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MRL issues challenging booming U.S. agricultural exports

Export ships
U.S. agricultural exports booming despite growing challenges. Economically maturing world creating vast array of MRLs. More than 100 gather in SFO for MRL updates from around the world.

Exporting U.S.-grown food and fiber to an economically maturing and hungry world was a booming business last year that only got better in the early part of 2011, according to Peter Tabor, director of Plant Division, USDA/FAS’s Office of Scientific and Technical Affairs.

Tabor told more than 100 farmers, ag chem registrants, PCAs and consultants at a workshop in San Francisco that U.S. exports in 2010 were up $17 billion dollars over the year before. Besides that, agricultural exports increased by a whopping 30 percent from January through March this year, compared to the same period a year ago. The U.S. exported $115.8 billion in agricultural products in 2010.

However, Tabor’s good news was tempered by the sobering main topic — maximum residue levels — of the event sponsored by the California Specialty Crops Council.

For anyone who grows or processes for export, MRLs are a daily concern. The U.S. EPA and some states like California register and regulate the use of crop protection in this country. Many countries accept the EPA’s standards. However, many of the major U.S. customers do not recognize EPA standards and set their own pesticide use rules. MRLs are one of those standards.

The list of those establishing their own version of the U.S. EPA is growing. Many of these are American agriculture’s best export customers.

There are roughly 200 countries in the world and to those who manufacture chemicals and export agricultural products, it must seem like there are 200 sets of rules. There aren’t, but after a round-the-world day and a half day update on the subject of MRLs, it sure appears that way.

Heightened food safety concerns and the growing number of developing countries flexing their regulatory muscle have created a labyrinth of regulations that growers, PCAs and processors must navigate successfully to ship products overseas without being penalized. This not only includes knowing what residue levels are permitted at each destination, but what chemicals are registered in which countries. Compounding the issue is the fact growers and processors often do not know where a commodity they are growing will be eventually marketed. If in doubt, some say don’t use it. Others take their chances that there will be no pesticide residues found, if tested. Exporting has always been a somewhat risky business, and MRLs are increasing the stakes.

Expensive penalties

Getting caught exceeding foreign customer-set residue levels or using an unregistered product can be very expensive. This is especially true for high value specialty crops, a rapidly growing export market.

Just ask Santa Maria, Calif., vegetable producer Eric Freitas.

Freitas Brothers Farm is a U.S. vegetable exporter to Japan and Taiwan. It monitors closely the MRL standards for those markets, which are some of the most onerous in the world. Freitas spends $50,000 per year lab testing produce to make sure products meet MRL standards.

However, last season Freitas almost suffered catastrophic financial losses when a load of produce bound for Japan tested above the MRL standards in a random sampling for a fungicide. For several years Freitas has been operating on an old Japan MRL standard that was unknowingly slashed from what once was a 5 ppm maximum to .10 ppm.

The red-tagged load  was the third going to Japan with 18 to follow, all treated with the same crop protection product. This meant 18 containers of perishable vegetables did not meet MRL standards for that particular fungicide, red tagging Freitas a “repeat offender.” This would have would have resulted in all future shipments from Freitas facing mandatory 100 percent sampling rather than random sampling. This would have put Freitas out of the Japanese export business because it would have meant all shipments would sit dockside for days or weeks awaiting testing, rendering the fresh market produce unmarketable.

“It would have shut us out of that market because our product would have to sit waiting for testing,” Freitas said.

Freitas immediately turned to his trade association, “but they moved slower than I felt comfortable with.” A plea for help to the U.S. Embassy in Japan elicited immediate help. “The sanctions were reversed in a week. I was very pleased with the way the embassy handled the situation.

“I thought we were educated, but we were not. It can be extremely costly to mess up,” said Freitas, who continues to closely monitor MRLs from customer countries as well as a very valuable and reliable database of foreign MRLs maintained by USDA.

Fortunately it was not a costly lesson for Freitas, but it was a sobering one that Freitas said has relegated him to using crop protection products with MRLs in the U.S. close to those of his foreign customers.

When a pest management decision is at hand at Kern County, Calif., table grape    operation Sunview Vineyards, the MRLs for the likely country recipient are the first thing scrutinized, according to Max Jehle, director of technical services for Sunview.

“In the 1980s and 1990s, we had never heard of MRLs. In the last five years MRLs are probably the first thing we consider in a pest management decision.” However, he added, that is “probably not the best way” to approach pest management, but it becomes imperative if a grower wants to market his crop overseas.

Sunview ships table grapes to 45 different countries and is also a major organic producer with 1,000 acres of organic table grapes. Jehle’s pest management decisions focus on biological pest control, if practical. However, if that does not protect the crop he can find himself making pest management decisions based on MRLs, and not good science.

More pesticide use

MRL-based decisions can actually result in more pesticide being sprayed, he said.

This often happens when older, more broad spectrum products must be used because they have MRLs while newer, less disruptive compounds cannot be used because they are not cleared by the receiving country.

Access to the correct MRL information is critical and he said the agchem industry largely “has not been very good” in getting the latest MRL information to growers with the exception of BASF.

Bob Elliott, vice president of Sunkist growers, said the cooperative’s efforts to meet export MRLs is challenging because half of Sunkist’s 3,000 growers have groves of less than 20 acres. This makes it difficult to match pesticide use with exported citrus MRLs.

Thirty percent of Sunkist’s volume is exported, primarily to the Far East. Emerging markets in developing countries also are growing in importance because they often buy off-size fruit that would otherwise go to the less lucrative juice market.

Growing pressure from the citrus pysllid and its vectored, deadly citrus greening could run head long into export MRLs because the industry critically needs pest management materials that can contain a “potential industry buster” challenge. Those products may not have MRLs in critical customer countries like Taiwan, which is chronically behind in setting MRLs on newer products.

The citrus industry, like many other fresh fruit and vegetable exporters, is dependent on fungicides to prevent significant retail decay. There are products registered in the U.S. to protect fruit, but they may not have an MRL for important Far East citrus markets.

Specialty crops critical

Elliott said that impacts both approved and unapproved markets because at the packinghouse, a processor cannot constantly turn off and turn on 'waxing' over a moving table of citrus. Therefore, two new fungicides that can be legally used to protect domestically marketed fruit are precluded from treatment for fear of violating an export MRL.

Specialty crops like citrus are doing well in the export market, up $2 billion in 2010 from the year before. They are up 12 percent so far in 2011.

This is critical for California agriculture which is the only state in the nation exporting almonds, artichokes, dates, dried plums, figs, garlic, kiwifruit, olives, pistachios, raisins, and walnuts.

California’s agricultural exports have realized tremendous growth. Tabor said California has doubled export sales in the past decade. More than $13 billion worth of California’s agricultural output was export. That is roughly 25 percent of the state’s agricultural output.

Some of the key U.S. foreign markets are Mexico, Japan, Korea and China, which has jumped 45 percent so far this year over the same period as last year.

China is a “huge player” on the global stage. It takes $11 billion a year in U.S. soybeans alone. It has also become a major export player in the Far East.

Tabor said China is establishing its own MRLs and plans to set 5,000 in this coming year as food safety becomes a growing issue not only there, but in China’s export market in the wake of exploding melons and tainted milk. It has also raised fraud issues like Chinese products showing up in Middle East markets labeled as U.S. and Australian products.

Actually, wary consumers in China choose to buy foreign products, which they view as safer. This creates mislabeling problems. The Fruit Industry Association of Guangdong province recently told reporters that most of the country’s “imported” fruit is actually grown in China.

Workshop attendants spent a day and a half working to understand the giant jigsaw puzzle of worldwide MRLs that can even reach specific retailers. Supermarket chains are actually demanding their own set of MRLs for products sold in individual stores.

USDA is working to meet challenge by communicating with emerging markets about the U.S. food safety regulations, said Tabor, in hopes of narrowing the disparity between the U.S. EPA standards and export MRLs.

However, despite herculean efforts by USDA, EPA and other agencies to harmonize worldwide MRLs, workshop attendees were told the MRL issue will only become more complicated.

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