policy, coordination and integration are
provided by the IR-4 Management Committee with input and oversight from
the Administrative Advisers.

The IR-4 research planning process involves input from its partners and
stakeholders.  Most proposals for IR-4 assistance are transmitted from
growers through federal and state research and extension scientists
involved in high value specialty crop pest management.  IR-4 also
receives proposals (called Project Clearance Requests) directly from
growers and organizations representing commodity producers.  To maximize
grower awareness of the program and their input, IR-4 personnel
regularly attend grower meetings and tours.  In some cases, state level
IR-4 meetings are held and growers attend and submit Project Clearance
Requests.  The only group prohibited from submitting requests are
representatives of pesticide registrants.  Potential projects are,
however, submitted to registrants to determine their willingness to
accept public data to register uses.  The registrant can require that
efficacy trials be conducted to add a pest to the label where a
tolerance is obtained through the crop grouping process, or when data is
limited on pests for new pesticides.  Efficacy trials may be requested
by the registrant to reduce liability concerns due to product failure.  

Project proposals approved by registrants are then prioritized at the
annual IR-4 Food Use and Ornamentals Workshops.  These workshops are
important because IR-4 can only conduct research on 10-15% of the
proposed researchable projects each year.   These Workshops are open
forums each attended by up to 200 growers, commodity organization
representatives, and federal and state research/extension scientists. At
the workshops, every potential project is discussed in detail and its
importance is considered on the basis of such factors as the
availability and efficacy of alternatives, pest damage potential,
performance of the proposed chemical, and its compatibility with
integrated pest management programs.

 

The output of these meetings is a list of projects designated as having
A, B or C priority, or as being eliminated from the research project
list.   In order to better serve growers, IR-4 attempts to complete
projects classified as “A” within a 30 month time frame.  Before
setting this goal, most studies had taken 4-5 years to complete. The
current success rate of this program is 70%.  IR-4 also conducts
research on as many Priority B projects as possible.  However, due to
resource limitations, currently less than 25% of Priority B projects are
researched and none from the Priority C list of projects.

 

Following Workshops where priority lists are established, a National
Research Planning Meeting is held to assign field and laboratory sites
for each research project for the coming year. About 100 food use
residue projects (crop-chemical combinations) involving 700 field trials
are typically undertaken annually.

For approved projects, a research protocol is drafted which contains the
proposed pattern of use, the number and location of field trials and
instructions for the analysis of the chemical and metabolites in the
commodity as specified by EPA.   EPA requires that this research be
conducted and documented following procedures outlined in the Good
Laboratory Practices guidelines.

 

IR-4 has 31 field research centers throughout the United States. They
also have a network of four regional, three ARS and two satellite
laboratories where analytical laboratory work is conducted to determine
crop residue levels.  All data from IR-4 sponsored studies are
transferred from the field sites or analytical laboratories to the IR-4
Headquarters where the data are placed into petition format required for
submission to EPA.  The data are also reviewed by the registrant.  Once
complete, the petition is submitted to EPA.

 

IR-4 also conducts an average of 600 efficacy trials for ornamentals
prioritized at the Ornamental Horticulture Workshop.  For non-food
crops, the research and registration process is much simpler and less
costly because field residue trials for supporting tolerances are not
required. Registrants can add ornamental crops and pests to their
registration once they are satisfied that the use is safe to the
ornamental plants and the chemical is effective against the target
pests.

Pesticide Registrants:  Pesticide registrants develop, produce,
formulate, package, distribute, and sell pesticide products.  Pesticide
products themselves fall into several categories: conventional
pesticides, biochemical pesticides, plant incorporated pesticides,
specialty and niche pesticides, and antimicrobial pesticides. 
Conventional pesticides are those products that are commonly available
to users including herbicides (weed killers), insecticides (“bug”
killers), and fungicides (fungus killers), as well as some special
classifications such as fumigants used to sterilize soil to remove
pathogens.  

Pesticide production involves combining substances into a formulation. 
The most important ingredient of a pesticide product is the active
ingredient:  the chemical that is toxic to the targeted pest.  Some
pesticide formulations contain more than one active ingredient.  EPA
regulates both active ingredients and formulations through a
registration process.   There are roughly 890 active ingredients
registered with EPA, and nearly 18,000 registered products.  

Manufacturers of pesticide active ingredients ship their products either
in raw form or as formulated product, with the majority being shipped to
distributors and dealers as formulated products.  A small amount of
active ingredient is shipped to independent formulators for further
preparation.  Distributors and dealers receive the product in a packaged
form ready for sale to end users.

 

While many economic sectors consume pesticide products, the agricultural
sector is by far the largest conventional pesticide user.  Pesticide
products support agricultural production of crops under varied weather
and pest pressure.  Pesticide products are more readily available for
crops grown on a large scale such as field corn and soybeans.  

Specialty crops comprise nearly half of the value of agricultural
production in the U.S. (see below description of specialty crop
producers), yet there are often insufficient financial incentives for
pesticide registrants to invest in registering their products for
specific low acreage specialty crops.  There are also potential
liability issues from crop injury in low-acreage high-value crops that
may create unfavorable risk-reward relationships for registrants.  For
this reason, there can be hesitance on the part of pesticide registrants
to act to establish pesticide uses on specialty crops.  

Potential IR-4 projects are submitted to registrants to determine their
activity or willingness to accept IR-4 data to establish new uses. 
Thus, all IR-4 projects must first be cleared by registrants before
being reviewed and prioritized by IR-4.  If the registrants support the
projects they will submit necessary support data (such as environmental
and toxicological data) to the EPA and IR-4 will conduct the residue
trials and submit tolerance petitions.  Registrants will also be
involved in the IR-4 process by reviewing IR-4 study protocols,
providing test substances and analytical methods, drafting labels, and
reviewing IR-4 tolerance petitions.  Sometimes a registrant will support
IR-4 trials with some funding or will conduct analytical work.

U.S. EPA, Office of Pesticide Programs:  The EPA Office of Pesticide
Programs (OPP) is responsible for approving new pesticide uses and
processing tolerance petitions.  This process primarily involves EPA
scientists in the Office of Pesticide Programs conducting a
comprehensive review of the IR-4 residue and supporting registrant
toxicology data.   If the data show that the use would not expose
consumers or the environment to unreasonable adverse effects and there
exists a reasonable certainty that no harm will result to humans from
aggregate exposure to a pesticide from dietary and other sources, EPA
publishes a tolerance as a final rule in the Federal Register.  The
tolerance is the amount of the agricultural chemical in or on the crop
that is considered safe and legally acceptable.  The Agency’s process
of setting tolerances is as follows:

OPP receives a tolerance petition and residue chemistry data.  The
Agency screens the data to determine if it is in compliance with its
standards.  

Once data passes the screen, OPP will issue a MRID tracking number for
each volume of data and make a copy of the data for OPP records.  

With the MRID number assigned, OPP will begin the registration process. 
Appropriate data are forwarded to the Health Effects Division (HED) and
the Environmental Fate and Effects Division (EFED) for review.  

HED reviews residue chemistry data and conducts required human health
risk assessments.  

EFED estimates anticipated exposure to drinking water that will result
from the proposed use and provides HED with these estimates for use in
the HED aggregate risk assessment.  

Once the aggregate risk assessment is complete, if it is determined that
risk resulting from the pesticide is acceptable, the Agency drafts a
Federal Register Notice to establish tolerances.  

Once drafted, HED and the Office of General Council (OGC) review the
document.  Changes are made based on HED and OGC reviews, which may
involve additional refinement of the risk assessment conducted by HED.  

The Agency uploads supporting documentation to the public docket for
public viewing on the Internet.  A Federal Register Notice is then sent
for typesetting, signature, and publication.

 

OPP time required for tolerance petition review and establishment of new
tolerances will vary.  Typically review times for residue chemistry data
depend upon the use under consideration.  Whether the crop is grown in
one region or throughout the United States will determine how many field
trials will need to be conducted and the extent of the data.  EPA’s
residue chemistry guidelines provide this information on a per crop
basis.

Assessment of crop groups compared to a single crop may take longer
since the reviewer would have to input each commodity into the model. 
However, the difference would be a matter of hours, not days (Madden,
2006). Therefore, besides the small time difference in reviewing residue
chemistry data, there is little difference in the time required to
conduct risk assessment of a single crop versus a crop group. 
Additionally, if a crop group contains more representative crops, it
will require additional time when compared to a crop group with fewer
representative crops.  

Upon EPA approval of the petition, the pesticide product’s new use
site and specific directions for use must be added to the label by the
registrant.  The product may be made available for national use, or be
confined to a limited geographical region.

Specialty Crop Producers:  Specialty crops, also called minor use crops,
are generally defined in the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA) as any crop grown on 300,000 acres or less (EPA,
1997, page 15).  The USDA uses a broader classification which includes
most vegetables, fruit, nuts, herbs, spices, nursery, landscape plants,
greenhouse and flowers. Almost all food crops are minor use crops except
for the large acreage crops like corn, soybeans, wheat, oats, rice and
cotton.   According to USDA’s 2002 Census of Agriculture, specialty
crops account for over $43 billion dollars in annual sales, which is
about forty-six percent of the total agricultural sales for the US
(USDA, 2002).  Despite their large portion of agricultural sales,
specialty crops account for only about 3% of U.S. harvested cropland. 

According to USDA, about three-fourths of specialty crop growers are
considered specialized, meaning that they receive at least half of their
farm revenue from production of fruits, vegetables, tree nuts, and
horticultural crops.  Specialized farms account for 95% of the total
value of U.S. specialty crop production, although more than half of them
have annual sales of less than $250,000 and non-farm income as their
primary means of support (USDA, 2006). 

Consumers:  Consumers refers to the U.S. population.  Specialty crops
are a significant portion of the U.S. diet.  USDA estimates that
domestic consumption of fruit and vegetables accounted for about 17
percent of all at-home food expenditures in 2004. During the same
period, Americans spent an average of $224 per person ($561 per average
household) on fresh and processed fruit and vegetables consumed at home.
Many specialty crops consumed in the U.S. are imported.

The USDA estimates that per capita domestic consumption of fruits and
vegetables has risen over the past 20 years.  There has also been an
increase in consumer demand for fresh fruits and vegetables over this
same time period.  USDA explains these changes in U.S. consumption
patterns by noting that, “a population increasingly characterized by
households with fewer children and more adults in the workforce has been
supplemented by a surge in immigration from Latin America and Asia.
Shifts in consumer eating habits resulting from population changes have
influenced wholesale changes in the types of attributes consumers seek
with regard to fruit and vegetables” (USDA, 2006, page 12). 
Consumption of specialty crops is expected to increase as the U.S.
population becomes increasingly diverse.  

IV	The Process of Expanding Crop Groups

The following describes how changes to the crop grouping program were
developed and evaluated.  Information describing this process was
provided primarily to the Agency by IR-4 (IR-4, 2006c).  

The International Crop Grouping Consulting Committee (ICGCC), led by
USDA IR-4 and composed of over 180 crop, agrichemical and regulatory
experts representing over 30 countries, initiates and leads the process
of creating new or amending existing crop groups by accepting and
reviewing crop group proposals from stakeholders. The IR-4 forwards the
proposal for a particular crop group to the appropriate workgroup of the
ICGCC and requests that workgroup members review and validate crop
group, subgroup, definition and commodities (including adding or
deleting commodities), verify commodity names, provide commodity
information including cultural, nutritional, and medicinal information,
and provide Maximum Residue Level (MRL) information on specific
commodities. Growers and commodity experts provide valuable input on
commodities. International members provide specific information on the
commodities grown in their countries and regions.  The proposal is also
forwarded to the IR-4 EPA Crop Grouping Working Group.  Based on the
discussion and information provided by the workgroup and the IR-4 EPA
Crop Grouping Working Group members, monographs are created for each of
the new commodities, or updates of existing monographs are prepared
along with information tables for crop group comparison. The group also
makes MRL comparison with Codex and European Union (EU) crop
classifications, and world production data on the relevant commodities.

The information and data described above is analyzed and discussed with
ICGCC work group members (includes U.S., North American Free Trade
Agreement (NAFTA), CODEX, and EU) to provide input on crop information
on the commodities. Based on the input the ICGCC prepares commodity
monographs, divide subgroups and selects representative crops.  After
all input has been validated and incorporated in the draft petition, the
petition is submitted to EPA for consideration.  Changes to the crop
grouping program outlined in the rule were a portion of those changes
initiated at the USDA IR-4 Crop Grouping Symposium in Arlington, VA,
October 2002 (USDA, 2002b).  

IV	Expansion of Crop Groupings 

The following provides a summary of the revisions for the Bulb
Vegetables Group and the Berries Group, both of which are modified by
the rule.  A description of the Edible Fungi Group is also provided
below.  This is a new crop group initiated by the rule.  The below
changes and additions to the crop grouping program were developed using
the above described process.   A detailed description of the changes are
provided in the text of the rule.

Crop Group 3: Bulb Vegetable Group:  EPA adds two crop subgroups to crop
group 3: bulb vegetable group.  EPA changes the name of the
representative commodities for the crop group by designating onion, bulb
and onion, green as the representative commodity. The representative
commodities for the group are currently listed as onion, green and onion
dry bulb.  EPA expands the crop group from seven to twenty-five
commodities.

Crop Group 13: Berry and Small Fruit Group:  EPA changes the name of the
“crop group 13: berries group to “crop group 13: berry and small
fruit group.”  EPA adds six new subgroups to crop group 13.  EPA
revises the representative crops from crop group 13 from “any one
blackberry or any one raspberry; and blueberry’, to “any one
blackberry or any one raspberry; highbush blueberry; lowbush blueberry;
elderberry or mulberry; grape; fuzzy kiwifruit; and strawberry’.  EPA
revises the existing crop group commodities.  EPA expands the crop group
to forty-six commodities.  EPA revises the caneberry subgroup 13A
commodities and expands the bushberry subgroup 13B by adding 13
additional commodities for a total of nineteen.

 

New Crop Group 21: Edible Fungi Group:  EPA initiates a new crop group,
entitled edible fungi; as crop group 21 and includes in this crop group
20 commodities in 12 fungi families.  EPA defines the representative
commodities for the edible fungi group as: “white button mushrooms and
any one oyster mushroom or any one shiitake mushroom.”

V	Economic Analysis

Approach to the Economic Analysis:  The expansion of the Agency’s crop
grouping program will significantly reduce the burden of pesticide
regulation for obtaining pesticide uses for specialty crops.  The
components of the impact of the rule that are evaluated in this
assessment are the beneficial impacts on minor crop growers and
consumers.  Consideration is also given to the secondary benefits that
accrue to pesticide registrants, which arise from expanded markets for
their pesticide products.  Operational efficiency gains are experienced
by EPA and IR-4 and are described.  The impacts of the rule are measured
primarily on a qualitative basis, though IR-4 efficiency gains are
quantified in terms of the cost of registering new uses under the old
crop grouping program versus the new program.  

The impacts of the rule are analyzed by comparing specialty crop
pesticide availability under the old crop grouping program to the
program in the rule.  The impacts of the changes are considered
individually for each of the effected entities.  The impacts of the
expansion of crop group 3, bulb vegetables, and the new edible fungi
crop group, group 21, are used to illustrate the potential impacts of
the rule.  Consideration is also given for full adoption of the crop
grouping program developed by the International Crop Grouping Consulting
Committee, initiated at USDA/IR-4 Crop Grouping Symposium.

Costs and Negative Impacts of the Rule:  The Agency anticipates that
revisions to the crop grouping program result in no appreciable costs or
negative impacts to consumers, specialty crop producers, pesticide
registrants, the environment, or human health.  

While this rule increases the number of pesticides with tolerances for
minor crops, it does not necessarily increase the amount of pesticides
released into the environment and may result in the use of safer
pesticides.  This is because changes to the crop grouping program
broadens the choice of pesticides for specialty crop producers and makes
newer safer pesticides available.  It is also likely that growers have a
greater ability to use integrated pest management systems that could
reduce environmental damage resulting from the use of pesticides.

Revisions to the crop grouping program maintain EPA standards for
protecting human health.  Representative crops for groups and subgroups
are chosen on the basis that they have the highest residues in the
group.  For this reason, risk assessments conducted for crop groups are
as conservative and comprehensive as risk assessments conducted for
individual crops.

Impact of the Rule for IR-4:  The rule increases the efficiency of the
IR-4 program.  IR-4 establishes tolerances for more crops with the same
residue trials, administrative process, and laboratory effort.

Under the old crop grouping program, IR-4 establishes a tolerance for a
single chemical crop combination by conducting the number of residue
trials specified in EPA guidance.  For a single chemical use on a crop,
between 1 and 20 residue trials are required (see EPA, 1996, page 54 for
specific requirements).  The average number of residue trials required
for a typical IR-4 chemical crop combination registration is 3 (IR-4,
2006c).  The average cost per trial is $300,000 and the average cost of
a typical IR-4 registration is $900,000  

To establish a crop group tolerance, IR-4 conducts the specified number
of field trials (between 9 and 60 residue trials are required, depending
on the crop group, see EPA, 1996, page 57).  Typically, when residue
trials are conducted as part of a crop group request, there is a 25%
reduction in the number of trials.  Thus, to establish a use on bulb
onion, 8 trials are required.  Since bulb onion is a representative crop
for crop group 3, only 6 bulb onion trials (along with 3 green onion
trials) are required if trials are being conducted as part of a request
to establish a crop group tolerance.  IR-4 must also expend laboratory
and administrative resources in processing data collected in Residue
trials and administering the program.  IR-4 strives to establish crop or
crop group tolerances in a 30 month timeframe and accomplishes this for
70% of its research.  

Changes to the crop grouping program in the rule increase the number of
crops covered by crop group tolerances.  Though the number of additional
covered crops varies by crop group, efficiency gains from the rule are
extensive.  They include the benefit of tolerances that are established
without the burden of the cost of residue trials, the 30 month
administrative process, and use of laboratory and analytical resources. 
These efficiency gains are described in more detail in the sections that
consider the bulb vegetable crop group and new edible fungi crop group. 
  

Impact of the Rule for EPA:  The EPA more efficiently uses the resources
it devotes to review tolerance petitions for specialty crop
registrations.  This includes personnel and resources used to guide
tolerance petitions through the registration process, and scientific
review process.  Under the new crop grouping program, the Agency
utilizes a similar level of resources to review tolerance petitions, but
can establish a greater number of tolerances for specialty crops.

Broader operational efficiency gains are also likely to accrue to the
Agency.  It is anticipated that crop grouping changes in the rule
facilitate risk assessments based on crop grouping, increase the ease of
establishing import tolerances, facilitate the risk assessment of
pesticides used on crops not grown in the US, promote harmonization in
crop classification and nomenclature, harmonize commodity import and
export standards, increase the potential for resource sharing between
EPA and other pesticide regulatory agencies, and reduce the need to
process emergency pesticide use requests on specialty crops under
Section 18 of FIFRA.

Benefits of the Rule for Specialty Crop Producers:  Changes to the crop
grouping program provide new safer pesticides to agricultural producers.
 The greater availability of pesticides to specialty crop producers
enhance IPM programs, decrease the probability of pest resistance by
providing more pest control tools, give more pesticide choices for
related crops grown in close proximity, and reduce the chance of
inadvertent residues on crops grown in close proximity, e.g., mustard
greens and kale.

Benefits of the Rule for Consumers:  The changes to the crop grouping
program lead to a more reliable and abundant supply of specialty
produce, including imports.  The rule promotes a safe food supply
through better pest control.  The rule promotes diversity in produce
available in the U.S.  

Benefits of the Rule for Pesticide Registrants:  The primary benefits to
pesticide registrants of the changes to the crop grouping program are
additional sales of their pesticide products.  This occurs because of
wider availability of registered pesticides due to expanded and new crop
groups.  Pesticide registrants are required to add crop sites to the
label.  This is a potential burden of the rule, but requires minimal
effort on the part of the registrant and can be done at their choosing. 

Companies may require or perform efficacy tests on all the crops in a
group or subgroup before they include them on pesticide labels.  This
may be needed if there are concerns about efficacy or phytotoxicity of
the pesticide on a given use site. Efficacy trials cost approximately
$4,200 and take one growing season to complete (Hong, 2006).  Crop
groups can be created that exclude certain crops, which may allow
registrants to minimize their efficacy data needs and target specific
crops.

Impacts of Changes to the Bulb Vegetable Crop Group:  The rule expands
crop group 3, bulb vegetables, from 7 to 26 crops. Under the old and new
crop grouping program, a crop group 3 tolerance can be established with
9 residue trials.   The rule creates 2 subgroups.  Subgroup 3-A, bulb
onion subgroup, is comprised of 10 crops with bulb onion as the
representative crop.  Six residue trials are required to establish a
subgroup tolerance.  Subgroup 3-B, green onion subgroup, is comprised of
17 crops with green onion as the representative crop.  Three residue
trials are required to establish a subgroup tolerance (Schneider, 2005).
 

The new crop group 3 tolerance covers 26 commodities, an increase of 19
from the old crop group.  The addition of these crops greatly increases
the efficiency of IR-4 and EPA in registering pesticides on specialty
crops.  Assuming that the crops added to the crop group require only 1
field trial to be granted a stand alone registration (grown on a
regional basis and on few enough acres), to accomplish the same result
without expanding crop group 3 would require 18 field trials, at a cost
of $5.4 million ($300,000 per field trial) and the administrative costs
of both the IR-4 testing process and the EPA review process.  In
addition, specialty crop producers potentially gain access to important
pest control tools on 18 bulb vegetable crops, consumers benefit from
the potential for a cheaper, more abundant, and varied supply of bulb
vegetables, and pesticide registrants potentially enjoy greater sales. 

A similar calculation can be made for Subgroup 3A, bulb onion subgroup,
which consists of 10 crops and subgroup tolerance requirements of 6
trials.  In this case, 6 trials are required at $300,000 per trial, a
total of $1.8 million.  This is less than the 8 trials required for a
stand alone bulb onion tolerance.  Subgroup 3B, green onion, consists of
17 crops and a subgroup tolerance requires 3 trials.  This is the same
number of trials required for a stand alone green onion tolerance.    

Impact of New Edible Fungi Crop Group:  The new crop group 21, edible
fungi, is comprised of 20 crops.  There are no subgroups in the new crop
group.  EPA has determined that the number of field trials needed for
this crop group is 3.  Two field trials are conducted with the white
button mushroom and one field trial is conducted with either the oyster
mushroom or the shiitake mushroom (Schneider, 2006).  Under the old
system, 3 residue trials are required for a stand alone tolerance on
mushroom.  Thus for 3 trials and a total residue trial cost of $900,000,
tolerances will be established for 20 mushroom crops, compared to a
single mushroom crop under the current crop grouping program.  The
equivalent cost of establishing these tolerances individually without
the benefit of the rule would be $18 million, in addition to cost of the
IR-4 and EPA administrative and scientific process.

Aggregate Economic Impacts:  Each year, the IR-4 establishes research
plans, based on proposed research projects, where projects are
designated as having A, B or C priority, or as being eliminated from the
research project list.   IR-4 can conduct research on 10-15% of the
proposed researchable projects each year.  For this reason, IR-4
carefully chooses which projects will be researched.  This is based on
such factors as the availability and efficacy of alternatives, pest
damage potential, performance of the proposed chemical, and its
compatibility with integrated pest management programs.  Under the old
crop grouping program, IR-4 conducted research on as many projects as
possible.  However, due to resource limitations, less than 25% of
Priority B projects were researched and none from the Priority C list of
projects.  Researched projects typically included about 100 food use
residue projects.  In 2005, IR-4 received approval of 136 permanent
tolerances leading to 659 uses, and 62 time-limited tolerances leading
to 293 uses (IR-4, 2006b and IR-4, 2006c).  

Changes to the crop grouping program were initiated at the USDA/IR-4
Crop Grouping Symposium in Arlington, VA, October 2002.  Only a small
portion of these proposed changes are included in the rule.  Eventually,
however, it is the intention of the EPA and IR-4 crop grouping working
committee to expand the crop grouping program as is described in the
below table.

 

Current and Potential Crop Grouping Program

Categories	Current Crop Grouping	Future Crop Grouping Estimate

Commodities	508	1,000 – 1,500

Crop Groups	19	30 – 40

Subgroups	18	80

Ornamentals	0	900

Ornamental Groups	0	12

Source: Chen, Schneider, Nig, and Richardson, 2005.

If the crop grouping program is expanded as described above, the
efficiency of IR-4 research efforts and EPA pesticide registration
efforts could increase by 2 to 3 times.  This corresponds to a
comparable annual increase in the availability of pesticides for
specialty crop producers.  Furthermore, given the increase in crop
groups from 18 to 80, IR-4 will have added flexibility in tailoring
research efforts to meet the most pressing needs of specialty crop
producers.

VI	Paperwork Burden Analysis

This action does not contain any new information collection requirements
that need approval by the Office of Management and Budget under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.  The
rule reduces mandatory paperwork, due to the elimination of data
required by the agency for crops that are included in the expanded crop
grouping program.

VII	References

Chen, H., B. Schneider, Y. Nig, and L. Richardson, 2005, ICGCC Report,
IR-4/EPA Crop Grouping Working Group.

Chen, H., 2006, E-mail communication with Bernard Schneider, 30 August
2006.

EPA, 1996, Residue Chemistry Test Guidelines, OPPTS 860.1500 Crop Field
Trials, EPA Publication 712–C–96–183,
http://www.epa.gov/opptsfrs/publications/OPPTS_Harmonized/860_Residue_Ch
emistry_Test_Guidelines/Series/860-1500.pdf.

EPA, 1997, The Federal Insecticide, Fungicide, and Rodenticide Act
(FIFRA) and Federal Food, Drug, and Cosmetic Act (FFDCA) As Amended by
the Food Quality Protection Act (FQPA) of August 3, 1996, U.S.
Environmental Protection Agency, Office of Pesticide Programs.

EPA, 2004, Pesticide Industry Profile, Prepared by John Faulkner for
revision of Part 158W.

IR-4, 2006, 2005 IR-4 Annual Report, Report of the IR-4 Project
(NRSP-4/IR-4) January 1, 2005 - December 31, 2005,
http://ir4.rutgers.edu/Other/AnnualReports/2005AnnualReport.pdf.

IR-4, 2006b, 2005 Year in Review.
http://ir4.rutgers.edu/Other/YIR2005.pdf.

IR-4, 2006c, Information exchanged during meeting at EPA offices,
Arlington VA and by follow-up e-mail communication with J. Baron, 30
March 2006.

Madden, B., 2006, E-mail communication with Rame Cromwell, 5 September
2006. 

Markle, G.M., J.J. Baron, and B.A. Schneider, 1998, Food and Feed Crops
of the United States, Second Edition, Revised, A Descriptive List
Classified According to Potentials for Potentials for Pesticide
Residues, a Regulatory Food Safety Focus, Meister Publishing Company.

Schneider, B., 2005, Crop Grouping – Part I:  Analysis of the USDA
IR-4 Petition to Amend the Crop Group Regulation 40 CFR ' 180.41 (c) (3)
and Commodity Definitions [40 CFR ' 180.1 (h)] Related to Crop Group 3
Bulb Vegetables, U.S. Environmental Protection Agency. 

Schneider, B., 2006, ChemSAC Review of the USDA IR-4 Crop Grouping
Proposal to Establish a New Crop Group – Edible Fungi Group 21, U.S.
Environmental Protection Agency.

USDA, 2002, 2002 Census of Agricultural, U.S. Department of Agriculture,
http://www.nass.usda.gov/Census_of_Agriculture/.

USDA, 2002b, Report of the USDA/IR-4 Crop Grouping Symposium in
Arlington, VA, October 2002

USDA, 2006, Fruit and Vegetable Backgrounder, U.S Department of
Agriculture, Economic Research Service,   HYPERLINK
"http://www.ers.usda.gov/publications/VGS/apr06/vgs31301/vgs31301.pdf" 
http://www.ers.usda.gov/publications/VGS/apr06/vgs31301/vgs31301.pdf 

 The FIFRA definition of a minor use crop is, “… the use of a
pesticide on an animal, on a commercial agricultural crop or site, or
for the protection of public health where—

 (1)	the total United States acreage for the crop is less than 300,000
acres, as determined by the Secretary of Agriculture; or

 (2)	the Administrator, in consultation with the Secretary of
Agriculture, determines that, based on information provided by an
applicant for registration or a registrant, the use does not provide
sufficient economic incentive to support the initial registration or
continuing registration of a pesticide for such use and—

 (A)	there are insufficient efficacious alternative registered
pesticides available for the use;

 (B)	the alternatives to the pesticide use pose greater risks to the
environment or human health;

 (C)	the minor use pesticide plays or will play a significant part in
managing pest resistance; or

 (D)	the minor use pesticide plays or will play a significant part in an
integrated pest management program.

The status as a minor use under this subsection shall continue as long
as the Administrator has not determined that, based on existing data,
such use may cause an unreasonable adverse effect on the environment and
the use otherwise qualifies for such status” (EPA, 1997, page 15).

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